It has never been so much fun to be a “car enthusiast”.
In June, rising auto prices and auto loan interest rates pushed the average monthly car payment to a record high of $712, according to Cox Automotive/Moody’s Analytics. analysis. The median number of weeks of income needed to buy the average new vehicle also rose for the fourth consecutive month, reaching 41.3 weeks in May, the highest mark since at least 2012.
The cause of the currently high car prices dates back to the early days of the pandemic, when a sharp drop in demand led manufacturers to cut orders for computer chips that are crucial for car production. As demand returned – helped by stimulus and people moving out of cities – manufacturers were running out of chips, and that problem has Again be fully resolved.
New car prices are on the rise 12.6% compared to a year ago, and used vehicles – which have seen an increase in demand in response to the shortage of new cars – have not provided the savings that consumers might have hoped for. Prices are up 16.1%.
increases interest rates to fight inflation, it also increases borrowing costs for Americans buying cars.
The increase in payments for cars does not even take into account gasoline prices, which, while potentially decreasing some in the coming weeks, remain well above what they were a year ago. So there is
$10,000 on maintenance, fuel, insurance, parking, toll fees and other miscellaneous expenses, a number that has likely increased in recent years due to inflation., parking and – heaven forbid – speeding tickets. According to a 2017 analysis by data and analytics firm INRIX, the average U.S. driver spent more than
The “average maintenance transaction cost” for an automobile Pink from $232 in 2019 to $259 in 2021, according to fleet management company Emkay, due to rising prices for parts, labor and customers keeping their vehicles longer as maintenance costs for older cars tend to be upper.
With drivers returning to the road en masse as COVID restrictions eased, the number of accidents is also in place. And when a vehicle needs to be repaired, the impact of inflation on auto parts has made that process more expensive. Consequently, many insurers have increased premiums to help foot the bill for driver claims. According to a 2022 Bankrate report, U.S. drivers who have full insurance spend on average over $1,700 annually.
It’s unclear if parking rates are up, but for those without a garage, the cost can add up. According to automotive fintech platform Way.com, monthly parking in New York costs about $550, or more than $6,000 per year. As regards speeding tickets, the introduction of “robot camera systems” has contributed to After issued, especially in cities like Chicago.
While advocates argue that electric vehicles make owning a car more affordable – due to lower fuel and maintenance expenses – EV adoption has been slow. In February, less than 1% of vehicles on American roads were electric.
Despite the costs, owning a car remains important to millions of Americans – a analysis reported that nearly 92% of U.S. households had access to a car in 2020, up from about 91% in 2015.
By a statistic investigation, 76% of Americans commute to work by car, compared to 11% who use public transportation and 10% who choose to bike. This is higher than in many European countries; in Germany and the Netherlands, for example, only 65% and 56% of commuters drive to work, respectively.
In addition to Americans generally having more time home-work journeys that Europeans – sometimes making a bicycle for example impractical – some experts attribute the lack of investment in public transport and cycling infrastructure to the main reasons for the division of car use. By a recent study, the United States had only three of the 50 most “cyclable” cities in the world: San Francisco, 39th; Portland, 41st; Seattle, 50th.
If employers and workers continue to embrace remote working even as the pandemic subsides – an expert has estimated 25% to 35% workers were moved away in April – the need for cars could also decrease, allowing more people to choose a “car-free” life.
Until then, however, or until supply chains improve to help bring prices down, Americans should continue to pay big for their vehicles. Even the beloved “new car smell” might not be enough to lift their mood.