Cost of Car Ownership in the U.S. Increases 7% as the Average American Household Now Spends Nearly $700 a Month on Auto Loans and Insurance Combined

Americans spend a total of $811 billion a year on auto loans and insurance combined; report breaks down the most expensive states and cities to own a car in the U.S.

SEATTLE--(BUSINESS WIRE)--
Two new reports from doxo reveal that the cost of car ownership has increased 7% year over year to $6,184 per year. The reports also reveal that Americans as a whole spend $811 billion annually on Auto Loans and Auto Insurance combined. A statistical analysis of actual household payments toward Auto Loans and Auto Insurance was used to size the market and amount spent per household across 97% of U.S. zip codes. The 2023 U.S. Auto Loan Market Size and Household Spending Report and the 2023 U.S. Auto Insurance Market Size and Household Spending Report found that U.S. Households with Auto Loan and Auto Insurance bills spend $674 per month, or $8,088 per year – or $6,184 when averaging across all U.S. households.*

The reports break out the household spending market size; percentage of households that pay each bill; and average monthly and annual bill pay costs by state, as well as the 50 largest U.S. cities (based on the number of households), and those cities with 40k or more residents. Key findings include:

Cost of Car Ownership in the U.S.

• Americans spend a total of $811 billion dollars a year on Auto Loans and Auto Insurance

• The average annual cost per household is $6,184 a year for both Auto Loans and Auto Insurance*
  

Auto Loans Market Size and Household Spending Snapshot

• Total Market Size: $544 billion spent per year

• Average Monthly/Annual Cost: $467 spent per month; $5,604 spent per year
• Percent of Households: 74% of U.S. households pay Auto Loans

• Average Annual Cost per U.S. Household: $4,147 per year*

• Percent of Annual Income: Auto Loan bills amount to 9% of consumers’ income per year

Auto Insurance Market Size and Household Spending Snapshot

• Total Market Size: $267 billion spent per year

• Average Monthly/Annual Cost: $207 spent per month; $2,484 spent per year

• Percent of Households: 82% of U.S. households pay Auto Insurance

• Average Annual Cost per U.S. Household: $2,037 per year*

• Percent of Annual Income: Auto Insurance bills amount to 4% of consumers’ income per year

The rising cost of car ownership continues the trend of recent years. Auto loan debt currently stands at $1.5 trillion, a record high on the upward trajectory starting in 2011. Supply chain issues brought on by the Covid-19 pandemic, interest rate hikes and inflation have all combined to make car ownership more expensive than ever. The high cost of car repairs combined with record underwriting costs for some insurance companies means the cost of insurance premiums has simultaneously skyrocketed.

“While supply in the market is finally starting to catch up to the demand of the past few years, drivers are far from getting a reprieve from the numerous factors that have made it so expensive to own a car,” said Liz Powell, Senior Director of INSIGHTS at doxo. “Armed with information on both the rising costs in auto loans and insurance, consumers can make an informed choice if they’re considering whether now is the right time to trade-in their car or buy a new one or negotiate rates with their insurance company.”

Top 5 Most Expensive States to Own a Car

Top 5 Most Expensive Big U.S. Cities to Own a Car

For more information, or to view both reports, visit www.doxo.com/insights/.

*Average Monthly Bill x % of Households with Bill x 12 months per year = Average Annual Cost per U.S. Household.

About doxoINSIGHTS

doxoINSIGHTS provides direct insight into household financial health and spending activity by leveraging consumer surveys and doxo’s unique aggregate bill pay data set, comprising actual bill payment activity to confirmed household service providers across the country. doxo data brings together the broadest available data set for analyzing actual household bill payment activity, pulling from over 8 million paying consumers across over 97% of U.S. zip codes. doxo’s payment network covers over 120,000 billers in 45 different service categories and enables payments using bank accounts, credit cards or debit cards. This uniquely broad statistical foundation powers doxoINSIGHTS reports – uncovering key trends for household financial health and bill payment behavior.

About doxo

doxo delivers innovation that transforms the bill pay experience for consumers, billers and financial technology providers. For over 8M consumers, doxo’s all-in-one bill pay makes it simple to organize and pay any bill on any device through a secure checkout. For billers, doxo’s network-driven platform enables online and mobile payments with a ridiculously simple integration, radically lower costs, and game-changing features that are unavailable with legacy bill pay vendors. For fintech partners, doxo delivers financial innovations to consumers across 97% of US Zip Codes, paying from more than 5,000 financial institutions to over 120,000 billers in 45+ service categories. For employees, doxo is a creative, ever-learning team that is passionate about building fintech tools that dramatically improve the bill pay experience. For investors, doxo provides an extraordinary opportunity to invest alongside Jackson Square Ventures, MDV, and Bezos Expeditions to disrupt a market that accounts for over $4T of US Household spend. To learn more about America’s leading bill pay network, visit doxo.com.

src="https://cts.businesswire.com/ct/CT?id=bwnewssty=20231009829054r1sid=acqr8distro=nxlang=en" style="width:0;height:0" />

View source version on businesswire.com: https://www.businesswire.com/news/home/20231009829054/en/

Dotted Line Communications for doxo
Jenny Davis
press@doxo.com

Source: doxo