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Most and least expensive states for car ownership

By Posted : July 26, 2018

The cost of ownership for a car involves many expenses beyond the purchase price. You pay car insurance, sales tax, gas, registration, personal property tax and repair costs.

All of that adds up over a year. In the auto world, this is called the “total cost of ownership.”

Insurance.com wanted to figure out how the costs of owning a car differ by state. We collected the car ownership-related numbers from multiple sources, as well as our own data on average auto insurance costs. Our research included:

  • Sales tax
  • Registration costs
  • Personal property tax
  • Gas prices
  • Average miles per gallon
  • Average number of miles driven by state
  • Repair costs
  • Extra repair costs associated with road conditions

We ran all those numbers over a five-year period. Here's what we found.

States that cost the most and least for car ownership

The top 10 most expensive car ownership states over a five-year period:

  • Wyoming -- $38,459
  • California -- $33,750
  • Michigan -- $32,970
  • Louisiana -- $32,732
  • North Dakota -- $32,314
  • New Mexico -- $31,386
  • Oklahoma -- $31,217
  • Kentucky -- $30,880
  • Arkansas -- $30,767
  • Nevada -- $29,371

The 10 cheapest states to own a car over a five-year period:

  • Florida -- $22,549
  • New Hampshire -- $22,775
  • Ohio -- $23,108
  • Vermon -- $23,598
  • Alabama -- $24,166
  • Alaska -- $24,710
  • Massachusetts -- $24,910
  • Hawaii -- $25,234
  • Oregon -- $25,681
  • Wisconsin -- $25,966

Multiple factors go into the cost of owning a car and we found that the different metrics vary widely. One state may have expensive car insurance rates. The same state might have no sales tax. One state may have high gas prices, while at the same time a higher percentage of cars with excellent gas mileage.

Here's the complete list of states:

StateTotal including costs for all five years
Wyoming$38,459
California$33,750
Michigan$32,970
Louisiana$32,732
North Dakota$32,314
New Mexico$31,386
Oklahoma$31,217
Kentucky$30,880
Arkansas$30,767
Nevada$29,371
Minnesota$29,103
Indiana$28,762
Mississippi$28,683
Missouri$28,569
New Jersey$28,281
Utah$28,274
South Carolina$28,247
South Dakota$28,162
Rhode Island$28,119
Georgia$27,914
Iowa$27,827
North Carolina$27,800
Texas$27,751
Washington$27,622
Maryland$27,518
Connecticut$27,292
Pennsylvania$27,147
Virginia$27,053
Kansas$27,003
Montana$26,973
Idaho$26,899
Colorado$26,702
Nebraska$26,638
Illinois$26,615
New York$26,424
Delaware$26,322
Tennessee$26,226
West Virginia$26,165
Maine$26,159
Arizona$25,988
Wisconsin$25,966
Oregon$25,681
Hawaii$25,234
Massachusetts$24,910
Alaska$24,710
Alabama$24,166
Vermont$23,598
Ohio$23,108
New Hampshire$22,775
Florida$22,549

State sales tax and car ownership

Most states charge a sales tax. This tax hits drivers when you buy a car.

There are a handful of states that don't charge a sales tax, but that doesn't mean those are necessarily the cheapest places to own a car. New Hampshire, which we found has the lowest overall costs, doesn't have sales tax. On the other hand, Delaware and Montana don't have sales tax, but those states didn't finish in the top 10 cheapest states.

Some states have nearly 10 percent sales tax. Having a high or low sales tax doesn't necessarily mean you'll definitely be in a high-cost or low-cost state, as you can see below.

