Cars are still horrendously expensive—and it’s making people think twice about searching for a new one. According to recent reports, Americans are keeping their vehicles closer than we ever have.
Decreasing debt and keeping payments as low as possible are huge for car owners right now—and many are doing so by just keeping the ones they have. If not for high costs, more citizens would be car shopping, but with steep costs not letting up, it’s out of the question for an alarming amount of people. The average age for a passenger vehicle owned by one person just hit 12.5, and some are keeping them for even longer.
The pandemic is the main source of our sorrow in this case. COVID created worldwide shortages of goods from food items to automotive computer chips. The shortage put assembly lines to a nearly screeching halt, making newer vehicles harder to find just as buyers were gearing up to browse the market. Because of the lack of vehicles, prices are still reaching record highs, even though they’ve eased ever-so-slightly. Still, buying a new vehicle right now may cost you an arm, a leg, an ear, and maybe a kidney.
Since the beginning of COVID, the average new vehicle cost has skyrocketed to 24% (nearly $48,000.) Loan rates have also climbed to around 7%, which really hurts first time buyers, especially if they don’t have credit. The average monthly auto loan payment is a whopping $729—sounds just a bit high, doesn’t it?
According to experts, a family earning the median US household income can’t afford a new car payment and still comfortably buy basic necessities like food. Many of us are feeling the weight of high costs and empty wallets right now, putting America in a bind that we’re hoping breaks sooner rather than later. Even used vehicle prices are surging- up to 40% compared to what they were before the pandemic. The typical monthly used auto payment now rests at an uncomfortable $563.
Now that vehicle owners are faced with paying ridiculous costs or keeping what they have, they’re choosing the latter. Adapt and survive, right?