The USA Is The Cheapest Place In The World For Car Owners

There’s plenty of doom and gloom in the headlines lately, especially when it comes to the American economy. But it’s not all bad news. Scrap Car Comparison recently published a study showing that Americans are actually coming out ahead in one key area, being the average cost of car ownership, whether you’re talking a new Chevrolet Silverado or a used Camry. By and large, we pay less to stay mobile than any other country on the planet.

The study takes into account everything from gas prices and price of purchase to maintenance and insurance, finding that the United States is the best place in the world when it comes to buying and keeping a set of wheels, leading countries like Australia, Canada, and the Netherlands by a substantial margin. Here’s how it all breaks down.

We Spend Just Over Half Our Income On Our Cars

The Scrap Car Comparison study saw researchers looking at ownership costs in 98 different countries, and comparing their findings to the average salary in each one. Here’s what the top ten looks like for affordability, compared to how much of their annual salary it takes to buy and keep a car.

Even though we have it better than anyone else when it comes to cost of ownership, spending 56.4% of your annual income just to drive your car might sound steep, but remember that that’s just an average. If you drive a used car or a budget model, if you have an excellent driving record and good credit, or if your car is bought and paid for, you will likely spend less each year than your neighbor.

Some people spend well over half their income on their vehicle, others may make enough to cover their car three times over while choosing to drive something modest. The average American spends 56.4% of their annual income on their car, but that average is hashed out from people spending anywhere from 10% to 100% of their annual income on car ownership.

In Some Countries, Car Ownership Simply Isn’t Realistic On A Median Income

This is the part of the show we like to call “counting our blessings.” In the US, car ownership is a realistic goal for almost any working person. You might not be able to buy the Dodge Challenger of your dreams, or a fully-loaded Toyota Tacoma, but even a part-time job will likely cover the cost of owning a used Kia Optima or an entry-level Nissan Versa.

That’s not the case everywhere in the world. In some countries, it could take the income of four or five people to maintain a single car. Here’s what it looks like in parts of the world where the average annual salary simply can’t keep up with the cost of car ownership.

Incidentally, many of these countries have a strong motorcycle culture. For instance, the Philippines bought just under a half-million cars last year, but they bought 1,681,482 motorcycles, according to the Motorcycle Development Program Participants Association.

What Exactly Does It Cost To Own A Car In America?

Depending on your sources and how you add things up, you could get a thousand different estimates for the annual cost of car ownership. According to AAA, you’re probably going to spend around $965 a month, or $11,577 a year, which comes out to a savings of $719 annually, compared to their estimates a year ago, thanks in part to slower depreciation in 2025.

If we were to add up the costs ourselves, we can come up with our own estimate based on averages from various trusted sources.

Note that we calculated fuel expenses based on a 28 mpg car driving 15,000 miles per year (both average, according to FuelEconomy.gov), and we got our annual maintenance cost by adjusting RepairPal’s 2019 industry-wide estimate for inflation.

Our Own Estimates May Be A Bit Optimistic

Our total comes out a bit higher than AAA’s, but it actually seems to come out considerably lower than Scrap Car Comparison’s estimates. This may have to do with expenses that we didn’t include, like the initial purchase price and depreciation, which, if you add it in, is said to be the biggest expense drivers see from year to year. Assuming an annual depreciation rate of 14% on a car costing $48,699 (Cox Automotive’s average transaction price on a new vehicle), that’s another $6,817 a year, which brings our total to $21,015.

Even so, our estimate for annual cost of ownership comes out a bit lower than Scrap Car Comparison’s, According to the Bureau of Labor Statistics, Americans are earning a median income of around $1,196 a week these days, or $62,192 each year. At $14,198, our annual car ownership expenses only come out to around 23% of our annual income. At $21,015, we’re spending about 34% of our annual income on our cars.

Again, there are a million ways to add these numbers up, and different sources will have different opinions on which factors to include or not include. We should note that we’ve also opted not to average in the cost of recharging an electric car, and we’re looking primarily at new cars. Our point is only that Scrap Car Comparison has provided a comprehensive, no-stone-unturned estimate of car ownership costs in the US, factoring every reasonable expense, and we’re still making out like bandits, relatively speaking.

There Are Plenty Of Ways To Save Money

We may be spending less each year on our vehicles than the rest of the world, but that doesn’t mean we never look at this month’s bills and say “Why did I go with the premium trim? I don’t even like leather seats.” Luckily, we’ve been publishing articles for years on the subject of saving money at the dealer, and on the road. Here are some good ones.

• Earlier this year we covered the pros and cons of refinancing your auto loan when you’re just not happy with your payments. Sometimes, refinancing is a bigger headache than it’s worth, other times, it could save you thousands of dollars.
• If you hate visiting the mechanic, we’ve got a list of cheap, reliable cars that will go the distance without a lot of extra maintenance.
• Cheap cars don’t have to be boring. Here’s a list of affordable sports cars like the Honda Civic Si, a 200-horse sedan starting at just $30,250.
• If you just want the best dirt-cheap car on the market, we recommend the Nissan Versa. Here’s why.
• Believe it or not, you can actually save money simply by waiting until the end of the year to make a purchase. Here’s how.

Owning a car can be expensive, but it doesn’t have to be. Smart shoppers, DIY mechanics, and expert hagglers all stand to spend considerably less than the next driver when it comes time to pay the bill.

Sources: Scrap Car Comparison, MDPPA.