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Most and least expensive states for car ownership

By Posted : July 26, 2016

Car ownership costs don't end with your monthly payment -- that's the starting point. In fact, the cost to own a car involves two sets of expenses:Wyoming most expensive to own a car

  1. Initial costs. Sales tax and document fees at the time of purchase
  2. Ongoing charges. Registration, insurance, gas and maintenance.

These costs vary wildly, depending on your state, and they can really add up. Over a five-year period, the average car owner in Michigan could spend $10,596 more than her counterpart in Ohio. This article examines the primary cost factors, lists the least and most expensive states for car ownership, and offers cost-saving tips for drivers in all states. Click on the links below to jump directly to the information that you need:

10 most expensive states to own a car
10 least expensive states to own a car
Ranking: most to least expensive states to own a car
Sales tax and fees impact on car ownership
Insurance impact on owning a car
Gasoline cost impact on owning a car
Vehicle maintenance impact on owning a car
Vehicle registration impact on owning a car
Factors affecting the cost to own a car

We calculated an average vehicle purchase price--basing it on the number of new versus used car purchases in 2015, and the average price of each, see methodology below. The following factors were evaluated to determine car ownership costs over five years, by state:

Cost factorDescriptionData source
GasolineAverage fuel costs times average miles drivenFederal Highway Administration
InsuranceAverage auto insurance rates by stateInsurance.com
MaintenanceEngine check and average repairAAA
RegistrationAuto registration fees by stateThe Tax Foundation
Sales taxFor purchase of vehicle cost: $23,407The Tax Foundation

10 most expensive states to own a car (over 5 years)

Due to generally higher than average auto insurance costs, gas and maintenance fees, it can be more expensive overall to own a car in the following states:

Highest cost states to own a car5-year ownership cost
1. Wyoming$31,587
2. Georgia$28,698
3. Oklahoma$28,655
4. Michigan$28,236
5. Montana$27,454
6. California$27,087
7. Louisiana$26,462
8. Virginia$25,351
9. South Carolina$24,854
10. Texas$24,830

Our complete ranking of the most and least expensive states to own a car is below.

10 highest cost-per-mile states (over 5 years)

Drivers in some states spend more time behind the wheel than their counterparts in other states. Considering the total cost to own and operate a car over five years, and evaluating the average number of miles driven annually in each state, the following states have the highest ownership cost-per-mile:

States with highest cost-per-mile

5-year ownership cost

 Average miles/year

Average cost/mile

1. New Jersey

$24,574

11,927

$0.412

2. Michigan

$28,236

14,121

$0.400

3. Alaska

$19,530

9,915

$0.394

4. Montana

$27,454

14,556

$0.377

5. California

$27,087

14,435

$0.375

6. Connecticut

$21,619

11,595

$0.373

7. Florida

$21,880

11,836

$0.370

8. Rhode Island

$23,009

12,781

$0.360

9. Massachusetts

$21,047

12,781

$0.358

10. Louisiana

$26,462

14,805

$0.357

Regardless of whether overall cost to own a car or average ownership cost-per-mile is considered, four states rank consistently among the most costly:

  • Michigan
  • Montana
  • California
  • Louisiana

10 least expensive states to own a car (over five years)

With an average U.S. car purchase price of $23,407, some states make owning a car easier on your wallet. Factors contributing to low-cost car ownership include: insurance, maintenance, gas, sales tax and registration.least expensive states to own a car

Lowest cost states to own a car

5-year ownership cost

1. Hawaii

$17,289

2. Ohio

$17,640

3. New York

$17,697

4. New Hampshire

$17,988

5. Vermont

$18,463

6. Wisconsin

$18,919

7. Alaska

$19,530

8. Oregon

$19,622

9. Illinois

$19,642

10. Delaware

$20,221

10 lowest cost-per-mile states (over 5 years)

Interestingly, the average number of miles driven per year in low cost states was about 3,500 miles less than in high-cost states. The following states have the lowest ownership cost-per-mile:

