Car ownership is taking a bigger bite out of budgets
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
Average monthly car payments in Ohio are now $716 for new cars and $504 for used cars, according to new data from car research site Edmunds.
Why it matters: Cleveland hopes to increase active transportation like biking and walking over the next few years, but the overwhelming majority of Northeast Ohio residents still rely on cars.
- Add in rising gas prices and the cost of car ownership is putting a huge dent in budgets.
The big picture: Vehicle sticker prices have been climbing for years with many popular models now thousands of dollars more than they were a few years ago, Axios' Joann Muller reports.
- The average cost of a new vehicle nationwide hit a record high of $43,899 in the first quarter of the year, up by more than $2,000 since the same time last year, per Edmunds.
- As a result, car buyers are stretching their loan terms longer, to an average of nearly six years.
Stunning stat: Even with those longer terms, 20% of new car buyers now pay $1,000 a month or more, per Edmunds.
The situation isn't much better for used cars.
- Inventory on used car lots fell to 40 days' supply in March, its lowest point this year, and though it rebounded slightly in April, it remains tight.
- That's pushing those prices up. The average price for a used vehicle in Q1 was $29,314, per Edmunds.
If you add up gas prices, insurance, repairs and the sticker prices of cars, the cost of owning one is up 47% since 2020, according to Navy Federal Credit Union.
- That's risen faster than both inflation and wages.
Threat level: Rising car costs are causing more Americans to fall behind on their car payments or stay out of the market.
- The average age of vehicles on the road hit a record high of 13 years last year.
Yes, but: There's a silver lining for used-car owners. They're retaining more of their value for longer, according to CarFax.com.
- So, if you can swing the payment for a new car, you'll likely be able to sell your old beater for more than you would have a few years ago.