doxoINSIGHTS has released two new reports about the cost of car ownership in the U.S. that reveal that Americans spend $743 billion annually on auto loans and auto insurance combined. They also use statistical analysis of actual household payments toward auto loans and auto insurance to size the markets for both industries.
The Auto Loans Report and the Auto Insurance Report found that households with these bills spend $629 per month on those payments, an increase of 5% year over year. This amounts to $7,548 per year, or $5,722 when averaging across all U.S. households. The report also breaks out the size of these markets, both nationally and in specific cities. The reports also convey the percentage of households that pay each bill. They also contain rankings for average bill costs across all states, 50 biggest U.S. cities and hundreds of additional cities across the country.
A number of factors have combined to drive up costs across both categories. Interest rates on auto loans are at a near-peak high over the last eight years, with supply chain issues and limited inventory pushing both new and used car prices up. Simultaneously, inflation is impacting not only auto purchasers but insurers who are passing the more expensive cost of vehicle repair and replacement on to consumers. The 5% year-over-year increase in loan and insurance costs that doxo sees only represents the fixed cost of ownership, and doesn’t include the substantial increases that have occurred over the past year with regard to the variable cost of fuel.
“The last few years created a bit of a perfect storm to increase the cost of car ownership across the category,” said Jim Kreyenhagen, vice president of marketing and consumer services for doxo. “Driving went back to pre-pandemic rates, and so did the accidents and insurance rates associated with it, just as the cost of buying a car and buying gas were both on the rise. doxoINSIGHTS gives consumers transparency into the average costs in both auto loans and insurance so they can make informed decisions about their own finances, whether that’s negotiating a better rate with their insurance company or rightsizing their auto loan with their budget.”
To read more, check out the Auto Loans Report and the Auto Insurance Report.