States with lowest cost-per-mile

5-year ownership cost

Average miles/year

Average cost/mile

1. Wisconsin

$18,919

15,188

$0.249

2. Minnesota

$23,127

17,887

$0.259

3. Maine

$20,432

15,420

$0.265

4. Indiana

$23,707

17,821

$0.266

5. Kentucky

$23,209

17,370

$0.267

6. Mississippi

$23,732

17,699

$0.268

7. New Mexico

$24,724

18,369

$0.269

8. North Carolina

$21,215

15,729

$0.270

9. Tennessee

$20,942

15,462

$0.271

10. Delaware (Tie)

$20,221

14,802

$0.273

10. Ohio (Tie)

$17,640

12,906

$0.273

Regardless of whether overall cost to own a car or average ownership cost-per-mile is considered, three states rank among the least costly:

  • Ohio
  • Wisconsin
  • Delaware

Ranking: most to least expensive states to own a car

RankStateOwnership cost (5 years)
1Wyoming$31,587
2Georgia$28,698
3Oklahoma$28,655
4Michigan$28,236
5Montana$27,454
6California$27,087
7Louisiana$26,462
8Virginia$25,351
9South Carolina$24,854
10Texas$24,830
11Nebraska$24,764
12New Mexico$24,724
13New Jersey$24,574
14Missouri$24,324
15Maryland$23,856
16Mississippi$23,732
17Indiana$23,707
18Arkansas$23,445
19North Dakota$23,392
20Kentucky$23,209
21Minnesota$23,127
22Rhode Island$23,009
23West Virginia$22,715
24Colorado$22,411
25Nevada$22,265
26Arizona$22,246
27Alabama$21,989
28Florida$21,880
29Utah$21,874
30South Dakota$21,770
31Iowa$21,758
32Washington$21,677
33Connecticut$21,619
34Kansas$21,616
35Idaho$21,357
36North Carolina$21,215
37Massachusetts$21,047
38Tennessee$20,942
39Pennsylvania$20,636
40Maine$20,432
41Delaware$20,221
42Illinois$19,642
43Oregon$19,622
44Alaska$19,530
45Wisconsin$18,919
46Vermont$18,463
47New Hampshire$17,988
48New York$17,697
49Ohio$17,640
50Hawaii$17,289

Sales tax and fees impact on car ownership

If you're lucky enough to buy a car in a state with no sales tax, you're way ahead of the game. Cars are big-ticket items, and between state and local taxes, transfer and document charges, you can spend more than ten percent of the purchase price on these line items.

To estimate the sales tax in each state, the 2015 U.S. weighted average car purchase price of $23,407 was assumed to be the car cost. Each state's sales tax percentage was then applied to the average vehicle cost.

Multiplying the U.S. average sales tax rate of 6.4% by the average car purchase price resulted in a $1,499 estimate for sales tax per vehicle. All state tax rates are listed below.

Sales tax rates by state (Highest to lowest)

StateTax RateTaxes for average $23,407 car
1. Tennessee9.45%$2,212
2. Arkansas9.26%$2,167
3. Alabama8.91%$2,086
4. Louisiana8.91%$2,086
5. Washington8.89%$2,081
6. Oklahoma8.77%$2,053
7. New York8.48%$1,985
8. California8.44%$1,976
9. Kansas8.20%$1,919
10. Illinois8.19%$1,917
11. Arizona8.17%$1,912
12. Texas8.05%$1,884
13. Nevada7.94%$1,858
14. Missouri7.81%$1,828
15. Colorado7.44%$1,741
16. New Mexico7.35%$1,720
17. Minnesota7.20%$1,685
18. South Carolina7.13%$1,669
19. Ohio7.10%$1,662
20. Mississippi7.07%$1,655
21. Indiana7.00%$1,638
22. Rhode Island7.00%$1,638
23. New Jersey6.97%$1,631
24. Georgia6.96%$1,629
25. North Carolina6.90%$1,615
26. Nebraska6.80%$1,592
27. Iowa6.78%$1,587
28. Utah6.68%$1,564
29. Florida6.65%$1,557
30. North Dakota6.56%$1,535
31. Connecticut6.35%$1,486
32. Pennsylvania6.34%$1,484
33. Massachusetts6.25%$1,463
34. Vermont6.14%$1,437
35. West Virginia6.07%$1,421
36. Idaho6.01%$1,407
37. Kentucky6.00%$1,404
38. Maryland6.00%$1,404
39. Michigan6.00%$1,404
40. South Dakota5.83%$1,365
41. Virginia5.63%$1,318
42. Maine5.50%$1,287
43. Wyoming5.47%$1,280
44. Wisconsin5.43%$1,271
45. Hawaii4.35%$1,018
46. Alaska1.76%$  412
47. Delaware0.00%$     0
48. Montana0.00%

