Almost all American households have access to a car
. But with monthly car payments, gas, and insurance at an all-time high, what’s a conscious consumer to do? Jerry
, the car ownership super app
, looks into how rising prices are affecting the average driver, and how you can save money despite inflation. Inflation: Car purchases and payments
Car payments hit a record-high of $712 in June 2022 due to rising auto prices and interest rates. In another record that hasn’t been broken since 2012, the medium number of weeks of income required to buy a new car increased for the fourth month in a row. It’s now at 41.3 weeks.
According to Business Insider
, “The cause of presently elevated car prices can be traced back to the early days of the pandemic when a steep decline in demand led manufacturers to cut orders for computer chips that are crucial for car production.” And as demand returned—due in part to consumers moving out of big cities and government stimulus checks—automakers were short on chips. And here we are.
Compared to a year ago, the price of new cars is up by 12.6% and used cars aren’t much cheaper, with an increase of 16.1%. “As the Federal Reserve raises interest rates to combat inflation, this elevates the borrowing costs for Americans buying cars as well,” Business Insider tells us.
Inflation: Gas, labor, and parts
Unfortunately, the increasing cost of monthly car payments doesn’t account for the cost of parking, gas, car insurance
, and any tickets you may acquire from parking on the wrong side of the street during street sweeping. Back in 2017, the average American driver spent over $10,000 for insurance, fuel, parking, toll fees, and maintenance. We don’t even want to know what that number looks like now.
Prices for labor and parts have risen as well, and so has the average transaction cost for vehicle maintenance. In 2019, drivers paid about $232 per transaction, and in 2021, $259. And if you’ve got an older vehicle that’s still kickin it, you can expect to pay much more.
As COVID restrictions ease across the country, more drivers are on the road, which means more accidents. Due to inflation, the cost to repair your vehicle is now an expensive process. And as a result, countless insurance carriers have increased premium costs to help cover the bill for drivers’ claims.
Most drivers spend over $1,700 annually with full coverage insurance, according to a 2022 Bankrate report.
It’s unknown if inflation has affected parking rates, but if you live somewhere like NYC, you could be paying about $550 per month just for parking! It’s safe to say that more speeding tickets have also been issued as of late, thanks to big cities like Chicago incorporating robo camera systems.
While Biden pledged to have at least half of all U.S. car sales be electric by 2030, we’ve still got a long way to go. In fact, less than 1% of autos on the road in February 2022 were electric.
Now that offices and workplaces are open again, 76% of Americans commute to work by car, while 10% commute by bike and 11% use public transit.
Inflation: What’s a car lover to do?
As the pandemic subsides, many employers have continued to allow their employees to work from home, or have incorporated a hybrid work system.
According to experts, 25 to 35% of employees were working remotely as of April. Not only does this save big bucks on gas, but you’re more likely to cook at home than spend your paycheck on daily work lunches just to get out of the office.
If you can, talk to your employer about remote options to ease the pain of inflation, or look for opportunities that let you live your best digital nomad life.
Another way to save big is to make sure you’re not overpaying for your car insurance policy every month. If you want cheap car insurance quotes fast, download the Jerry
app. A licensed broker that offers end-to-end support, the Jerry app gathers affordable quotes, helps you switch plans, and will even help you cancel your old policy. Users save an average of over $800 a year. 
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