Despite Higher Gas Prices, Driving Costs Nearly Unchanged From 2004

BURNSVILLE, Minn., March 21 -- According to an annual AAA study, the average cost of driving a passenger vehicle in the United States is nearly unchanged from one year ago, despite higher costs for gasoline. This year, AAA estimates it will cost an average of 56.1 cents per mile, or $8,410 per year, to own and operate a new passenger car, compared to $56.2 cents per mile, or $8,431 annually, in 2004.

Offsetting higher gasoline costs are reductions in the annual average cost of insurance, licensing, registration and taxes, as well as tires and maintenance. The cost of gasoline in 2005 is estimated to average 8.5 cents per mile, or $1,285 per year, compared to 6.5 cents per mile, or $975, last year.

AAA's study calculates the average costs of all expenses associated with owning and operating a vehicle over five years and 75,000 miles of driving using a compact, mid-size and large vehicle. Covered expenses include vehicle depreciation, insurance, fuel, tires, license, registration and taxes, vehicle financing, routine maintenance and repair.

Vehicle depreciation, insurance and routine maintenance top the list as the three most expensive costs attributed to driving an automobile. AAA estimates the average new car will depreciate $3,879 per year of ownership, compared to $3,782 in 2004. The second largest expense is full insurance coverage estimated to average $1,288 per year compared to $1,603 in 2004. Routine maintenance, including the manufacturer's recommended maintenance operations and tire expense, is estimated to cost 5.9 cents per mile, or $885 for the year, compared to 6.1 cents per mile, or $915, last year.

AAA calculates typical finance charges for 2005 are $739 per year, based on a 5 year loan at 6 percent interest with a 10 percent down payment. In 2004, AAA estimated finance changes at $741 per year.

It should be noted that AAA's estimated average driving costs are higher than the Internal Revenue Service's allowance for business mileage of 40.5 cents per mile. The IRS never has allowed full reimbursement of all expenses associated with automobile ownership and use.

To conduct this study, AAA uses three domestically built 2005 cars - a subcompact Chevrolet Cavalier LS, a mid-size Ford Taurus SEL and a full-size Mercury Grand Marquis LS. These similarly equipped vehicles include air conditioning, automatic transmission, power steering, AM/FM stereo, dual air bags, antilock brakes, cruise control, tilt steering wheel, tinted glass and a rear-window defogger.

AAA offers automotive, travel, insurance and financial services to more than 45 million members in the United States and Canada. AAA Minnesota/Iowa is part of The Auto Club Group, with 4.1 million members in eight Midwest states.

  AAA's ANNUAL DRIVING COST ESTIMATES

  Year       Cost per Year       Cost per Mile
  2005       $8,410              56.1 cents
  2004*      $8,431              56.2 cents
  2003       $7,754              51.7 cents
  2002       $7,533              50.2 cents
  2001       $7,654              51.0 cents
  2000       $7,363              49.1 cents
  1999       $7,050              47.0 cents
  1998       $6,908              46.1 cents
  1997       $6,723              44.8 cents
  1996       $6,389              42.6 cents
  1995       $6,185              41.2 cents
  1994       $5,916              39.4 cents

  *AAA adopted a revised methodology for calculating driving costs to more
  fully capture costs incurred by average drivers.