Making the final car payment shortly before retirement feels like eliminating an entire category from the monthly budget. The $450 or $600 payment disappears, but unfortunately, the cost of owning the car doesn’t disappear with it. Insurance, gasoline, registration, maintenance, tires, repairs, and eventually replacing the vehicle can still consume thousands of dollars each year. AAA’s 2025 Your Driving Costs analysis estimated fuel at about 13 cents per mile and maintenance, repairs, and tires at another 11.04 cents per mile for the new vehicles studied, or roughly 24 cents per mile combined before insurance, registration, depreciation, and other ownership costs enter the picture. A realistic retirement car budget therefore needs to answer a different question than “Is the car paid off?”
So, how much should you still be budgeting for driving, really? Here are several things to consider…
