Average American Now Spends Nearly $800 A Month On Their Car

The pleasure of owning a brand new vehicle, regardless of its make and model, can’t be compared to anything. We know all you enthusiasts out there know exactly what we are talking about. Unfortunately, with every year this pleasure is getting more and more expensive, despite the fact that more and more people can afford it. According to the AAA research agency, the average new car price is close to $40,000 these days.

But more importantly, the agency’s latest research shows the average American owner is spending approximately $9,282 per year on their vehicle, which equals to $773.50 a month. That’s significantly higher than last year’s $8,849, which only comes to show new car expenses are going up year after year.

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Of course, a number of factors contribute to the rising prices of ownership. Mostly this is due to the fact that more and more customers are abandoning smaller and more affordable cars for big trucks and SUVs, which are generally more expensive to maintain and insure. That’s why costs vary widely depending on the vehicle segment with pickups the most expensive to own with annual cost of $10,839. At the other side of the spectrum, small sedans are significantly cheaper to own at $7,114 per year.

The financial costs are also up compared to last year. With rising interest rates and longer loan and lease periods, the average finance charges are $920 a month, up from $744 in 2018. The biggest factor, however, remains depreciation, which accounts for about 36 percent of the average ownership annual cost. On average, depreciation works out to $3,334 per year.

“Finance costs accounted for more than 40 percent of the total increase in average vehicle ownership costs,” John Nielsen, AAA’s managing director for Automotive Engineering & Repair, comments. “AAA found finance charges rose more sharply in the last 12 months than any major expense associated with owning a vehicle.”

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