Total cost of car ownership by state in 2026: The cheapest and most expensive places to own a car

Total cost of car ownership by state in 2026: The cheapest and most expensive places to own a car

The state that you live in impacts how much it costs to own a car more than you may realize, with the cost of auto insurance being the biggest driving factor in the differences between the states.

The five-year cost of owning a car in Louisiana is $39,417 for 2026, but in New Hampshire, it’s just $21,917, according to a report by Insurance.com. That’s a $17,500 difference between the most and least expensive states, and it’s no coincidence that Louisiana and New Hampshire are the most and least expensive states for car insurance, respectively.

The average cost of owning a car nationwide is $29,336 over five years, with Louisiana drivers paying more than $10,000 over the average.

There’s more to car ownership expenses than your car payment. Factors like insurance, taxes, fuel and repairs contribute to the total cost of owning a car and vary significantly by state. Insurance.com gathered the data and calculated the cost of owning a car over five years in each state.

Quick coverage:

• Average cost of car ownership nationwide: $29,336 over five years.

• Most expensive state: Louisiana, at an average of $39,417 over five years.

• Least expensive state: New Hampshire, at an average of $21,917 over five years.

• Biggest cost driver for owning a car: Auto insurance costs the most, adding nearly $20,000 over five years in Louisiana.

How much does it cost to own a car in your state?

Louisiana is the most expensive state, with five-year ownership costs of $39,417, followed by Nevada at $37,118 and Florida at $37,037.

New Hampshire is the cheapest, at $21,917, followed by Oregon at $23,097, and Vermont at $23,667.

What’s driving the differences:

• Louisiana has both the highest car insurance rates and the highest sales tax on vehicles.

• Nevada and Florida are both among the most expensive states for car insurance.

• New Hampshire has the second-lowest car insurance rates in the U.S. and no sales tax.

• Oregon doesn’t have sales tax either, and also enjoys low car insurance rates.

• Drivers in Alaska enjoy low sales tax, low insurance rates and low annual driving and maintenance costs.

Compare the five-year cost of car ownership in your state below.

The most expensive states to own a car in 2026

Louisiana is the most expensive state to own a car, with a five-year cost of $39,417. Nevada comes in second at $37,118, and Florida is third at $37,037.

The two main factors driving the high cost of car ownership in these states are high insurance costs and high sales tax rates.

Why do these states rank highest?

The biggest factor affecting the cost of car ownership is car insurance rates, which vary significantly by state.

Compare the five-year costs for the top 10 most expensive states below.

All three of the top states with the highest car ownership costs also have high insurance rates. The states with the highest average annual car insurance rates (full coverage) are:

Drivers pay an average of nearly $20,000 for full coverage car insurance over five years in these three states. Although those are average costs, rates vary greatly by driver and location. Driving record, age, severe weather, vehicle theft rates, and other factors can cause rates to be higher.

“It’s smart to get auto insurance quotes before you even test drive a car. Before you get attached to the idea of driving around in a luxurious, sporty vehicle, it’s important to know how much you’ll be paying towards insurance premiums each month, in addition to your monthly payment, CarEdge automotive analyst Justin Fischer said.

Sales tax is another big expense that can raise the cost of owning a car. Most buyers focus on the vehicle’s sale price and forget to factor in the tax for such a large purchase.

The five states with the highest sales tax are:

The cheapest states to own a car in 2026

New Hampshire is the cheapest state to own a car at $21,917 for five years. Oregon is second at $23,097, and Vermont comes in third at $23,667.

Compare the top 10 cheapest states based on the five-year cost of car ownership:

Why do these states cost less?

States that make the cost of owning a car more affordable typically have:

• Low or no state sales tax.

• More rural areas, which leads to fewer claims.

• Lower population density.

The states with the lowest average annual car insurance rates (full coverage) are:

The states with the lowest sales tax are:

• Delaware, Montana, New Hampshire and Oregon have no sales tax.

Moving to a new state? Be prepared for changing costs with this checklist

To be best prepared, check these items before buying a car:

• State minimum car insurance requirements.

• Average car insurance rates in your ZIP code.

• Your state’s sales tax rate.

• Registration and title fees.

• Average annual miles driven in your area.

• Road-condition repair risks.

Why it matters:

Understanding the upfront and recurring costs of owning a vehicle in your state can prevent financial surprises and help you plan your budget, especially if you’re planning to buy a new car after moving.

“We recommend keeping all monthly transportation expenses under 10% of monthly gross income. That means the combined total of your monthly car payment, insurance, fuel, and maintenance should stay under 10% of your pre-tax paycheck. The 10% rule applies to leasing, too. Of course, there’s wiggle room with this rule. It’s a suggestion, not a commandment. Remember that all cars are depreciating assets, so spending more is a tough pill to swallow for financial wellness,” Fischer said.

What determines the total cost of car ownership?

The total cost of car ownership includes all of the annual and one-time costs associated with buying, driving and maintaining a car:

• Sales tax applied to a $30,000 vehicle.

• Gas prices and average miles driven.

• Additional costs from poor road conditions.

Because the cost of a car payment varies widely based on down payment, credit and other factors, the report didn’t include the purchase price of the car in this calculation. These costs are based on a $30,000 car, rounded up from the base MSRP of a 2026 Honda Accord LX of $28,295.

Read the full methodology below.

