Each year, the cost of car ownership inches up higher and higher. In fact, Doxo reports that it has increased by 5% year over year, reaching $5,722. Not only that, but Americans spend a total of $743 billion yearly on car loans and insurance.
To be specific, the average American household spends $629 per month or $7,548 per year on car-related expenses. For comparison, in 2020, the average monthly car payment in the US amounted to $568 (for a new car).
Auto loans have been at a near-peak rate for eight years due to limited inventory and supply chain issues, which have driven up both new and used car prices. At the same time, inflation is pushing car prices and forcing insurance companies to charge customers more for repairs and replacements.
However, this 5% increase in loan and insurance costs is only the fixed element of ownership expenses. I.e., this figure doesn’t reflect the recent increases in gas prices.
According to the report, the most expensive states for auto loans are:
- Wyoming ($511 per month or $5,212 per year)
- Alaska ($501 per month or $5,291 per year)
- Nevada ($481 per month or $3,867 per year)
At the same time, the cities with the most expensive car loans are:
- San Jose ($584 per month or $5,326 per year)
- Kansas City ($547 per month or $3,216 per year)
- New York ($546 per month or $4,390 per year).