Recent data published has exposed the spiraling costs that come with car ownership that are plaguing drivers of all ages across the US.
The study undertaken by AAA states that the majority of drivers underestimate the cost of keeping and running a vehicle, with many drivers believing that cars are much cheaper to run than they actually are. According to AAA, the average cost of running a car in the US is around $8500, and that’s without the cost of the vehicle itself.
The highest costs that drivers face annually include car insurance – often the highest cost of all, gas, and auto repairs. The problem is that each year, the costs of these things, and other auto associated costs, increase, meaning that car ownership becomes even more expensive.
This is especially true when part of the annual cost is purchasing a new vehicle. Data from Experian shows that the average US household cannot afford the cost of buying a new vehicle, meaning that they either have to go without and use public transport or invest in a car that is second hand.
So it’s clear that the cost of owning a vehicle is rising, but what does that mean for drivers?
Owning a car isn’t always affordable
One of the most significant findings of the AAA study found that for many US citizens, owning just one car per household isn’t affordable. This is not only because of the high costs of buying a new vehicle but also because of the running costs that come with any vehicle.
Gas prices have begun to rise, which means that getting from A to B is becoming more and more expensive. Over the past few months, gas prices have risen, and they are expected to continue rising, which means that driving is out of reach for many people. The average price of gas in the US is $2.31 per gallon – according to GasBuddy, most states are selling gas for $2 per gallon or higher. That means to fill the average car tank with 14 gallons of gas, it costs around at least $28, often more than that. Whereas a couple of years ago, it would have cost just under half of this amount to fill a tank with gas.
The costs of repairs can often be incredibly high, which can lead to a driver taking their vehicle off of the road. The fact is that a lot of families in the US live paycheck to paycheck, which means that when their car is in need of repair, the cost can be far too high for them to afford. The average repair bill in the US ranges from $500 to $700, which isn’t exactly cheap. One of the most common reasons that cars are kept off of the road is because an unavoidable repair is too expensive to have completed, despite the fact that the vehicle is needed for the owner and their family to get around.
Then there are insurance costs to take into account. On top of the cost of gas and having any repairs made to the vehicle, then there are expensive insurance costs to cover. Instead of paying their premium off in one payment, a lot of drivers have no choice but to pay it off in installments, which makes the overall total much higher. However, for a lot of drivers, paying their premium off in full is unaffordable. A recent study has shown that over the past few months, insurance rates have increased on average by 20%, which is a fairly large increase. This means that if a policy were to cost a driver $550 last year, when it is renewed this year, it will cost around $660. Presuming that they have had no crashes or their circumstances have changed in any way, of course.
The other costs that come with owning a car include maintenance, like having the oil changed, refilling the water, and simple things like that, as well as valeting, if the driver chooses to have their car valeted, and the cost of breakdown cover. These are all things that increase the cost of owning and running a vehicle.
Can car ownership be made more affordable?
So we’ve looked at why the costs of car ownership are spiralling out of control, but is there a way to make buying and running a car more affordable? According to AAA, there are ways that drivers can make car ownership more affordable, which is good news for drivers who are on a budget.
AAA suggests that to keep the cost of running a car more affordable, drivers should budget a set amount of money each month. This can be used to cover fuel costs, repairs, or anything else that crops up. Any money that isn’t used at the end of the month should be put in a savings account for a rainy day, such as when the vehicle breaks down unexpectedly, and the cost of repairing it is high.
AAA also suggests that drivers ensure that their vehicles are well maintained and undergo services at least once a year. This is considered necessary as cars that are well taken care of not only tend to last for longer, but also tend to have fewer problems. So it is recommended that drivers take good care of their cars by keeping on top of maintenance, which will then save them money in the long-run.
When it comes to making it more affordable to keep and run a car, one option that a lot of drivers suggest is using garages that allow payment in installments, either for a new car or repairs. If this isn’t an option, some drivers choose to use sites like Personal Money Store to borrow enough money to cover their car costs and then pay it off in monthly installments. For drivers who can’t afford to make a big payment in one, the best option is paying for your new car or repairs in more smaller and more affordable monthly payments.
Of all the costs that come with running a car, higher insurance costs is one of the real issues for drivers. This is because insurance is non-negotiable, to be able to drive the vehicle it must be insured, which means paying insurance costs, now matter how high they may be. Or, does it? A lot of insurance companies are now offering drivers the chance to prove how safe they are on the roads by having a monitor fitted to their vehicles. This monitor allows insurance companies to track how safely a driver drives, meaning that if the driver is careful when on the road, they can reduce the cost of their car insurance, saving themselves money. For experienced drivers whose insurance premiums are high, having their driving monitored with a box or using an app, can allow them to reduce the annual premium that they are paying each year, making insurance more affordable.
With more and more drivers struggling to keep on top of the costs of running a car, it’s clear that the costs associated with having a vehicle have begun to spiral out of control. Gas prices are rising; insurance premiums are going up, the cost of maintenance is increasing – there’s no doubt about it, cars are much more expensive to run today than ever before. The cost of buying a vehicle has also increased, making car ownership even more expensive for drivers, which has meant that many drivers have had to give up driving and use public transport instead of their own vehicles. There’s no doubt about it, the rising costs of car ownership are spiraling out of control.