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Tennessee ranks as least expensive state to operate and maintain a car in U.S. - Chattanooga Times Free Press

Tennessee is the least expensive state in the nation to operate and maintain a car, according to a new study.

Thanks to cheaper gas and insurance rates and better roads and highways in Tennessee than in most states, analysts from the personal finance website WalletHub calculate that motorists in the Volunteer State can drive their cars for less money than in any other state.

Jill Gonzalez, an analyst for WalletHub.com, said Tennessee has better roads and less congestion, which limits vehicle costs per driver to the lowest of any state.

"What sets the state apart is the total extra vehicle operating cost per driver, which is the lowest nationwide," she said. "This refers to any costs that are a result of driving on roads in need of repair, lost time and fuel due to congestion-related delays and the cost of traffic accidents in which roadway features were a likely contributing factor."

Another key advantage for Tennessee is cheaper gas. Despite a jump of nearly 18 cents a gallon in average fuel prices over the past month, Chattanooga gas prices, on average, are nearly 12% below the U.S. average, according to a separate survey released Monday by the website GasBuddy.com.

Patrick De Haan, head of petroleum analysis for GasBuddy, said Tennessee benefits from its ready access to fuel refineries and pipelines, including a refinery in Memphis. While gas prices are now at their highest levels since before the pandemic hit the economy nearly a year ago, De Haan said states like Tennessee are likely to maintain lower fuel prices than in most other states.

"The biggest single factor in why Tennessee gas prices tend to be lower is state gas taxes," De Haan said.

Tennessee's fuel taxes average 7.8 cents a gallon less than the national average for regular gas and 10.5 cents a gallon less for diesel fuel.

Motor fuel is one of the most-taxed goods in America, to help fund America's roads and highways. In addition to the federal levy of 18.4 cents per gallon for regular gasoline and 24.4 cents a gallon for diesel fuel, the average state tax is about 23 cents a gallon. The American Petroleum Institute estimates there is the equivalent of another 11 cents a gallon in local sales tax, gross receipts and oil inspection fees and charges, bringing the average tax on a gallon of fuel to about 52 cents a gallon.

Auto insurance rates are also lower in Tennessee due to lower repair costs and fewer accidents than in more congested and expensive states. A study by insure.com last fall said the average auto insurance premium in Tennessee last year was $1,357, or 10.5% less than the U.S. average of $1,517. Tennessee auto insurance premiums were less than half those in Michigan, the most expensive state for car insurance with average annual premiums of $2,878.

Other surveys by the personal finance website ValuePenguin.com also have ranked Tennessee among the lowest priced states for auto insurance.

Although Tennessee had the lowest operating costs for vehicles, the state ranked as the fifth-best state in the nation in another WalletHub analysis of the best states overall to drive in, based upon congestion, road conditions and operating costs. Rural and western states tend to have less congestion than do more populated areas, but Tennessee benefits from less highway damage from winter weather compared with most northern states.

Congestion cost U.S. drivers $88 billion in 2019, as well as an average of 99 hours of their time. Due to COVID-19, however, 2020's traffic congestion numbers are likely to be much lower overall.

WalletHub also looked at how safe and well maintained are America's roads. The World Economics Forum only places the U.S. at rank 17 of 141 when it comes to road quality.

Tennessee roads, however, rank among the best in the nation, according to WalletHub.

Other least expensive states to operate a car are: 

2. Indiana

3. North Carolina

4. Kentucky

5. Ohio

6. South Carolina

7. Virginia

8. Alabama

9. South Dakota

10. Wisconsin

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

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Tennessee ranks as least expensive state to operate and maintain a car in U.S. - Chattanooga Times Free Press
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