$     0

49. New Hampshire0.00%

$     0

50. Oregon0.00%$     0

Source: The Tax Foundation

auto sales taxBuying a car: Can you save on sales tax?

If you live in California, which has a fairly high sales tax rate, can you save by driving over the border to Oregon to buy your car? It depends. Most states impose some cost in lieu of sales tax (for example, a "use" tax) when you register your vehicle if you purchased it elsewhere.

There is a loophole in Oregon. You can register your car in Oregon, even as a non-resident, if you garage and use the car in Oregon. If you're in a position to do this, you might catch a break -- California does not impose a tax on cars bought in another state as long as they have been owned, licensed, and used in the other state for at least 90 days -- although vehicles with fewer than 7,500 miles must be certified to meet California smog regulations.

However, Washington, which also borders Oregon and has one of the highest sales tax rates in the country and cuts you no slack. If you're a Washington resident and buy a car in another state, Washington credits any taxes you paid in the other state toward the use tax you'll owe as a resident. If you buy in Oregon, with no sales tax, you get no credit and pay the entire Washington use tax.

Check with your state DMV. There may legally save on taxes if you buy your car in a neighboring state. If not, you'll have to grit your teeth and get out your wallet.

Insurance impact on owning a car

Insurance is often a big expense when you own a car, although it varies by state. Rates change when you move to a different area for at least four reasons:

  1. Government-mandated coverage. Alaska's mandatory minimum liability coverage levels are twice Alabama's, for instance. Higher auto liability limits result in higher premiums.
  2. Crime rates. If your state has lower property crime levels, your comprehensive insurance coverage may be less costly than in high-crime areas.
  3. Population density. Crowded roads create high accident rates, affecting collision coverage costs.
  4. Wildlife and weather. Areas prone to high winds or hail can increase property damage claims for windshield and paint destruction. Wildlife and livestock can cause expensive collision damage.

The difference between the lowest cost average auto insurance state, Maine, and the most expensive, Michigan, is more than $1,900 per year. Average annual car insurance premiums are shown below, listing states in order of highest to lowest rates.

Average insurance costs by state (highest to lowest)

StateAnnual insurance average cost
1. Michigan$2,738
2. Montana$2,297
3. New Jersey$1,905
4. Louisiana$1,842
5. Oklahoma$1,778
6. California$1,752
7. Florida$1,654
8. Maryland$1,610
9. Rhode Island$1608
10. Delaware1,607
11. Georgia$1,559
12. Texas$1,510
13. West Virginia$1,456
14. Wyoming$1,421
15. Colorado$1,393
16. Connecticut$1,367
17. South Carolina$1,353
18. Arkansas$1345
19. Alabama$1,337
20. Massachusetts$1,325
21. Pennsylvania$1,305
22. Kentucky$1,295
23. Mississippi$1,277
24. New Mexico$1,277
25. Oregon$1,267
26. Minnesota$1,257
27. Nevada$1,221
28. North Dakota$1,200
29. Arizona$1,188
30. Nebraska$1,188
31. South Dakota$1,168
32. Washington$1,168
33. Tennessee$1,145
34. Kansas$1,135
35. Indiana$1,113
36. Alaska$1,078
37. Utah$1061
38. Missouri$1,056
39. New York$1,050
40. Hawaii$1,049
41. Illinois$1,035
42. Virginia$1,020
43. Iowa$  989
44. North Carolina$  987
45. Vermont$  942
46. New Hampshire$  941
47. Idaho$  935
48. Wisconsin$  912
49. Ohio$  900
50. Maine$  808

Source, Insurance.com data

Saving on Auto Insurance

Auto insurance rates vary between drivers in the same state, even for drivers with similar records within the same demographic groups--age, neighborhood. Information is your best tool when looking to pay less for car insurance.

