How to Plan for Monthly Car Costs

1. Calculate Your Monthly Car Costs

The first order of business is ballparking your monthly vehicle costs. While some expenses, like your recurring loan payment, are pretty straightforward, others may require a little more research. Below are the most common monthly car costs to consider.

Your Monthly Loan or Lease Payment

As of the third quarter (Q3) of 2024, the average monthly car payment for a new car loan is $737, according to Experian's State of the Automotive Finance Market report. That number drops to $520 for a used car loan. The amount you'll pay is largely determined by your:

• Down payment: The more you put down, the less you'll have to finance. And a smaller loan could result in a more reasonable monthly payment.
• Loan term: Opting for a shorter loan term will result in a larger monthly payment, but you'll pay less interest over the life of the loan. The opposite is also true.
• Interest rate: A strong credit score can help you lock down a better interest rate on a car loan. Experian's Q3 2024 data found that annual percentage rates (APRs) can be as high as 21.55% for folks who have deep subprime credit. Interest rates can also vary depending on the lender.

Auto Insurance

Your car insurance premiums are determined by your age, location, driving record, level of coverage and car type, among other factors. In some states, insurers might also consider your credit-based insurance score when calculating your rate. This is different from the credit scores lenders use, but it's similarly affected by your credit history.

Recent Experian data puts the average cost of car insurance at around $192 per month. It's also worth mentioning that, as of January 2025, average auto insurance costs saw a year-over-year increase of more than 11%, according to the U.S. Bureau of Labor Statistics (BLS). You could face higher out-of-pocket costs if you have an electric vehicle, as these cars are typically more expensive to insure.

Shopping around can help you find the best deal on auto insurance, even if your policy isn't up for renewal. Using Experian's auto insurance comparison tool allows you to see quotes from top car insurance companies in one place so you can get the coverage you need at the best price.

Learn more: Factors That Affect Your Car Insurance Costs

Gas

How much you'll spend on gas each month depends on the type of car you have, how much you drive and your local gas prices. As of February 21, 2025, the national average gas price is roughly $3.16 per gallon, according to AAA. For more context, BLS data found that the average household spent $2,449 on gas in 2023. That works out to about $204 monthly.

Meanwhile, the average electric vehicle owner spends around $69 per month charging their battery with a home-charging station, according to Kelley Blue Book. But that number could be much higher for drivers who depend more on public charging stations.

Maintenance and Repairs

You'll want to keep up with routine maintenance to avoid inconvenient (and expensive) repairs down the road. Costs here can vary widely depending on the car's make, model and maintenance needs.

If you get your car serviced by a dealership, you can request a service schedule for the coming year. For example, they may suggest you come in every 5,000 miles for an oil change and inspection. You can use this information to prepare your budget and predict your monthly costs.

Repairs are another story. According to Kelley Blue Book, the average car repair costs $548. Your insurance policy might cover some of it (depending on the reason for the repair), but you'll still have to meet your deductible before receiving a payout.

2. Look for Ways to Cut Costs

While some things, like the price of gas, are out of your control, there are steps you can take to help reduce your monthly car costs. That might include:

• Modifying your car insurance policy: Gathering quotes and comparing rates and coverage from multiple insurers could lead to a lower premium. You might also get a better rate by looking for discounts and increasing your deductible. Just keep in mind that if you file a claim, you could face higher out-of-pocket costs.
• Curbing your fuel costs: You could save money on gas by using gas apps and comparing prices, joining a fuel rewards program, using a gas rewards credit card, carpooling, driving less or choosing more fuel-efficient routes.
• Being strategic about maintenance and repairs: Whether your car is due for a routine inspection or needs a repair, shop around and compare prices. You might find a local mechanic or body shop with good reviews and lower prices than a nearby dealership.

3. Adjust Your Budget

You'll want to make room in your monthly budget for the costs mentioned above. If your car insurance premium is due every six or 12 months, you can break down the monthly cost and account for that in your spending plan. As for repairs, it might be useful to set aside a small cushion of money to draw on if the need arises. It's wise to save up at least enough to cover your deductible.

Learn more: How to Use Sinking Funds to Save Toward Your Goals

The Bottom Line

Certain costs go hand in hand with buying or leasing a car. And while depreciation technically isn't a monthly cost, it will likely impact your vehicle's resale value. During the first five years of owning a new car, its value will decline by about $4,680 per year, according to AAA. Taking these things into consideration can help you plan for future expenses and sidestep financial surprises later on.