The True Cost of Owning a Car in California

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Recent data from AAA posts the average cost to own a car in California at $12,182 per year, which factors in the cost of fuel, maintenance, insurance, depreciation and more. When looking at ownership costs across the nation, Californians’ car ownership costs are above average.

Keep reading to learn more about the hidden costs that go into owning a car in California and tips for saving money on auto insurance coverage.

Key Takeaways

  • California drivers spend $1,015 per month on average for fuel, maintenance, insurance, depreciation and other car ownership expenses.
  • Drivers in California have above-average car ownership costs, spending 18% more per year than the national average.
  • When you register your car or renew your registration, you will need to pay fees based on the current market value of your vehicle.
  • Actual car ownership costs can vary considerably based on the current market value of your car, your driving history, annual mileage, how well you maintain your car and more.

What Is the Average Cost To Own a Vehicle in California?

Drivers in California pay $1,015 per month in fuel, maintenance, insurance, depreciation and other costs related to owning a new vehicle. This is a 12% increase from 2022 and the reason for this price hike can be attributed to a few reasons, including cars depreciating more quickly, global supply chain issues, limited car inventory and car prices going up.[1]

Let’s delve into the various costs that go into owning a car.

Average Car Loan Interest Rates in California

As of the third quarter of 2023, the average auto loan interest rates were 7.03% for a new car and 11.35% for a used car.[2] Based on these rates and depending on whether you buy a new car ($48,247 on average) or used car ($26,091), you may be paying $6,575.82 to $7,291.91 in interest over the life of a 60-month term with 20% down.[3][4] If split evenly over five years, that's paying about $1,450 in interest each year.

Car Price

Interest Rate

Total Interest With 20% Down

$48,247 (New)



$26,091 (Used)



Keep in mind that credit score can affect your interest rates and having good credit can help you lock in a lower rate.

Average Car Repair Costs in California

The average annual cost for automotive repair in California sits at approximately $416. This figure takes into account both labor and parts costs, with labor costing around $145 and parts averaging $271.[5] It's important to note that these costs can vary depending on the specific maintenance needed and the vehicle’s year, make and model.

Average Cost of Gas in California

The average cost of regular gas is $4.65 per gallon as of February 20, 2024.[6] Considering that the average small car holds about 12 gallons of gas and assuming you fill up your tank from empty to full twice a month, Californians are looking at an average cost of around $1,339.20 per year for fuel.[7]

Average License Plate and Registration Fees

In California, it costs $74 to register your vehicle or renew its registration. Other fees may apply as well, such as a $20 fee for your smog abatement and $27 to replace your license plate. In addition, California drivers are required to pay fees based on their vehicle’s value. For example, if you bought a new car valued at $48,247, the transportation improvement fee and vehicle license fee alone would set you back $507.61.[8]

Below, we’ve outlined some of the fees you will be required to pay to the California DMV:

Type of Fee




California Highway Patrol Fee


Alternative Fuel/Technology Smog


Smog Abatement


Road Improvement Fee (RIF)


Transportation Improvement Fee

$32 to $227 depending on vehicle value

Vehicle License Fee

0.65% of purchase price or vehicle value

Average Cost of Car Insurance in California

For a 35-year-old driver with a clean driving record in California, it costs $1,659 per year on average for full coverage or $506 per year for minimum liability coverage.[9] If you’ve finished paying off your car, you can opt for minimum liability insurance to save money but you will not be insured for physical damages to your car.