Here is the sales tax rate by state and how much that tax costs for a $25,000 vehicle:

StateSales tax rateSales tax on $25K car
Alabama8.91%$2,228
Alaska1.76%$440
Arizona8.17%$2,043
Arkansas9.26%$2,315
California8.44%$2,110
Colorado7.44%$1,860
Connecticut6.35%$1,588
Delaware0.00%$0
Florida6.65%$1,663
Georgia6.96%$1,740
Hawaii4.35%$1,088
Idaho6.01%$1,503
Illinois8.19%$2,048
Indiana7.00%$1,750
Iowa6.78%$1,695
Kansas8.20%$2,050
Kentucky6.00%$1,500
Louisiana8.91%$2,228
Maine5.50%$1,375
Maryland6.00%$1,500
Massachusetts6.25%$1,563
Michigan6.00%$1,500
Minnesota7.20%$1,800
Mississippi7.07%$1,768
Missouri7.81%$1,953
Montana0.00%$0
Nebraska6.80%$1,700
Nevada7.94%$1,985
New Hampshire0.00%$0
New Jersey6.97%$1,743
New Mexico7.35%$1,838
New York8.48%$2,120
North Carolina6.90%$1,725
North Dakota6.56%$1,640
Ohio7.10%$1,775
Oklahoma8.77%$2,193
Oregon0.00%$0
Pennsylvania6.34%$1,585
Rhode Island7.00%$1,750
South Carolina7.13%$1,783
South Dakota5.83%$1,458
Tennessee9.45%$2,363
Texas8.05%$2,013
Utah6.68%$1,670
Vermont6.14%$1,535
Virginia5.63%$1,408
Washington8.89%$2,223
West Virginia6.07%$1,518
Wisconsin5.43%$1,358
Wyoming5.47%$1,368

*Source: The Tax Foundation

Registration and personal property tax

Owning a car means you need to get it registered. Plus, about half of states charge a personal property tax. Drivers in states with the tax charge as much as two percent.

Let's look at one example. Florida is a state without a personal property tax. Instead, drivers pay a $248 registration fee. So, not paying a personal property tax doesn't mean you will pay less than other states.

Here's a look at the data by state:

StatePersonal property taxApplied to $25,000 carRegistrationTotal
Alabama0.32%$80.00$23.00$103
Alaska0.00%$0.00$50.00$50.00
Arizona0.72%$180.00$8.00$188.00
Arkansas0.45%$112.50$25.00$137.50
California0.28%$70.00$46.00$116.00
Colorado0.77%$192.50$0.00$192.50
Connecticut1.19%$297.50$40.00$337.50
Delaware0.00%$0.00$40.00$40.00
Florida0.00%$0.00$248.00$248.00
Georgia0.00%$0.00$20.00$20.00
Hawaii0.00%$0.00$75.00$75.00
Idaho0.00%$0.00$57.00$57.00
Illinois0.00%$0.00$101.00$101.00
Indiana0.56%$140.00$21.00$161.00
Iowa0.43%$107.50$120.00$227.50
Kansas0.79%$197.50$35.00$232.50
Kentucky0.54%$135.00$21.00$156.00
Louisiana0.00%$0.00$20.00$20.00
Maine1.03%$257.50$35.00$292.50
Maryland0.00%$0.00$135.00$135.00
Massachusetts0.96%$240.00$30.00$270.00
Michigan0.22%$55.00$89.00$144.00
Minnesota0.55%$137.50$10.00$147.50
Mississippi1.43%$357.50$14.00$371.50
Missouri1.13%$282.50$51.00$333.50
Montana0.16%$40.00$153.00$193.00
Nebraska0.63%$157.50$15.00$172.50
Nevada0.60%$150.00$33.00$183.00
New Hampshire0.77%$192.50$43.00$235.50
New Jersey0.00%$0.00$60.00$60.00
New Mexico0.00%$0.00$44.50$44.50
New York0.00%$0.00$67.00$67.00
North Carolina0.56%$140.00$28.00$168.00
North Dakota0.00%$0.00$161.50$161.50
Ohio0.00%$0.00$35.00$35.00
Oklahoma0.00%$0.00$81.00$81.00
Oregon0.00%$0.00$43.00$43.00
Pennsylvania0.00%$0.00$36.00$36.00
Rhode Island2.04%$510.00$55.00$565.00
South Carolina0.97%$242.50$24.00$266.50
South Dakota0.00%$0.00$106.00$106.00
Tennessee0.00%$0.00$24.00$24.00
Texas0.00%$0.00$51.00$51.00
Utah0.28%$70.00$43.00$113.00
Vermont0.00%$0.00$70.00$70.00
Virginia1.79%$447.50$41.00$488.50
Washington0.00%$0.00$30.00$30.00
West Virginia0.73%$182.50$30.00$212.50
Wisconsin0.00%$0.00$60.00$60.00
Wyoming0.77%$192.50$15.00$207.50

