How the Costs of Car Ownership Add Up


Car Ownership

As a result of the widespread disruptions caused by the pandemic, the costs of Car Ownership maintaining an automobile skyrocketed, placing a strain on the budgets of many car owners they had not anticipated.Millions of people in the United States rely on vehicles for everyday tasks including getting to and from work, transporting kids, and grocery shopping. They’ve also never been so costly to own in modern history.

The Rising Costs of Car Ownership

AAA reports that due to rising purchase prices, maintenance costs, and finance charges, the average yearly cost of owning a new car grew to $12,182 this year from $10,728 last year. That’s equivalent to 16% of the pretax income of the typical family. (Depreciation is factored into the total.)

The Nationwide Impact

How does it add up as a whole? Roughly 92% of homes have access to at least one car, while 22% have access to at least three. That’s annually spending trillions of dollars and 223 million private automobiles. The combined capital and operating costs for public transportation totaled only $79 billion in 2019.

Personal Struggles with Car Expenses

Americans’ love affair with their cars comes with personal costs, risks, and tensions. And now, high sticker prices and rising interest rates are starting to take their toll, notwithstanding good salary growth and increased savings in previous years: In late 2022 and early 2023, a sizable fraction of debtors entered delinquent. The cost of a person’s own car has risen to become the fourth highest after rent, childcare, and groceries.

Real-life Stories

We asked five automobile owners to detail their car-related costs so we could get a sense of how they were faring. In many cases, they can be significantly higher than expected. Most people just have nowhere else to turn.

Brent McCulley’s Dilemma

Pompano Beach, Florida, real estate agent Brent McCulley, 33, spends the most on transportation for his family of four since they need two cars.

Troy Massey’s Financial Struggles

Jacksonville, Florida, Amazon driver Troy Massey, age 29, desperately needs a car to travel even short distances but keeps falling further and further behind on his payments.

Jennifer Owings’ Expensive Commute

Jennifer Owings, a school administrator in New York City, spends over $1,000 a month on her two- to three-hour commute.

Cyndy Knighton’s String of Car Accidents

Transportation engineer Cyndy Knighton, 58, has been in several accidents over the past year and a half. She works for the City of Tukwila, Washington.

The Broader Implications

That’s a regular occurrence because, as reported by TransUnion, the average loan amount for a used automobile is now above 123% of the car’s worth. While the rate of vehicle loan default is very low overall, it has been steadily growing since interest rates began to rise in 2022.

Seeking Solutions

He started working for one of Amazon’s delivery contractors full-time in August, earning $18.75 per hour (about $3,000 per month before taxes). His $700 monthly rent leaves him with little money for groceries and his outstanding credit card debt.

Mr. Massey is working on his software development portfolio in preparation for applying for higher-paying employment that will allow him to buy a car.


The rising expense of owning a car is putting a strain on the budgets of Americans of all walks of life. Considering the wider ramifications of this financial strain, it is essential to investigate various transportation alternatives as costs continue to climb.


Are there any government programs to help with car ownership costs?

While there are no specific programs dedicated to car ownership costs, some states offer financial assistance for low-income individuals to purchase fuel-efficient vehicles.

What can individuals do to reduce their car ownership expenses?

To lower costs, individuals can explore carpooling, using public transportation, or even switching to more fuel-efficient vehicles. Additionally, refinancing loans at lower interest rates can help.

How can car insurance costs be minimized?

Comparing quotes from multiple insurance providers and opting for higher deductibles can help reduce insurance premiums. Additionally, maintaining a clean driving record can lead to lower rates over time.

What are some long-term solutions to the rising costs of car ownership?

Investing in electric or hybrid vehicles can save money on fuel in the long run. Additionally, supporting initiatives for better public transportation can reduce the need for personal vehicles.

Is car ownership becoming a luxury for the wealthy?

With rising costs, car ownership is becoming more challenging for lower-income individuals. It’s essential to advocate for policies that address this issue and provide affordable transportation alternatives.

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