A car insurance coverage calculator can help you find the best deal on insurance, and understand how changing coverage, raising or lowering deductibles and adding services affects your costs. Be sure to take advantage of all auto insurance discounts that apply to your situation.

Gasoline cost impact on owning a car

Unless you drive a vehicle that runs on electricity or other alternative fuel, gas or diesel is a big part of your automotive cost. Your gasoline expense depends in part on where you live. States differ in the amount of tax they attach to each gallon of fuel. Gasbuddy.com tracks gas prices at local levels and reports statewide averages. The latest data (July 2016) was used to compare gas prices among states.

Fuel costs also depend on how much driving you do, and the type of car you drive. That varies by state as well, and the Federal Highway Administration tracks both the number of miles driven and the average miles per gallon (MPG) drivers get in each state. The table below shows the average spent on gas, by state.

Average gas costs by state (highest to lowest)

StateMPGMilesAverage price/gallonAnnual Cost
1. Wyoming13.7021,821$2.27$3,608
2. Georgia17.4118,920$2.79$3,032
3. Oklahoma17.5018,891$2.54$2,738
4. Nebraska15.2115,128$2.57$2,553
5. Virginia16.3515,464$2.67$2,525
6. New Mexico17.7118,369$2.40$2,486
7. Indiana16.2117,821$2.23$2,452
8. Missouri16.8717,396$2.33$2,406
9. California18.0214,435$2.88$2,306
10. South Carolina16.0816,020$2.28$2,271
11. Texas16.6116,347$2.31$2,271
12. Louisiana14.8914,805$2.28$2,267
13. Idaho15.9615,318$2.29$2,199
14. North Dakota14.9215,725$2.08$2,189
15. Montana14.9714,556$2.25$2,189
16. Kentucky16.4217,370$2.04$2,156
17. Minnesota16.6817,887$2.00$2,139
18. Iowa14.7615,074$2.08$2,123
19. Utah16.9415,442$2.30$2,094
20. South Dakota14.9915,505$2.01$2,082
21. Maine16.7515,420$2.21$2,037
22. Mississippi17.4617,699$2.00$2,024
23. Arkansas14.8914,974$2.00$2,015
24. North Carolina17.5915,729$2.24$2,000
25. Arizona16.5914,493$2.23$1,947
26. Maryland17.3614,834$2.25$1,924
27. Washington16.7712,837$2.51$1,923
28. Nevada14.8412,869$2.20$1,903
29. Alaska13.629,915$2.61$1,899
30. West Virginia17.6314,283$2.31$1,869
31. Kansas16.7814,742$2.12$1,863
32. Wisconsin18.7115,188$2.29$1,859
33. Oregon18.2414,032$2.37$1,823
34. Tennessee17.4915,462$2.06$1,823
35. New Jersey14.2011,927$2.15$1,804
36. Alabama17.9616,054$2.01$1,796
37. Michigan16.8014,121$2.14$1,795
38. Colorado17.0513,443$2.21$1,746
39. Pennsylvania16.1812,435$2.27$1,743
40. Illinois16.3512,921$2.13$1,680
41. New Hampshire15.8212,931$2.04$1,671
42. Vermont16.8813,458$2.04$1,628
43. Delaware19.1914,802$2.10$1,617
44. Ohio16.1212,906$1.95$1,563
45. Massachusetts16.9111,759$2.23$1,553
46. Connecticut18.1111,595$2.38$1,526
47. Florida17.5911,836$2.09$1,404
48. Hawaii20.4411,104$2.47$1,339
49. Rhode Island18.5412,781$1.91$1,317
50. New York19.8111,871$2.11$1,264

The difference between the amount spent on gas in the cheapest and most expensive state is about $2,343 a year.

Sources: Federal Highway Administration; Gasbuddy.com

Saving on Gasgas expense

Gas expense comprises miles driven, your gas mileage, and the price per gallon. Some sellers offer a discount if you pay with their credit card. Membership stores, such as Sam's Club and Costco, offer low gas prices to members as a benefit.

