Beyond the Pump: Why Car Ownership Costs Have Skyrocketed 50% Since 2020

POLICY WIRE — Washington, D.C. — While the ongoing conflict with Iran has pushed gasoline prices to an average of $4.33 per gallon—a 45% increase since late February—the financial strain on American drivers extends far beyond the fuel pump.

Data from the Navy Federal Credit Union reveals that the total cost of owning a vehicle has climbed 50% since 2020. While fuel is a factor, the primary driver of this surge is a 70% increase in repair costs over the last five years.

According to AAA, the average repair bill for a new vehicle during its first five years of ownership sits at approximately $1,750. Long noted that these expenses often act as hidden costs, frequently totaling hundreds or even thousands of dollars.

The financial burden is further compounded by rising auto insurance premiums and routine maintenance fees. LendingTree reports that in 2026, the average annual cost for full coverage insurance is $2,124, while minimum coverage averages $816.

Drivers are keeping their vehicles for longer periods, with the Transportation Department reporting the average age of the U.S. passenger fleet reached 14.5 years in 2025. This trend often results in higher service requirements for aging vehicles.

Modern vehicles are increasingly equipped with complex electronic components and sensors that carry higher price tags for repairs. Additionally, a persistent shortage of skilled mechanics has empowered technicians to command higher rates for their labor.

Good mechanics can really write their own price these days, and they’re doing it, Long explained.

For those operating a new vehicle, the total annual cost of ownership now reaches $12,863, which breaks down to $1,071.92 per month, according to AAA analysis.

Reporting by Policy-Wire (PW)