Between insurance, gas prices and upkeep, maintaining a car is a long-term expense: The costs of ownership don't stop when your loan or lease is paid off. And, depending on what state you live in, those expenses can be much higher or lower, according to industry analyses.
The most expensive state to own a car, for example, is Michigan, where the average cost for three years of ownership is $16,239.29. That's a more than $6,000 difference compared to the cheapest state of New Hampshire, where the average three-year cost is just over $10,000.
Financial website GOBankingRates collected data from AAA.com, CarInsurance.com, CarMax.com, CarMD.com, individual state Department of Motor Vehicle sites, Kelley Blue Book and the National Conference of State Legislatures, to determine the costs of owning a car in all 50 states. The data totals the cost of buying and owning a car for three years for the following six metrics: annual gas costs, assuming you fill up a 14-gallon tank once a week; annual insurance premiums; car sales tax; average maintenance and repair; and title and registration fees.
Based on that data, here are the 10 most affordable states to own a car:
1. New Hampshire
Costs for three years of ownership: $10,033.49
2. North Carolina
Costs for three years of ownership: $10,458.23
3. Virginia
Costs for three years of ownership: $10,717.46
4. New Mexico
Costs for three years of ownership: $11,154.68
5. Missouri
Costs for three years of ownership: $11,158.09
6. Ohio
Costs for three years of ownership: $11,166.10
7. Montana
Costs for three years of ownership: $11,167.41
8. Mississippi
Costs for three years of ownership: $11,169.20
9. Alaska
Costs for three years of ownership: $11,258.09
10. Oregon
Costs for three years of ownership: $11,322.84
"When budgeting for a car, many financial experts recommend limiting auto-related expenses to around 10 percent to 20 percent of income," the study notes. "But budgeting can be tricky when auto loan payments, car insurance premiums [and] vehicle maintenance add up."
Award-winning financial advisor Suze Orman and car aficionado Jay Leno agree on a way to save money, no matter where in the country you are, based on how you pay for the car itself: Buy, don't lease.
While monthly lease payments can be lower than loan payments, they can add up considerably in the long run. And once you pay off a loan, it's gone for good, whereas, if you lease, at the end of your term, the monthly payment will be gone, but your car will be gone, too.
"I always think it's better to buy," Leno tells CNBC Make It. "Everyone seems to lease now," and "thinks you can write off this and write off that. But at the end of the lease," he says, you won't have anything to show for it.
Once you have a car, stick with it for "as long as you can," Orman advises, and look into refinancing options for your loan if you have good credit. And, if you're car shopping, stay within your budget. "The car you want may be too expensive," she says, but "the car you need can be very affordable. All it takes is a willingness to only shop for cars that make financial sense."
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Video by Mary Stevens