While you probably don't want to dump your current car based solely on its gas mileage, you may want to consider fuel-efficiency when you buy your next one-adding the extra charges for lower MPG vehicles when comparing total costs.

The other component, miles driven, is at least somewhat under your control. Alaskans, for example, have some of the highest per-mile costs because their gas prices are high. However, the Federal Highway Administration says that Alaskans drive fewer miles on average, and that keeps their gas costs down. In addition, driving fewer miles causes your car to hold its value better and depreciate less.

In California, mileage is a main rating factor. Insurers must calculate rates based on miles driven and driving record before considering your location.

Put yourself on a mileage "budget" per week and find ways to cut back-combining errands, carpooling, using public transportation when possible, and biking or walking short distances. Explore pay-per-mile auto insurance to cut costs on both gasoline and insurance.

Vehicle maintenance impact on owning a car

Costs for routine maintenance differ between states due to variances in labor costs, real estate prices and parts availability.

CarMD has an index comparing the average cost of a small repair-correcting a "check engine" light-between states. Applying the index for each state to the nationwide cost of annual maintenance, obtained from the American Automobile Association (AAA), yields an approximate maintenance cost for each state.

The difference between the least and most expensive state is about $160 a year--in lattes, that's two a month, not exactly a budget-buster.

Average maintenance costs by state (highest to lowest)

StateAvg Minor RepairIndexAverage maintenance
1. California$435.47111%$852.56
2. Wyoming$427.75109%$837.44
3. Maryland$419.37107%$821.04
4. North Dakota$419.24107%$820.78
5. New Jersey$418.55107%$819.43
6. Rhode Island$416.92106%$816.24
7. Connecticut$416.47106%$815.36
8. Colorado$416.34106%$815.11
9. Montana$416.06106%$814.56
10. Georgia$410.02105%$802.73
11. Virginia$409.30104%$801.32
12. Idaho$408.27104%$799.31
13. Utah$407.98104%$798.74
14. Washington$407.77104%$798.33
15. Alaska$407.09104%$797.00
16. New Mexico$405.06103%$793.02
17. Oregon$404.07103%$791.08
18. Hawaii$404.04103%$791.02
19. Massachusetts$400.64102%$784.37
20. Nevada$400.18102%$783.47
21. Delaware$398.30102%$779.79
22. North Carolina$395.14101%$773.60
23. Mississippi$390.92100%$765.34
24. Vermont$390.79100%$765.08
25. Arkansas$390.65100%$764.81
26. Kentucky$389.5599%$762.66
27. New Hampshire$389.4999%$762.54
28. South Carolina$388.9799%$761.52
29. New York$388.7499%$761.07
30. Florida$387.3799%$758.39
31. Texas$386.4999%$756.67
32. Arizona$385.6498%$755.00
33. Tennessee$385.2198%$754.16
34. Minnesota$384.7398%$753.22
35. Alabama$383.0498%$749.91
36. Louisiana$381.2197%$746.33
37. Pennsylvania$381.2197%$746.33
38. West Virginia$374.4196%$733.02
39. Nebraska$373.2695%$730.76
40. Illinois$372.2595%$728.79
41. South Dakota$370.2695%$724.89
42. Oklahoma$369.7194%$723.81
43. Missouri$368.7194%$721.86
44. Kansas$368.7094%$721.84
45. Maine$361.4492%$707.62
46. Iowa$358.2791%$701.42
47. Wisconsin$356.9091%$698.73
48. Ohio$356.3891%$697.72
49. Indiana$355.9891%$696.93
50. Michigan$354.1390%$693.31

 Source: AAA; CarMD

Saving on vehicle maintenance

A recent survey of AAA-approved repair shops disclosed that most drivers put off routine maintenance, including oil changes, tires and battery inspection/testing. Neglecting minor maintenance can lead to expensive breakdowns. Your best way to save on auto repair is not scrimping on routine maintenance.

Vehicle registration impact on owning a car

Auto registration costs are non-negotiable. If you want to live and drive in your state, you pay the price. The least-expensive states make this easy--$20 and you're done. Others charge hundreds, based on your vehicle's weight or value. These extra fees can at least be deducted on your federal taxes, if you itemize.

