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The Most And Least Expensive States To Own A Car In 2025

Owning a car isn’t just about paying for gas and insurance—it also includes repair costs, sales tax, excise tax (if you’re lucky enough to live in such a state) and even how far you drive every year. Some states make car ownership an expensive endeavor, while others keep it relatively affordable. According to a new study from LendingTree, Nevada, Florida, and Louisiana top the list as the most expensive states to own a car. Meanwhile, drivers in New Hampshire, Maine, and Ohio enjoy the lowest costs.

The Most Expensive States to Own a Car

If you live in Nevada, Florida, or Louisiana, you’re likely paying a premium for owning a car. The biggest factor? Sky-high insurance rates.

1. Nevada

Total Annual Cost: $6,119
Insurance Premiums: $3,439
Fuel Costs: $1,937
Sales Tax: $345
Repair Costs: $398

Nevada takes the top spot due to its staggering auto insurance rates, which account for over half of the total cost of car ownership. With major urban centers like Las Vegas, high traffic density, and frequent accidents, insurers charge steep premiums to cover their risks.

A mechanic prepares to do a tire rotation during an oil change at a Pep Boys - Manny Moe & Jack service center in Clarksville, Indiana, U.S., on Wednesday, June 3, 2015.

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2. Florida

Total Annual Cost: $5,682
Insurance Premiums: $3,267
Fuel Costs: $1,726
Sales Tax: $293
Repair Costs: $396

Florida follows closely behind, also burdened by high insurance rates. The state’s no-fault insurance system and frequent hurricanes contribute to costly claims, making coverage more expensive for drivers.

3. Louisiana

Total Annual Cost: $5,663
Insurance Premiums: $2,989
Fuel Costs: $1,886
Sales Tax: $400
Repair Costs: $389

Louisiana’s combination of high insurance rates and some of the highest sales tax costs in the country makes it the third most expensive state for car ownership. The state’s legal environment, which tends to favor large settlements, contributes to its elevated insurance rates.

The Least Expensive States to Own a Car

On the flip side, drivers in New Hampshire, Maine, and Ohio enjoy significantly lower costs of car ownership, largely due to lower insurance premiums and, in some cases, the absence of sales tax.

1. New Hampshire

Total Annual Cost: $3,030
Insurance Premiums: $1,278
Fuel Costs: $1,381
Sales Tax: $0
Repair Costs: $371

New Hampshire is the cheapest state to own a car, thanks to its low insurance premiums and the fact that it does not charge a sales tax. Despite relatively high fuel costs compared to the rest of the country, New Hampshire still manages to keep the long-term costs of vehicle ownership low.

A driver works on their vehicle in the parking lot of an AutoZone store in the Queens borough of New York, US, on Saturday, Dec. 2, 2023.

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2. Maine

Total Annual Cost: $3,543
Insurance Premiums: $1,243
Fuel Costs: $1,721
Sales Tax: $230
Repair Costs: $349

Maine boasts the lowest average car insurance costs in the nation and relatively low sales tax, contributing to its position as the second-least expensive state for car ownership.

3. Ohio

Total Annual Cost: $3,544
Insurance Premiums: $1,373
Fuel Costs: $1,515
Sales Tax: $303
Repair Costs: $354

Ohio rounds out the top three, with affordable insurance and relatively low fuel costs keeping overall expenses in check.

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Why insurance costs drive up the price of car ownership

Insurance is the biggest factor influencing car ownership costs in high-expense states. Nevada, Florida, and Louisiana all have insurance premiums exceeding $2,900 per year, with Nevada drivers paying the most at $3,439 annually. In contrast, states like Maine and New Hampshire have the lowest insurance rates, with Maine residents paying just $1,243 per year on average.

Several factors influence these insurance rates, including:

State regulations: Some states mandate more extensive coverage, increasing costs.
Accident rates: More accidents mean higher insurance claims and premiums.
Fraud and litigation: States with higher rates of insurance fraud and lawsuits, like Louisiana, see significantly higher premiums.

Other costs of car ownership

While insurance plays a major role, other costs also affect how much you’ll spend on your vehicle each year.

Fuel Costs

The amount you pay for fuel depends not just on gas prices, but also on how much you drive. Wyoming drivers face the highest annual fuel costs ($2,743) because they drive an average of 21,588 miles per year, far above the national average of 14,050 miles.

Sales Tax

Sales tax adds up, especially in states like Louisiana ($400 per year), Tennessee ($400), and Arkansas ($396). On the other hand, states like Delaware, Montana, New Hampshire, and Oregon charge no sales tax on car purchases.

Repair Costs

Annual repair costs are fairly consistent across states, averaging around $387 per year nationwide. However, some states, like Colorado ($417) and Georgia ($408), see slightly higher maintenance expenses.

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How to lower your car ownership costs

If you live in a high-cost state, there are still ways to save money on car ownership:

Shop around for insurance: Compare rates from multiple insurers to find the best deal.
Consider higher deductibles: Raising your deductible can lower your monthly premium. Just don’t raise it higher than you’re able to pay in the case of an accident.
Drive less: If possible, reducing your mileage can help decrease insurance rates and fuel costs.
Maintain your vehicle: Regular maintenance can prevent costly repairs down the line.
Relocate (if practical): We wouldn’t necessarily switch states simply to save on car costs, but if you’re already considering a move the cost of car ownership could be another factor to include in your decision.

Car dealer lot

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Final thoughts

Where you live has a huge impact on how much it costs to own a car. In states like Nevada, Florida, and Louisiana, high insurance rates make ownership expensive. Meanwhile, places like New Hampshire and Maine offer significant savings.

For those living in high-cost states, making smart decisions—like shopping for better insurance rates or reducing mileage—can help minimize expenses. Understanding the full picture of car ownership costs can help drivers budget more effectively and, hopefully, make informed choices about their vehicles, whether they’re looking to buy, move, or simply cut down on their annual costs.

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