(WJAR) — The cost of buying a new car has climbed significantly.
The average new car now costs more than $50,000, according to Kelley Blue Book.
That’s a more than 30% increase since the start of the pandemic.
But the costs don’t stop once you own the car.
A new report from Bankrate finds those “hidden” car ownership costs are climbing too.
File photo of cars on the road. (WJAR)
Between insurance, taxes, maintenance and gas, the average driver is now shelling out almost $7,000 a year, according to Bankrate – and that doesn’t include car payments!
“The hidden cost of car ownership is around $575 per month, and if you look at how much drivers are paying for a new car loan – that’s around $700 a month,” said Bankrate insurance expert Shannon Martin. “So people are looking at around $1,200 per month, just to own a vehicle.”
What’s driving car ownership costs so high?
“Car insurance is the biggest driver in terms of how expensive cars are,” said Martin. “I mean just between August of 2024 and 2025, car insurance rates have increased by about 15% – that adds over $300 a year to people’s budget that they’re allotting for car insurance.”
Martin said there are a few ways to save money on hidden car ownership costs, depending on your situation.
“If you’re someone who can cut back on where you’re driving or maybe do carpooling, or walking – if you live in a walkable city, you actually might be able to ease back on some of your gas expenses and some of your maintenance repair expenses,” said Martin.
She continued, “You also want to take a look at your car insurance.”
A new report from Bankrate finds those “hidden” car ownership costs are climbing too.
Martin said if you haven’t shopped for a new policy in the past few years, shop around and compare prices – especially if you’ve improved your credit.
And while it might increase the cost of your premium, don’t ignore gap coverage.
Martin said if you’ve recently purchased a new vehicle with a longer loan term – either 72 or 84 months – and you didn’t put a lot of money down, gap insurance coverage might be worth the extra cost.
She said gap insurance will protect you from being underwater on your car if you’re in an accident.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.