A new report shows that buying and operating a car in 2025 is cheapest in the Midwest and Northeast, while drivers in the West face higher prices across the board, according to business lending platform National Business Capital’s second annual report on “The Best States To Buy and Operate a Car.”

The study indicates the Midwest dominates affordability, while Pacific states rank among the worst, from sales tax and insurance to fuel, fees, and road quality.

The rankings reveal a clear regional divide.

Ohio ranks first, followed by Indiana and Vermont.

The top 10 Cheapest States to own and operate a car in 2025:

1. Ohio (score out of 100): 77.8, Previous Rank: 2nd (+1)
2. Indiana: 76.2, Previous Rank: 6th (+4)
3. Vermont: 72.3, Previous Rank: 1st ( -2)
4. Delaware: 70.7, Previous Rank: 4th (+0)
5. Wisconsin: 65, Previous Rank: 7th (+2)
6. Iowa: 64.6, Previous Rank: 11th (+5)
7. Kentucky: 63.2, Previous Rank: 25th (+18)
8. Massachusetts: 62.8, Previous Rank: 33rd (+25)
9. Pennsylvania: 62.7, Previous Rank: 5th (-4)
10. North Dakota: 62.6, Previous Rank: 23rd (+13)

At the other end, Arizona (50th), Hawaii (47th), and California (45th) rank at the bottom due to soaring gas prices and high used car costs.

The 10 worst states to own and operate a car in 2025:

1. Utah (score out of 50): 41.5; -6 ranks from 2024
2. Maryland Score: 41.4, -21
3. New Mexico: 40.7, -29
4. Washington: 40.4, +2
5. California: 39.2, +4
6. Colorado: 34.0, +2
7. Hawaii: 33.1, -29
8. Nevada: 28.6, +2
9. Oklahoma: 28.2, -23
10. Arizona: 13.9, -7

The data shows drivers out West pay a steep premium.

Pacific states average $4.24 a gallon for gas, nearly 50 percent more than the South, and used cars in the Mountain West are listed at more than $25,000 on average, compared to under $15,000 in the Northeast. Only one state east of the Mississippi, Maryland, fell into the bottom 10.

Meanwhile, the South remains a mixed bag, the report found.

Low fuel costs provide relief at the pump, but many states layer hidden expenses, like personal property taxes and dealer documentation fees.

Kentucky (7th) is the South’s lone Top 10 finisher, while most of its neighbors sit in the middle of the pack.

The Midwest dominates the findings with an average score of 59.4 out of 100, making it the most affordable region overall, led by Ohio (1st) and Indiana (2nd).

The Northeast has the cheapest cars, with used car listings averaging just $14,904 in the Northeast, roughly 10 percent cheaper than the Midwest and 70 percent lower than the Mountain West.

Delaware, Vermont, and Massachusetts all land in the Top 10.

Pacific states pay an average of $4.24 per gallon, 47 percent higher than in the South. California tops the list at $4.61 per gallon, contributing to its 45th-place finish.

Despite low gas prices, the report found that hidden costs like property taxes and fees drag down Southern states, with only Kentucky cracking the Top 10 (7th).

The Midwest also scored best for smooth roads (88.1 percent acceptable rating), while Pacific states had the bumpiest at just 73.9 percent.

“Americans love their cars, but no one loves the cost,” said Joe Camberato, CEO of National Business Capital. “It’s shocking how different those costs are at both ends of Route 66.”

The metrics considered when reviewing the data were:

• Dealer Document Fees (10%)
• Median Used Car Listing Price (30%)
• Average Gas Price (15%
• Sales Tax (12%)
• Fees and Taxes (12%)
• Insurance Costs (15%)
• Road Condition (10%)