Monthly Car Payments Continue to Sky Rocket
No matter how you slice it, the cost of owning a car is getting more expensive. What can you do to keep costs down?
Written by Andrew Koole
Reviewed by Kathleen Flear
Everything is getting more expensive right now, but
car ownership
is rising faster than most. Gas is at an all-time high, starting prices are astronomical, and for the many Americans that make monthly payments
toward their vehicles, costs are breaking records as well.This isn’t a new thing. Sticker prices for cars started increasing at alarming rates in 2021. But it seems that drivers can’t get any relief. The average monthly car payment in the U.S. broke a new record in June, reaching a shocking $712.
Why are monthly car payments rising?
It’s easy to blame inflation for the rising costs related to car ownership, but in truth, it’s a little more complicated. It’s a bit of a “chicken or the egg” scenario, but
Business Insider
says rising prices for cars are actually one of the sources of the increasing inflation rate.That’s because the supply chain issues brought on by the pandemic and Russia’s invasion of Ukraine hit the auto industry especially hard.
Materials and microchips are harder to get, parts are harder to make, and the result slows down production and forces automakers to triage components to higher trims and more expensive models. Fewer vehicles are available, and they cost more as a result (supply and demand, baby).
High prices are impacting car payments, but so are the attempts to control inflation like rising interest rates. Even as sticker prices mellow, those interest rates are keeping monthly payments on their upward momentum.
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What can you do about it?
The amount of control you have over increasing car loan payments depends a lot on your situation. If you can keep driving the car you’ve got for a little longer, it might be the right move until things settle down.
Kelley Blue Book
says prices at the dealership have already started to ease up since they hit a record average of in December. But it hasn’t been a steady decline—the average price in May was over $47,100—and the effects of increased interest rates will make recovery take longer.If you’re actually desperate for a new car, seriously take your budget into account. Make the largest down payment you can afford, only buy a car you need, and choose a model that will help you save on other costs like gas and insurance.
MORE: A Guide to Car Loans for College Students
Saving on car insurance
You might not be able to avoid making monthly car payments, but saving on car ownership doesn’t end at the dealership. There are plenty of other ways to make the expense cheaper.
One of the easiest ways is to shop with Jerry for car insurance. A licensed broker that offers end-to-end support, the Jerry app gathers affordable quotes, helps you switch plans, and can even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price.
This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the top insurance app in the country.
MORE: What You Need to Do After Buying a New Car
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