I own a car · Guide for Alaska
The real cost of owning a car, by vehicle type
The price is the least of it. What you pay every year in depreciation, insurance, fuel and maintenance decides whether the car suits you.
The average new car in the United States costs $11,577 a year to own and operate: about 77 cents per mile at 15,000 miles (AAA, 2025). And the biggest piece is not gas or the shop: it is depreciation, the money the car loses in value while it sleeps in your driveway. This guide takes that number apart by vehicle type so you can compare it with yours.
A note on wordingThis is not a "total cost of ownership": it leaves out parking, tolls, tickets and the time you lose. These are the six components AAA measures, with their figures and date. What is not here is not measured.
What makes up the average ($11,577 / year)
| Component | 2025 average | What you can control |
|---|---|---|
| Depreciation | $4,334 / yr | Almost all of it: a 3-year-old used car has already taken the biggest drop. It is the strongest financial argument for buying used. |
| Insurance | $1,694 / yr | Little. Compare every year and raise the deductible if you have savings. What changes by state, below. |
| Finance | $1,131 / yr | All of it: short term, big down payment, pre-approved rate. |
| Fuel | 13¢ / mile | Depends on the car and how you drive. A hybrid cuts it nearly in half. |
| Maintenance, repair and tires | 11.04¢ / mile | Depends on the brand and on doing it on time. See the maintenance schedule. |
| License, registration and taxes | $813 / yr | Almost nothing per year. The hit is the tax at purchase; see your state's section below. |
By vehicle type (cents per mile, AAA 2025)
| Type | ¢ / mile | At 15,000 mi / yr* | Quick read |
|---|---|---|---|
| Small sedan | 55.87 | ≈ $8,380 | The cheapest to own. Low depreciation, low fuel. |
| Hybrid | 63.94 | ≈ $9,590 | Pays back its premium through fuel if you drive in the city. |
| Subcompact SUV | 66.11 | ≈ $9,920 | The middle ground most people buy. |
| Medium sedan | 66.37 | ≈ $9,960 | More room than the small one for about the same cost. |
| Compact SUV | 68.53 | ≈ $10,280 | The best-selling segment; its cost reflects pricier insurance and tires. |
| Electric | 71.21 | ≈ $10,680 | Cheap fuel, high depreciation and insurance. Better if you charge at home. |
| Mid-size pickup | 79.11 | ≈ $11,870 | Capability you pay for every mile. |
| Medium SUV | 83.89 | ≈ $12,580 | Three rows, high fuel, high depreciation. |
| Half-ton pickup | 98.54 | ≈ $14,780 | The most expensive to own. If you don't tow, you are paying for capability you don't use. |
*Simple multiplication of AAA's per-mile figure by 15,000 miles, rounded. AAA calculates on a new car, five years and 75,000 miles, national average. A used car has less depreciation and finance cost, but more maintenance.
What changes in Alaska
- Insurance. Alaska's liability minimum (50/100/25) is higher than in many states. On top of that, the law requires the policy to carry uninsured and underinsured motorist coverage in the same amounts, which raises the premium. Ask your insurer for a price on the VIN before you buy.
- Tax at purchase. Alaska has no state sales tax on a car purchase. Some cities and boroughs charge their own local sales tax, depending on where you buy. What you do pay at registration is the municipal Motor Vehicle Registration Tax (MVRT) if you live in an area that collects it, such as Anchorage or Mat-Su; it depends on vehicle type and age and is not charged again when the car changes owners while the registration is current. A trade-in does not lower any state tax, because there is no state sales tax and the MVRT is figured from the vehicle's type and age, not its price. If your municipality charges a local sales tax (AS 29.45.650 is what allows it), how it treats a trade-in is set by that municipality's own ordinance, not by the state. Paying the MVRT replaces any local use or ad valorem tax on that same vehicle (AS 28.10.431(g)).
- Climate. Extreme cold drains the battery and thickens fluids; many owners use a block heater and cold-weather oil. Studded tires are allowed only in season (outside May 1–September 15 north of 60° latitude and at any latitude on a paved part of the Sterling Highway, and April 15–September 30 south of 60°; to drive on studs or chains out of season you need the Special Traction Permit, form 866, in the car), and gravel roads and de-icing products are hard on the windshield, paint and underbody.
- Comprehensive coverage. It is what pays for hail, flood, fire and theft. If the car is worth anything, it is not optional.
How to use this before you buy
- Take the price you can pay and subtract day-one tax and fees.
- Find the vehicle type in the table and multiply the cents by your real yearly miles (look at your current car: the odometer doesn't lie).
- Get an insurance quote on the specific VIN. It is the line that surprises most.
- If the yearly total is more than you can sustain, step down a segment. A small sedan costs half what a half-ton pickup costs every year, not just on purchase day.
Keep your vehicle information together
Sources
- AAA — Your Driving Costs 2025 (fact sheet, September 2025)
- AAA — New vehicle costs drop to $11,577 (press release)
- Alaska DMV — Registration Fees & Biennial MVRT, 2026 chart (notes on MVRT)
- Alaska DMV — Alaska Division of Motor Vehicles (Department of Administration)
This guide informs; it is not legal or financial advice, nor an offer, quote or appraisal. Every figure carries its source and date; check it is still current before you decide.
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