California Toll Roads

The cost of toll roads in California varies depending on the specific road, the distance traveled and the vehicle type. For example, the toll roads operated by the Transportation Corridor Agencies (TCA) in Orange County, which include state routes 73, 133, 241 and 261, collect tolls electronically and offer various payment methods, such as FasTrak accounts and online payments for visitors or infrequent users​​.[10] Drivers may face toll rates ranging from $1.73 to $18.36 depending on the toll road, with Prepaid FasTrak account holders earning a discounted rate.[11]

California Car Taxes

The standard sales tax rate for vehicle purchases in California is 7.25%, which includes state and local taxes. However, the total tax rate can vary depending on additional local taxes, which might raise the overall tax rate, with rates in some cities ranging from 0.125% to 1.50%.[12][13]


Unfortunately, cars depreciate quickly with your vehicle potentially taking a 20% depreciation hit after the first year. After five years, your car may be worth only 40% of what you bought it for.[14] To put it into perspective, if you bought your car for $40,000, it would be worth only $32,000 after one year and worth $16,000 after five.

How To Save Money on Car Insurance in California

While certain costs may be out of your control, such as your registration and renewal fees or fuel, there are steps you can take to lower the cost of your auto insurance. One of the simplest ways of saving on auto insurance in California is to ask your carrier about available discounts. Your insurer might offer a discount for maintaining a clean driving record, bundling your home and auto insurance, completing a defensive driving course or even earning good grades.

You can also shop around for better pricing through different providers. Of course, you don't want to get bogged down by providing your vehicle information, claims history, date of birth and other details each time you contact an insurance carrier. It's better to let SmartFinancial do the heavy lifting. Just complete one questionnaire about your coverage needs and budget to get matched with an auto policy.

Ready To Shop for Cheaper Auto Insurance?


Is California the most expensive place to own a car?

It can be expensive to own a car in California since Californians pay 18% more than what drivers across the nation pay in car ownership costs.[1]

How much are taxes on a car in California?

In California, the sales tax on the purchase of a vehicle can vary based on county and city rates, with a statewide base rate of 7.25%.[11] Additional local taxes can make the total rate higher.

How much do license plate tags cost in California?

License plate tags cost $27 in California.[8]

Where does it cost the most to own a vehicle in the U.S.?

Car owners will find that it is most costly to own a vehicle in Wyoming. Mississippi and Texas.[15]


  1. AAA. “Annual Cost of Owning a New Car Soars to Over $12,000.” Accessed Feb. 20, 2024.
  2. Yahoo! Finance. “The Average Amount Financed for New and Used Vehicles Decreased in Q3 2023, Demonstrating a Positive Sign for Automotive Shoppers.” Accessed Feb. 20, 2024.
  3. Kelley Blue Book. “Average New Car Price Down Year-Over-Year for Third Straight Month.” Accessed Feb. 20, 2024.
  4. Kelley Blue Book. “Used Car Prices Fall But Selection Remains Tight.” Accessed Feb. 20, 2024.
  5. CarMD. “State Repair Cost Rankings.” Accessed Feb. 20, 2024.
  6. AAA. “Gas Prices.” Accessed Feb. 20, 2024.
  7. JD Power. “How Many Gallons of Gas Does A Car Hold?.” Accessed Feb. 20, 2024.
  8. California Department of Motor Vehicles. “Registration Fees.” Accessed Feb. 20, 2024.
  9. Nerdwallet. “How Much Is Car Insurance in California?” Accessed Feb. 20, 2024.
  10. The Toll Roads. “Map & Rates.” Accessed Feb. 20, 2024.
  11. The Toll Roads. “Rate Cards: Two-Axle vehicles and Motorcycles,” Page 1-3. Accessed Feb. 20, 2024.
  12. California Department of Tax and Fee Administration. “California City & County Sales & Use Tax Rates.” Accessed Feb. 20, 2024.
  13. Calif. Dept. of Tax and Fee Administration. “CDTFA-105, District Sales and Use Tax Rates.” Accessed Feb. 20, 2024.
  14. California Department of Motor Vehicles. “Vehicle Registration & Licensing Fee Calculators.” Accessed Feb. 20, 2024.
  15. Kelley Blue Book. “How To Beat Car Depreciation.” Accessed Feb. 20, 2024.
  16. Aftermarket Matters. “The Most and Least Expensive States for Car Ownership.” Accessed Feb. 20, 2024.

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