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Knowing that all of us are wondering about tariffs, Cox Automotive tells us that car “prices are remarkably steady.” Expecting the tariff impact to hit during the summer, for now, automakers prefer to absorb cost increases.
During May, the average transaction price for a new vehicle was $48,799. Compared to May 2024, the average uptick was 1%:
But, for the most popular vehicles, our compact and mid-size SUVs, transaction prices were pretty steady. By contrast, the prices of sports cars, luxury cars, and luxury subcompact SUVs increased the most.
Car Spending
If you purchased a new car in 2024, this year’s spending could total a whopping $12,297. At $1,025 a month, your expenses would include $1,332 for finance charges and $1,715 on insurance ($2,680 according to WSJ). Then, per mile your fuel would be 14.90 cents and maintenance, 10.13 cents. As for government, there could be taxes and registration fees. And finally, though not an outlay, your loss in value–$4680 for each of the next 5 years– as depreciation is a consideration.
However, the WSJ auto guy complains the most about car dealers creating higher repair prices. The manufacturers, he says, unnecessarily bury the parts that need replacing. Making it all worse, at 411 pounds, the “acres of plastic” in our cars degrade too easily. Furthermore, when a fender bender crunches a “gadget” like our rearview camera or lane keeper sensors, the cost soars.
It all adds up to garage repairs costs climbing by 43% in six years.
Our Bottom Line: At the Margin
At $838 for an average repair, always, cars take us to the margin.
Economists like to say that we rarely decide to do all of something or nothing. Instead, we eat more or less., we spend more or less, we speed more or less. As a result, defined as the position of something extra, the margin is where decisions occur.
Called a budget buster, car repairs, new car purchases, and used cars that average close to $25,500, consistently bring many of us to our decision-making margin.
As a result, we tend to keep our cars for 14.5 years.
My sources and more: Thanks to WSJ for inspiring today’s post. From there, looking for more facts, the AAA was perfect. But also Cox Automotive had the Kelley Book prices and discussion. We should note that AAA also breaks down costs for the different kinds of vehicles, ranging from small and large pick-ups to hybrids.
