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Hawaii is the most expensive place to own a car, not just because gasoline prices are the highest in the country. Insurance, financing and depreciation also take a big bite. Average 5-year cost is $53,163.
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updated 7/27/2011 8:00:14 AM ET 2011-07-27T12:00:14

If you bought a car in Alaska or Hawaii you’d probably expect it to cost more than if you bought it in, say, Michigan or Ohio, because of the extra freight costs involved. Gas prices are higher in those distant states, too, so you’d expect the car to cost more in the long run.

But why should it cost $9,000 more to own and operate a car in Connecticut than it does in New Hampshire, just 100 or so miles up the road?

The answer is because New Hampshire has no sales tax, and the cost of everything from insurance to fuel and maintenance is lower there. So a $29,000 car will end up costing $49,890 over five years if you live in Connecticut, but only $40,602, if you reside in New Hampshire.

Forbes.com slideshow: Best and worst states to own a car

Where you live can make a big difference in the cost of owning a vehicle — a lesson worth remembering next time you’re shopping for a new car. The price can differ state-by-state, thanks to regional incentives, for instance, and destination, or freight charges, can vary depending on the distance the car has to be shipped. Beyond that, you need to consider more than just the sticker price or monthly lease payment. You need to insure it, finance it, maintain it and keep the gas tank filled.

Automotive research website Edmunds.com lets car shoppers see the big picture with its proprietary "True Cost to Own" formula, which takes note of where you live to calculate your average five-year cost for depreciation, financing, taxes, fees, insurance premiums, fuel costs, maintenance and repairs on a range of new and used vehicles.

Forbes asked Edmunds’ analysts to come up with a sales-weighted average by state, which revealed that New Hampshire, South Dakota and South Carolina are the best states to own a vehicle, while Hawaii, California and Alaska are the most expensive. The gap between the cheapest state, New Hampshire, and the most expensive, Hawaii, is almost $13,000.

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The two biggest factors tend to be taxes and fees and the cost of insurance. In Oregon, for example, car buyers pay an average of just $129 in fees, but in Arizona, they’ll pay an average $4,346. Insurance is cheapest in South Dakota ($4,723) and most expensive in Alaska ($11,481). In West Virginia and Louisiana, insurance will run about $11,000 over five years, but you’ll pay half that if you live in Georgia or North Dakota.

Maintenance and repair costs can also affect how much your car will cost over time. Labor rates for service technicians in your state might vary, for instance. And if your state has no sales tax, replacement parts will cost less. Maintenance and repairs will cost an average of $1,350 more in Maryland than in nearby New Jersey, for example.

You’re not likely to drive to New Jersey to get your car serviced, so if you’re in one of those high-cost-to-own states, you can at least compare the total cost of ownership for different vehicles on your shopping list. Remember that buying a more expensive vehicle means you’ll probably pay higher sales tax and more interest on your car loan, which could end up costing you more than you bargained for.

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© 2012 Forbes.com

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