*Source: Department of Transportation; The Tax Foundation

Auto insurance costs by state

Depending on where you live, you may pay double what someone in another state pays. For instance, average Michigan and Louisiana drivers spend more than $2,000 for car insurance annually. That's more than double what people pay, on average, in Maine, Ohio, Vermont, Idaho, North Carolina and other states among the cheapest in the nation for car insruance.

There are many reasons why one state has higher rates than another. Car insurers review the cost and frequency of claims in your location when devising rates. Here are four key factors that influence car insurance rates in your state:

  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, which covers stolen vehicles, 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 or that have lots of wildlife (deer, for instance) can cause expensive vehicle damage, which is also covered by comprehensive coverage.

 

Insurance.com commissioned Quadrant Information Services to provide a report of average auto insurance rates for a 2016 Honda Accord for nearly every ZIP code in the United States. We calculated rates using data for up to six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm).

Here are the average auto insurance rates by state for full coverage of liability limits of $100,000 for injuries to one person in an accident you cause, up to $300,000 per accident, and $100,000 in property damage, with comprehensive and collision with a $500 deductible:

StateAverage rateCompared to national average of $1,355Rank, most expensive to least
Michigan$2,484$1,1291
Louisiana$2,190$8352
Florida$1,823$4773
Connecticut$1,771$4164
New York$1,759$4045
Kentucky$1,752$3976
Nevada$1,746$3917
DC$1,723$3688
Rhode Island$1,688$3339
Delaware$1,646$29110
Oklahoma$1,643$28811
Pennsylvania$1,522$16712
California$1,518$16313
Wyoming$1,494$13914
Hawaii$1,458$10315
Colorado$1,404$4916
Maryland$1,390$3517
West Virginia$1,375$2018
Arkansas$1,370$1519
Arizona$1,356$120
Wisconsin$1,351-$421
New Jersey$1,346-$922
Georgia$1,340-$1523
Mississippi$1,323-$3224
North Dakota$1,315-$4025
Texas$1,300-$5526
Alabama$1,299-$5627
Oregon$1,264-$9128
South Carolina$1,260-$9529
New Mexico$1,253-$10230
Kansas$1,242-$11331
Montana$1,224-$13132
Tennessee$1,214-$14133
Utah$1,199-$15634
Washington$1,191-$16435
Massachusetts$1,191-$16436
Minnesota$1,187-$16837
Missouri$1,154-$20138
Nebraska$1,113-$24239
Alaska$1,109-$24640
New Hampshire$1,101-$34541
South Dakota$1,059-$29642
Iowa$1,015-$34043
Illinois$1,004-$35144
Virginia$972-$38345
Indiana$964-$39146
Vermont$963-$39247
North Carolina$960-$39548
Ohio$952-$40349
Idaho$941-$41450
Maine$925-$43051

Source: Insurance.com commissioned Quadrant Information Services to provide a report of average auto insurance rates for a 2016 Honda Accord for nearly every ZIP code in the United States. We calculated rates using data for up to six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm). These rates are for a driver age 40 with a clean record and good credit.

Driving and gas costs

Since the last time Insurance.com ran these numbers in 2016, average gas prices increased more than $1 a gallon. That means you pay hundreds if not thousands more for gas than just two years ago.

American Automobile Association said the highest average regular gas prices are in Hawaii ($3.78), California ($3.63), Washington ($3.41) and Alaska ($3.38).

