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New Car Ownership Costs On The Rise, According To AAA Study

The cost of new car ownership in the United States is rising rapidly, according to a recent study conducted by the Automobile Association of America (AAA).

According to the study, the average annual cost of new vehicle ownership is around $9,666, equivalent to $805.50 per month. AAA says the biggest contributing factor behind rising annual car ownership costs is depreciation, which accounts for 40 percent of all ownership expenses. Depreciation can be tricky for consumers to navigate, as it is a hidden cost of car ownership that isn’t fully realized until the owner turns around to sell the vehicle. It can also be hard to predict which cars will depreciate and which will hold onto the majority of their original MSRP.

According to AAA, the average price of a new vehicle in 2021 is around $32,903, which is $1,502 (or 4.78 percent) higher than in 2020. Not surprisingly, pickup trucks saw the largest year-over-year increase at an average of $4,684 (11 percent). Despite the gains, pickup trucks remain the most popular vehicles in America by a wide margin. AAA says models in the small sedan, medium sedan, medium SUV and hybrid categories “averaged an increase in vehicle price of $3,064,” spurred on by new hybrid models, which are more expensive to purchase, but can also offer long-term fuel savings.

Car purchase and ownership costs have been a hot topic in 2021, with the semiconductor chip shortage reducing new vehicle inventory and driving up demand for used cars. The chip shortage is expected to last into early next year, so it seems the trend of rising new and used vehicle prices is here to stay for the foreseeable future. AAA says that by doing research into depreciation, fuel costs, maintenance costs and other related vehicle ownership expenses, customers can navigate rising vehicle costs and still find themselves a good deal.

“The expense of owning a car goes far beyond the monthly payment,” said AAA spokesperson Mark Jenkins. “Costs are increasing for a number of products, and cars are no exception. With strains on inventory this year, it is critical for consumers to do as much research as possible before beginning the buying process.”

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Comments

  1. Just wait until market conditions return to normal and all these people who have been paying MSRP decide to make a move and the people who bought overpriced used will be crying and those underwater will be stuck with it.

    I would not doubt if some if they can pull it off will do like during the housing crisis,get a different vehicle at deflated prices and leave the bank holding the bag with the old one.

    Reply
    1. budlar: You hit the nail on the head 100%.

      Reply
  2. Don’t worry, be happy. The fed keeps telling us all the price increases are transitory. Sure.

    Reply
  3. I get tired of hearing the news talk about “national average price per gallon” $2.46? Middle grade Chevron here in the So. Cal. today is $4.78, “no one making less the 400k will pay more”, yeah no!

    Reply
    1. Thanks Biden

      Reply
      1. I heard he said there is no need for anyone to thank him he knows how much the people appreciate his hard work and will not raise your taxes because you are not going to have any way of paying them anyway.

        Reply
    2. That is what happens when the people of California vote for a liberal Gov.

      Reply
  4. Are you not used to the 365 day a year fair weather sunshine tax? The price you pay for never having to get up a hour early to blow snow before work.

    Reply
  5. New Car Ownership Costs On The Rise. Uhhhh, ya think?

    Reply
  6. You ever wonder, what’s really behind this semiconductor shortage?????

    Reply
    1. Maybe Ciberdyne systems is buying up all the semiconductors they could get. So they could finally built their army of Terminators.

      Reply
    2. No everyone knows what’s up the idiots at gm and Ford miscalculated and now they are paying the price.

      Reply
  7. From this article, I will refer you to the article about the dealer with the modified GMC Denali with nearly $30,000 worth of add-ons. Think the moron who actually buys that truck won’t be sitting upside down big time in 2 or 3 years?

    Reply
    1. I would hope someone who buys something like that has a big pile of cash that they have nothing better to spend it on.

      Reply
  8. Who said anything about new CAR ownership? Pretty much all Mary’s got to offer is massive trucks and SUVs. Yeah, 6,000 pounds and $70K is totally reasonable for the daily unaccompanied commute to the office. Any wonder so many morons are “underwater”? Glad it ain’t me pumping 20+ gallons of nearly $5.00 gas into one of America’s beloved solid gold land yachts so proudly (and tellingly) pictured above.

    How best to describe Green(??) America’s auto buying “trends”? Masochistic hypocrisy. These are after all many of the same folks responsible for electing our current abomination… err, administration. Poor choices have consequences.

    Reply
  9. What will happen when the price of gasoline doubles—nationally—if you can find any, and electric vehicle charging drives all electric bills out of site like here in Ct. where the gov is working in a 17c/ gal gas tax increase. Back in the day they thought they were so clever to base gas tax as a %. They never dreamed gas cost would drop, only increase along with the tax$. Then as vehicle mileage was mandated to be improved, sales decreased. As elect cars are more prevalent sales of gas dips further as does the tax income. The next step is taxing sunshine which is probably in effect under a hidden solar power cost!

    Reply

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