It’s important to take all of the costs of owning a car into consideration when you’re looking to buy. A car with a lower insurance rate or lower purchase price that translates to less in sales tax can save you a lot of money.

“Many drivers focus on the monthly car payment, but that’s only one piece of the total cost of owning a vehicle,” said Mark Jenkins, spokesman for AAA insurer The Auto Club Group. “It’s important to budget for recurring expenses like registration fees, insurance, fuel, routine maintenance, and unexpected repairs. These costs can vary significantly depending on the type of vehicle you drive and the state you live in, so planning ahead can help prevent surprises and ensure the car you choose truly fits your financial comfort zone.”

What are the key factors behind the cost differences in states?

The biggest factor in the differences in costs between states is car insurance, which varies by thousands of dollars between the cheapest and smallest states. Here’s a quick breakdown of the factors used to calculate overall cost:

• Car insurance: Insurance costs can be the single greatest expense car owners face, especially in states with high average costs due to factors like severe weather and high inflation.

• Sales tax: States with little or no sales tax save drivers thousands of dollars and typically have lower overall car ownership costs.

• Fuel and driving patterns: The cost of gas varies greatly by location, and residents in some states drive more each year than others, per the Federal Highway Administration.

• Road conditions and car repairs: States with poor roads can lead to thousands of dollars in repair costs over five years.

Compare your state on all of these factors below.

Why are ownership costs higher in 2026?

Increasing car insurance costs have been the result of several factors.

• Inflation: The cost of new cars and parts to repair them has gone up dramatically.

• More claims from severe weather: The more claims insurance companies have to pay, the more insurance rates climb.

• Higher repair costs from more complex technology in cars: Cars filled with sensors, cameras and other technology cost more to repair. For example, a simple rear-end fender bender isn’t just a bumper replacement, but also a rear camera and sensors.

• Increased repair labor rates: As more skilled labor is required to repair complex technology, labor costs go up.

• More litigation and fraud in some states: Lawsuits filed against insurance companies cost those companies thousands, and costs are passed on to consumers via rate increases.

While all states face these factors on some level, states that are on the higher end of one or more factors see ownership costs that can exceed $35,000 over five years.

How to lower the total cost of car ownership

Although owning a car is expensive, there are ways to lower the overall costs.

• Shop around for car insurance. Compare quotes from multiple companies to find the most affordable rates. And, if you’re in the market for a new car, compare rates for the models you’re considering before you buy.

• Take advantage of car insurance discounts. You may be eligible for multiple discounts to lower rates, and bundling them offers the most savings.

• Buy a different vehicle. A less expensive vehicle or one with better gas mileage and safety features can save you money over time. If you’re buying used, look for a certified pre-owned vehicle that is less likely to have maintenance issues.

• Drive less if you can. Lower mileage reduces car insurance rates, fuel costs and can even reduce maintenance since there’s less wear on your vehicle.

The high cost of owning a car: Final thoughts

For many people, owning a car isn’t optional, but the costs can be difficult to manage. Being armed with an understanding of the costs beyond your monthly car payment can help prevent a strain on your finances.

Before you buy a car, make sure you understand the total cost of owning that car, not just on the day you buy it, but for years to come.

FAQ: The cost of car ownership

Does moving to another state change how much you pay to own a car?

Yes, moving states can change car ownership costs, affecting insurance rates, registration and other fees, gas prices and maintenance costs.

How much does it cost on average to own a car per year in the U.S.?

The average annual cost of owning a car nationwide is $5,867, but rates vary by state, insurance costs and other factors.

What is the biggest factor in total car ownership costs?

Auto insurance is the single biggest contributor to car ownership costs, and can be almost $4,000 a year depending on your state and driver characteristics.

Resources and Methodology

Insurance.com collected data on car ownership from multiple sources to calculate the five-year cost of vehicle ownership. The research included:

• Average auto insurance costs

• Average number of miles driven by state

• Extra repair costs associated with road conditions, sourced from TRIP, a nonprofit transportation research organization

The following data sources are used to determine the annual cost of ownership. Sales tax is paid once when purchasing the vehicle, but the other costs are annual. Those costs were multiplied by five to arrive at the five-year cost of owning a vehicle, assuming the costs remain constant.

Sales tax rate by state

Researchers used the state’s sales tax rate and calculated tax based on a $30,000 vehicle, according to data from The Tax Foundation.

Auto insurance costs by state

Insurance.com commissioned Quadrant Information Services to field auto insurance rates in all 50 states and Washington, D.C.

Rates are based on:

• Bodily injury liability of $100,000 per person and $300,000 per incident

• Property damage liability of $100,000 per incident

• Comprehensive and collision deductibles of $500

• 12-mile commute, 10,000 annual mileage

Driving and gas costs by state

The average miles per gallon for calculating annual gas costs is 27.1 mpg, derived from the EPA’s new car fuel economy figures. This mpg is a weighted average of the last 15 years of data, with the most recent data receiving the highest weight.

From there, researchers divided each state’s vehicle miles traveled (VMT) per capita by 27.1 mpg to get an average of gallons of gas consumed annually. This was multiplied by the average fuel cost in each state, using AAA’s state gas price averages, to arrive at an average total gas cost.

Repair costs by state

To calculate the cost of repairs, researchers used the average vehicle miles traveled multiplied by AAA’s average of 11.04 cents per mile for maintenance and repairs, including tires.

This story was produced by Insurance.com and reviewed and distributed by Stacker.