Calculating the average cost by state is a complex and time-consuming process, taking in a variety of different points. First and foremost, this is representative of the average individual salary and the general advice that a car should be no more than 10 percent of your earnings.
To make it as comprehensive as possible, we took into consideration these factors on a per-state basis: Average annual individual salary and hourly rates, insurance quotes, gasoline prices (we’re weighing exclusively combustion-powered cars for simplicity’s sake), and the monthly household expenses — bills like rent/mortgage, power, water, etc. The sources we used all came from official government bodies or accredited organizations, such as AAA, World Population Review, Forbes, U.S. News, and the U.S. Census Bureau.
To calculate the actual number, what we did was account for all of these factors to come up with a baseline average of $88,648.92 needed for a new car across the entire United States. That is $500 for a car payment, plus $336 for gasoline, maintenance, and other upkeep costs, paid per month, for a total of $10,632 per year. Next, given that it’s a new, fuel-efficient car and various bills would be covered by the warranty, we downsized that again to $615.61 per month for all expenses on a Toyota Corolla, at its absolute cheapest. That’s 10 percent of the aforementioned salary per month.
Each state was then calculated based on its cost of living index, meaning a state with a CI of 100.0 would require exactly $88,648.92 to afford this car at a 10-percent salary metric. However, given the breadth and variety of commute times and gas prices, this number varies greatly sometimes within a single state, so your mileage may vary.