Financing makes a car more expensive over time due to the cost of borrowing.
: State-imposed taxes calculated as a percentage of the purchase price (e.g., 7% on a $20,000 car adds $1,400).
: Paid to the state for license plates and legal ownership documentation.
The true cost of buying a car extends far beyond the sticker price or monthly loan payment. According to 2025 AAA data, the average annual cost of owning a new car is approximately , factoring in everything from fuel to depreciation. 1. Upfront "Out-the-Door" Costs
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