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Monthly Average Car Payment Price Soars Past $1,000 Mark, Signaling Higher Ownership Costs

Photo: Driving Test Success

In today’s fast-paced world, owning a car has become more than just a convenience; it’s a necessity. However, as we steer into 2023, the annual cost of owning a new car is shifting into overdrive, exceeding an average car payment price of  $12,000.

Monthly Average Car Payment Price Soars Past $1,000 Mark, Signaling Higher Ownership Costs (Photo: Vincue)

How the Average Car Payment Price is Impacting You

A recent report published by Money.Com, in August 30, 2023,  AAA has unveiled that the average monthly cost of owning and operating a new vehicle has surged from $894 in 2022 to a staggering $1,015 in 2023. That’s a hefty increase of $1,454 over the course of a year. While new car prices seem to be stabilizing, the damage from the past year’s fluctuations is far from undone. The average car payment price transaction  for a new car now looms over $48,000, a noticeable jump from the $46,400 at the dawn of 2022. Let’s dive into the details of this financial shift and how it affects your wallet.

The gears of financial strain have been shifting rapidly in the automotive industry. As the calendar turned from 2022 to 2023, ownership costs experienced a turbocharged surge. Vehicle prices, car insurance premiums, and auto loan rates have all contributed to this uphill battle. Annual vehicle depreciation, a major component of car ownership, has skyrocketed by an average car payment price of $882, leaping from an average of $3,656 last year to a daunting $4,538 this year.

Finance charges, another critical factor in car expenses, nearly doubled, racing from $658 per year in 2022 to $1,253 in 2023, primarily due to the Federal Reserve’s rate hikes. These rate adjustments aimed at taming inflation have pushed auto loan interest rates to their highest levels since 2007. Simultaneously, the inflation dragon, though cooling down, has left its fiery mark on average car payment prices and insurance prices, with premiums surging by $177, rising from $1,588 in 2022 to $1,765 in 2023.

READ ALSO: Supplemental Security Income Beneficiaries To Get Second Check In September; Know More!

The Bottom Line: Buckle Up for the True Cost of Car Ownership

In a recent data released by The Verge, while gas prices have had their ups and downs in recent years, they remain a significant contributor to the overall cost of car ownership. Although gas is currently more affordable in 2023, at an average of $3.83 per gallon, it still closely mirrors the prices from the same time last year.

For example, consider full-size pickup trucks, which now demand over $15,000 annually to own and operate, equating to more than $1 per mile. These figures from AAA’s research serve as a stark reminder that when budgeting for a new vehicle, the total cost of car ownership extends far beyond just the monthly average car payment price.

It’s essential to take into account all the gears in the financial machinery of car ownership, from depreciation to insurance, as they all contribute to the true average car payment price.

READ ALSO: Online And In-Person Income Tax School Are Available

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