Car ownership can cost thousands of dollars more depending on the state. The price of the vehicle is only part of the equation, since insurance premiums, registration fees, fuel, maintenance, and how much people drive can dramatically change the annual bill.
In 2026, the national median for annual car ownership expenses was about $4,003, excluding financing, depreciation, and one-time purchase costs. Several states come in well below that figure, making them especially attractive for drivers trying to keep transportation expenses under control.
1. Iowa
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Estimated Annual Cost: $3,261
Iowa currently ranks as the least expensive state for annual car ownership in MoneyGeek’s 2026 analysis. Drivers benefit from relatively affordable insurance, modest fuel spending, and below-average annual mileage.
Insurance averages about $1,009 per year, while fuel and maintenance costs remain close to $1,000 each.
2. Montana
Estimated Annual Cost: $3,271
Montana comes within just a few dollars of Iowa despite having somewhat higher insurance premiums.
The biggest advantage is how little residents drive. Average annual mileage is among the lowest in the country, helping Montana post exceptionally low estimated fuel and maintenance expenses.
3. Idaho
Estimated Annual Cost: $3,315
Idaho keeps costs low across almost every major ownership category. Insurance averages under $1,000 in the 2026 analysis, while registration and maintenance remain relatively manageable.
The result is an annual ownership bill nearly $700 below the national median.
4. Ohio
Estimated Annual Cost: $3,388
Ohio’s standout advantage is registration. The estimated annual fee is only about $31, one of the lowest figures in the country.
Insurance, fuel, and maintenance also remain below national benchmarks, giving Ohio consistently affordable rather than unusually expensive costs in any one category.
5. North Dakota
Estimated Annual Cost: $3,434
North Dakota drivers benefit from relatively low mileage and affordable fuel expenses. Registration and insurance costs also remain manageable compared with many other states.
Its total annual ownership estimate comes in more than $500 below the national median.
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6. Washington
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Estimated Annual Cost: $3,437
Washington may seem like a surprising addition considering fuel prices in the Pacific Northwest. The difference comes partly from mileage.
Residents average relatively few miles each year, which helps push estimated annual maintenance costs below $1,000.
7. Illinois
Estimated Annual Cost: $3,467
Having Chicago doesn’t prevent Illinois from ranking among the more affordable states for car ownership.
Insurance is the biggest advantage. Average premiums in the study come in below $1,000 annually, helping offset higher fuel and maintenance expenses.
8. South Dakota
Estimated Annual Cost: $3,479
South Dakota drivers don’t log as many miles as residents of many other states, keeping both fuel and maintenance expenses relatively low.
Annual fuel costs are estimated at around $860, among the lowest figures in the country.
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9. Virginia
Estimated Annual Cost: $3,481
Virginia has one particularly impressive advantage: the lowest average insurance cost in MoneyGeek’s 2026 comparison.
At roughly $902 per year, insurance costs help compensate for somewhat higher spending on fuel and maintenance.
10. Rhode Island
Estimated Annual Cost: $3,585
Rhode Island rounds out MoneyGeek’s 10 least expensive states for annual car ownership.
Drivers benefit from low annual mileage, relatively modest registration fees, and maintenance costs close to $1,000 per year.
11. New Hampshire
Five-Year Ownership Cost: Around $21,900
New Hampshire stands out when purchase-related expenses are added to the calculation. The state doesn’t levy a general sales tax, which can save thousands when purchasing a vehicle.
Separate 2026 research from Insurance.com ranked New Hampshire as the least expensive state for total five-year car ownership.
12. Oregon
Five-Year Ownership Cost: Around $23,100
Oregon has another major tax advantage for car buyers: no general state sales tax.
That, combined with relatively affordable insurance, helped Oregon rank second in Insurance.com’s five-year ownership analysis.
13. Vermont
Five-Year Ownership Cost: Around $23,700
Vermont’s biggest advantage is insurance. The state has some of the lowest average full-coverage premiums in the country.
Those savings can add up considerably over several years, particularly for households insuring multiple vehicles.
14. Alaska
Five-Year Ownership Cost: Around $23,900
Alaska doesn’t immediately seem like an inexpensive place to own anything, but car ownership is an interesting exception.
Relatively low insurance expenses, limited annual driving, and favorable taxes help keep long-term vehicle costs lower than in most states.
15. Hawaii
Five-Year Ownership Cost: Around $24,700
Gas may be expensive in Hawaii, but drivers have another advantage: relatively low annual mileage.
Hawaii also has some of America’s lowest average car insurance premiums, helping compensate for the state’s higher fuel prices.
16. Indiana
Five-Year Ownership Cost: Around $26,300
Indiana combines relatively affordable insurance with manageable vehicle expenses and generally good road conditions.
It may not lead in any single category, but keeping several different costs under control can make the total expense of owning a vehicle considerably more manageable.
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