Average car registration costs by state (highest to lowest)

StateRegistrationPersonal property tax rateApplied to avg. car priceTotal
1. Rhode Island$55.002.04%$477.50$532.50
2. Virginia$41.001.79%$418.98$459.98
3. Mississippi$14.001.43%$334.72$348.72
4. Connecticut$40.001.19%$278.54$318.54
5. Missouri$51.001.13%$264.50$315.50
6. Maine$35.001.03%$241.09$276.09
7. Massachusetts$30.000.96%$224.70$254.70
8. South Carolina$24.000.97%$227.05$251.05
9. Florida$248.000.00%$0.00$248.00
10. New Hampshire$43.000.77%$180.23$223.23
11. Iowa$120.000.43%$100.65$220.65
12. Kansas$35.000.79%$184.91$219.91
13. West Virginia$30.000.73%$170.87$200.87
14. Wyoming$15.000.77%$180.23$195.23
15. Montana$153.000.16%$37.45$190.45
16. Colorado$0.000.77%$180.23$180.23
17. Arizona$8.000.72%$168.53$176.53
18. Nevada$33.000.60%$140.44$173.44
19. Nebraska$15.000.63%$147.46$162.46
20. North Dakota$161.500.00%$0.00$161.50
21. North Carolina$28.000.56%$131.08$159.08
22. Indiana$21.000.56%$131.08$152.08
23. Kentucky$21.000.54%$126.40$147.40
24. Michigan$89.000.22%$51.49$140.49
25. Minnesota$10.000.55%$128.74$138.74
26. Maryland$135.000.00%$0.00$135.00
27. Arkansas$25.000.45%$105.33$130.33
28. California$46.000.28%$65.54$111.54
29. Utah$43.000.28%$65.54$108.54
30. South Dakota$106.000.00%$0.00$106.00
31. Illinois$101.000.00%$0.00$101.00
32. Alabama$23.000.32%$74.90$97.90
33. Oklahoma$81.000.00%$0.00$81.00
34. Hawaii$75.000.00%$0.00$75.00
35. Vermont$70.000.00%$0.00$70.00
36. New York$67.000.00%$0.00$67.00
37. New Jersey$60.000.00%$0.00$60.00
38. Wisconsin$60.000.00%$0.00$60.00
39. Idaho$57.000.00%$0.00$57.00
40. Texas$51.000.00%$0.00$51.00
41. Alaska$50.000.00%$0.00$50.00
42. New Mexico$44.500.00%$0.00$44.50
43. Oregon$43.000.00%$0.00$43.00
44. Delaware$40.000.00%$0.00$40.00
45. Pennsylvania$36.000.00%$0.00$36.00
46. Ohio$35.000.00%$0.00$35.00
47. Washington$30.000.00%$0.00$30.00
48. Tennessee$24.000.00%$0.00$24.00
49. Georgia$20.000.00%$0.00$20.00
50. Louisiana$20.000.00%$0.00$20.00

 Sources: Department of Transportation; The Tax Foundation

Saving on car registration feeselectric cars

You can't really save on vehicle registration once you have your car, but in states that charge according to the vehicle value or weight, you can select a car with fewer fees. Interestingly, many states charge extra to register vehicles that use electricity or alternative fuels. For example, Georgia's standard auto registration fee for gas-driven vehicles is $20, but it's ten times that for electric cars. The reason for this, according to the Department of Energy, is to make up for the gas taxes that owners of these vehicles don't pay-taxes needed to keep highways repaired.

Factors affecting the cost to own a car

The state in which you live has a profound effect on the cost of vehicle ownership. While some higher costs are often unavoidable, such as sales tax and registration, you do have control over others, including the number of miles you drive and the fuel-efficiency of the car you choose.

Because auto insurance represents one of the greatest costs of car ownership, compare car insurance quotes to obtain the lowest price auto insurance.

Save on auto insurance now

Methodology: average car price

Using 2015 data, 69% of cars purchased were used, at an average cost of $18,800. New cars represented 31% of total vehicle purchases, at an average cost of $33,500. A weighted average car price was calculated at $23,407.

See how much YOU can save
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