The rising cost of car ownership continues the trend of recent years.
The cost of car ownership has increased 7% over the past year to $6,184 per year, as Americans spend $811 billion annually on auto loans and insurance combined, according to two new reports from doxo.
A statistical analysis of actual household payments toward auto loans and auto insurance was used to size the market and amount spent per household across 97% of U.S. ZIP codes. The 2023 U.S. Auto Loan Market Size and Household Spending Report and the 2023 U.S. Auto Insurance Market Size and Household Spending Report found U.S. households with auto loan and auto insurance bills spend $674 per month, or $8,088 per year---or $6,184 when averaging across all U.S. households.
The reports break out the household spending market size; percentage of households that pay each bill; and average monthly and annual bill pay costs by state, as well as the 50 largest U.S. cities (based on the number of households), and those cities with 40,000 or more residents.
Cost of Car Ownership in the U.S.
- Americans spend a total of $811 billion dollars a year on auto loans and insurance
- The average annual cost per household is $6,184 a year for both loans and insurance
Auto Loans Market Size and Household Spending Snapshot
- Total Market Size: $544 billion spent per year
- Average Monthly/Annual Cost: $467 spent per month; $5,604 spent per year
- Percent of Households: 74% of U.S. households pay loans
- Average Annual Cost per U.S. Household: $4,147 per year
- Percent of Annual Income: Auto loan bills amount to 9% of consumers’ income per year
Auto Insurance Market Size and Household Spending Snapshot
- Total Market Size: $267 billion spent per year
- Average Monthly/Annual Cost: $207 spent per month; $2,484 spent per year
- Percent of Households: 82% of U.S. households pay auto insurance
- Average Annual Cost per U.S. Household: $2,037 per year
- Percent of Annual Income: Auto Insurance bills amount to 4% of consumers’ income per year
The rising cost of car ownership continues the trend of recent years. Auto loan debt currently stands at $1.5 trillion, a record high on the upward trajectory starting in 2011. Supply chain issues brought on by the pandemic, interest rate hikes and inflation have all combined to make car ownership more expensive than ever. The high cost of car repairs combined with record underwriting costs for some insurance companies means the cost of insurance premiums has simultaneously skyrocketed.
“While supply in the market is finally starting to catch up to the demand of the past few years, drivers are far from getting a reprieve from the numerous factors that have made it so expensive to own a car,” said Liz Powell, senior director of INSIGHTS at doxo. “Armed with information on both the rising costs in auto loans and insurance, consumers can make an informed choice if they’re considering whether now is the right time to trade in their car or buy a new one or negotiate rates with their insurance company.”