Millennials: 3 Car Costs That Hit Harder Than Your Monthly Payment
The millennial generation (or Gen Y, those born between 1981 and 1996) has been driving for years. If there’s one thing that generation should have learned over time, it’s that the price of owning a car is more than just a monthly car payment.
Indeed, there are a number of less obvious – but still expensive – monthly car fees that, when added together, can hit your bank account just as hard as the average car loan repayment.
Below are three such fees which, while not as obvious as that loan bill, are still part of any millennial’s annual car expenditures.
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Depreciation
Vehicle depreciation is the general reduction in a new car’s value the second its owner drives it off the car lot. Most new cars depreciate in value by at least 20% in their first year of ownership, and up to 60% over the next five years. Essentially, your new car begins losing money and value the second the keys are handed to you – a trend that carries on for years to come.
Currently, MoneyGeek reports that the average auto depreciation rate in 2026 is $4,334 annually. That means you lose approximately $361 per month as your new car decreases in value and potential resale value with every passing moment.
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Insurance
While millennials, being older, generally have lower insurance rates than Gen Z, that monthly insurance bill can still take a significant bite out of the average Gen Y bank account. Car and Driver has noted that millennials, on average, pay around $140 monthly for basic car insurance coverage. At minimum, that’s an extra $1,680 per year that goes into your car simply for existing.
Fuel
In 2012, the year that the last of Gen Y was turning the driving age of 16, gas prices were roughly $3.60 per gallon – now compare that to the current average of $4 (with some areas even exceeding $5.40). Even before the Iran war sent 2026 gas prices into the stratosphere, filling up gas tanks was becoming increasingly expensive.
On average, drivers now spend about $2,000 on fuel costs per year, or nearly $170 per month. Given that millennials are the leading age group performing gig work like driving for rideshare platforms and food delivery services (per TransUnion), fuel costs are a definite concern for this generation, perhaps more so than any other currently on the road.
Bottom Line
Add those average costs together, and a millennial car owner is looking at nearly $670 in extra car costs monthly, and that’s not even counting the already hefty and pesky car loan.
LendingTree has reported that the average monthly bill for a new car loan is $767. When that loan amount is coupled with additional costs such as depreciation, insurance and fuel, a Gen Y car owner can expect to spend $1,437 on the car per month.
Before buying a new set of wheels, keep in mind that your monthly auto bills include more than just a pricey car payment, and save accordingly.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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