This article is reprinted by permission from NerdWallet. The average cost of total car ownership in the U.S. rose 16% from 2019 to 2022, according to the U.S. Bureau of Transportation Statistics. A new study from NerdWallet conducted by The Harris Poll finds that this cost is wearing on American vehicle owners.
The study — conducted among 2,060 U.S. adults from Jan. 31 to Feb. 2, 2023 — finds that 25% of Americans who own a personal vehicle worry that the price of fueling or charging their vehicle will impact their ability to pay for other necessary goods or services. Read: Are we witnessing the demise of the affordable car? Automobile makers have all but abandoned the budget market.Cost of vehicle ownership Although vehicle costs are weighing on some owners, about a third (36%) of Americans are planning to purchase a new vehicle in the next 12 months, according to the study. Loans for those vehicles have an average annual percentage rate — or APR, the interest charged for an auto loan — of 6.07%. That can help drive up the overall cost of vehicle ownership. NerdWallet finds that while 43% of vehicle owners say $1,000 in monthly vehicle costs is too high for them to stomach, a minority — 10% of owners — crack that ceiling. Generation Z and millennial owners are more likely than others to end up with monthly bills over $1,000 (20% and 18%, respectively, compared with 6% of Generation X owners and 3% of baby boomers). Younger generations have generally higher monthly vehicle bills overall, according to the study. Gen Z and millennial vehicle owners spend an average of $921 and $821 per month, respectively, on their vehicles. Gen Xers spend $433 monthly, and baby boomers spend $308. As a result, 35% of Gen Z vehicle owners say their vehicle expenses make up a significant portion of their monthly budgets. Parents also pay more for their vehicles, the study found. Vehicle owners with children in their households spend an average of $792 per month on their vehicles, while those without kids spend an …