Gas prices are one factor in your annual cost of gasoline. Your car's gas mileage and how much you drive also play a role.

AAA numbers show that Hawaii and California drivers' cars get much better gas mileage (20.44 and 18.02 respectively) than other states.

Drivers in those two states also travel fewer miles than drivers in other states. States with cheaper gas, but with cars with lousy gas mileage and whose drivers travel longer distances may still pay more at the pump over a year.

Here is each state's average regular gas prices, average miles per gallon and average number of miles driven annually:

StateMPGMilesAvg price per gallonAnnual cost
Alaska13.629,915$3.38$2,461
Alabama17.9616,054$2.54$2,270
Arizona16.5914,493$2.58$2,254
Arkansas14.8914,974$2.94$2,957
California18.0214,435$3.63$2,907
Colorado17.0513,443$2.81$2,216
Connecticut18.1111,595$3.06$1,959
Delaware19.1914,802$3.02$2,329
Florida17.5911,836$2.75$1,850
Georgia17.4118,920$2.70$2,934
Hawaii20.4411,104$3.78$2,053
Idaho15.9615,318$2.70$2,591
Illinois16.3512,921$3.12$2,466
Indiana16.2117,821$2.87$3,155
Iowa14.7615,074$2.82$2,880
Kansas16.7814,742$2.64$2,319
Kentucky16.4217,370$2.72$2,877
Louisiana14.8914,805$2.58$2,565
Maine16.7515,420$2.89$2,661
Maryland17.3614,834$2.82$2,410
Massachusetts16.9111,759$2.84$1,975
Michigan16.814,121$2.88$2,421
Minnesota16.6817,887$2.76$2,960
Mississippi17.4617,699$2.61$2,646
Missouri16.8717,396$2.54$2,619
Montana14.9714,556$2.93$2,849
Nebraska15.2115,128$2.67$2,656
Nevada14.8412,869$2.85$2,471
New Hampshire15.8212,931$2.71$2,215
New Jersey14.211,927$2.80$2,352
New Mexico17.7118,369$2.90$3,008
New York19.8111,871$2.78$1,666
North Carolina17.5915,729$3.20$2,861
North Dakota14.9215,725$3.00$3,162
Ohio16.1212,906$2.70$2,162
Oklahoma17.518,891$2.60$2,807
Oregon18.2414,032$3.29$2,531
Pennsylvania16.1812,435$3.03$2,329
Rhode Island18.5412,781$2.90$1,999
South Carolina16.0816,020$2.54$2,531
South Dakota14.9915,505$2.87$2,969
Tennessee17.4915,462$2.61$2,307
Texas16.6116,347$2.61$2,569
Utah16.9415,442$3.10$2,826
Vermont16.8813,458$2.61$2,081
Virginia16.3515,464$2.90$2,743
Washington16.7712,837$3.41$2,610
West Virginia17.6314,283$2.79$2,260
Wisconsin18.7115,188$2.83$2,297
Wyoming13.721,821$2.95$4,699

Sources: Federal Highway Administration; American Automboile Association

Repair costs by state

Your location can actually play a role in the price of car repairs. Average repair costs can vary, though not as widely as other metrics, such as insurance and sales tax.

In using this data, we surmised that drivers in each state may need one repair job each year and added that amount to the annual cost of owning a car.

StateAvg. repair cost (parts and labor)
Alabama$383.62
Alaska$378.49
Arizona$377.76
Arkansas$373.70
California$365.45
Colorado$387.24
Connecticut$411.45
Delaware$387.74
Florida$376.39
Georgia$396.37
Hawaii$346.94
Idaho$380.31
Illinois$366.22
Indiana$360.11
Iowa$365.19
Kansas$364.32
Kentucky$378.71
Louisiana$374.12
Maine$343.60
Maryland$392.99
Massachusetts$375.55
Michigan$343.40
Minnesota$363.12
Mississippi$382.01
Missouri$369.31
Montana$388.31
Nebraska$364.28
Nevada$380.93
New Hampshire$366.14
New Jersey$383.50
New Mexico$373.14
New York$368.69
North Carolina$381.32
North Dakota$354.50
Ohio$349.18
Oklahoma$368.81
Oregon$374.48
Pennsylvania$372.94
Rhode Island$405.83
South Carolina$374.08
South Dakota$359.81
Tennessee$385.90
Texas$367.84
Utah$387.95
Vermont$359.71
Virginia$376.45
Washington$376.49
West Virginia$372.94
Wisconsin$346.81
Wyoming$361.43

