Cost of car ownership up to $629 per month for average household
Ready for more of the same news about where prices are going? Cox Automotive recently reported that the average transaction price of a new car crested $48,000 in July. It would follow, then, that credit monitoring agency Experian reported the average new car loan hit a record $40,000 in Q2 of this year, the average monthly payment hitting $667 per month. You didn’t think insurance costs were going to be left behind, especially not with car crashes hitting 20-year highs, eh? Bill pay service Doxo surveyed monthly auto loan and auto insurance payments across 97% of U.S. zip codes to assess the fixed cost of car ownership. It found that the average household with car and insurance bills spends $433 on a car loan — this includes new and used vehicles — and another $196 on auto insurance, for a total outlay of $629 per month.
That works out to $7,548 per year for homes with both bills, 5% above the fixed cost of ownership in 2021. And that’s before factoring in prices of fuel and other commodities, regular maintenance and repairs.
The stats broke down costs by state and city as well. It could be a surprise that Doxo found the five most expensive states to own a car are bracketed by Wyoming, with an average spend of $818 per month, and Hawaii, with an average spend of $687 per month. The list of the five most expensive cities fits with what one would expect, New York City at the top with a $994 monthly spend, Atlanta, Georgia at number five with an average $724 monthly spend.
Doxo’s VP of marketing and consumer services, Jim Kreyenhagen, said, “The last few years created a bit of a perfect storm to increase the cost of car ownership across the category. Driving went back to pre-pandemic rates, and so did the accidents and insurance rates associated with it, just as the cost of buying a car and buying gas were both on the rise.” Recent moves by the U.S. Federal Reserve raising interest rates will continue the upward pressure on pricing, making now the perfect time to hold off on buying a car for a lot of folks out there.
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