Sourece: CarMD

Added repair costs connected to road conditions

The Department of Transportation estimated the effect poor road conditions have on drivers' wallets. New Jersey drivers pay an extra $601 for road condition-related repairs. California drivers fork over an average of $586 to repair cars damaged by road conditions.

On the other extreme, Georgia drivers only pay an average of $60 per year.

That's quite a swing. It shows how car ownership costs are often beyond your control.

Here are the added repair costs connected to road conditions by state:

State

Annual extra vehicle repairs/operating costs

due to driving on roads in need of fixing per motorist

Alabama$141
Alaska$359
Arizona$205
Arkansas$308
California$586
Colorado$287
Connecticut$294
Delaware$257
Florida$128
Georgia$60
Hawaii$515
Idaho$305
Illinois$292
Indiana$225
Iowa$381
Kansas$319
Kentucky$185
Louisiana$408
Maine$245
Maryland$422
Massachusetts$313
Michigan$357
Minnesota$250
Mississippi$419
Missouri$380
Montana$184
Nebraska$282
Nevada$233
New Hampshire$259
New Jersey$601
New Mexico$291
New York$403
North Carolina$241
North Dakota$237
Ohio$212
Oklahoma$425
Oregon$173
Pennsylvania$341
Rhode Island$467
South Carolina$255
South Dakota$324
Tennessee$182
Texas$343
Utah$197
Vermont$424
Virginia$254
Washington$272
West Virginia$273
Wisconsin$281
Wyoming$236

Source: Department of Transportation

How to save on total cost of ownership for a car

We've shown you how much each average driver pays for owning a car. The good news is that you can control some of those costs.

Sure, you can't avoid taxes, higher gas prices and registration expenses, but there are ways to reduce some of the costs of owning a car.

Here are some ideas:

Shop around for auto insurance

Insurers base rates on risk. That can include where you live, what you drive, how much you drive, who's driving your car, your driving record and even your credit history.

Insurance companies don't base risks the same. One insurer may consider you risky. Another may give you amazing rates.

So, it's critical to shop around for car insurance. Get quotes for the same coverage from multiple insurers and see how much you can save.

Check out Insurance.com'scar insurance coverage calculator to see how changing coverage, raising or lowering deductibles and adding services affects your costs.

 

Raise your deductible

One easy way to reduce the cost of car insurance is by increasing your deductible.

The deductible is what you pay for repairs when you file a claim. So, if you have a $500 deductible and your car suffers $2,000 worth of damage, you'll pay the $500, while the insurer picks up the rest.

The higher the deductible, the lower the premiums. If you raise your premium, you'll be less apt to file a claim and you'll need to pay more if you do.

If you raise your deductible, make sure you have money set aside to pay the deductible if you need to file a claim.

 

Take advantage of discounts

Insurers offer auto insurance discounts. You can save by bundling policies, showing loyalty, being a new customer, not getting into accidents or having a child who's a great student.

Those discounts differ by car insurance company. Make sure to ask each insurer how much you would save from the various discounts that it offers.

 

Buy a car with better gas mileage

There's nothing you can do about paying higher gas prices. However, you can make sure you own a vehicle with the best gas mileage possible.

As our research shows, your car's gas mileage can play an even more important role than what you pay at the pump. Switching to a vehicle that gets you another 10 or 20 miles per gallon can save you thousands annually. Every bit helps if your state's average gas price is closing in on $4 a gallon.

 

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

 

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