About 80% of Americans who buy new cars buy them on credit. I never bought a car on credit. Starting as a teenager, I always bought beaters— a used VW van, a used Mercury Comet, a used Ford Fairlane. In 1969 I bought my first new car— a special deal VW offered American students who would pick a VW camper up at the factory in Germany and promise to eventually export it… only $1,500, if I remember correctly… fully loaded. I sold some hash and had my first new car ever— which I live din for the next 2 years... and drove to India. Once I started working in the corporate world, I started buying cars for cash. I never liked credit; paying interest seems like a waste of money to me. But the cost of car ownership surged after COVID shut down assembly lines, made vital semiconductors scarce and saw interest rates go sky-high as the Fed tried fighting inflation. By the end of 2023 “the average sticker price for a new car was $48,759 in the US— or a near-record $770 a month to pay off over time… almost 30% higher than in January 2019… Used car prices are also elevated as inventory remains low. For more than a decade before the pandemic, with supply and demand in sync and with interest rates super-low, the average monthly payment bumped along at about $400… The average overall cost of owning and operating a new car in 2023— including fuel, maintenance and insurance— was $12,182, or $1,015 monthly, according to AAA. That’s up about 14% from $10,728, or $894, in 2022.”
I’m 76 now and I’ve been driving since I was 17. I feel like the right thing to do might be to stop. My license expired and I have to take a [written] test and I don’t want to read the booklet and get on the hours-log line at the DMV. Maybe it’s time to stop. But in L.A., it’s really had to get around without a car. Corrupt politicians here have made public transportation a bad joke. Still, Roland drives when we go anywhere anyway—and so do Spencer and Dan if I go to dinner with them. I can’t remember the last time when someone was in my passenger seat. Still, I have to drive to the grocery store a few times a week, the hospital at least once a month, the pharmacy, errands…
A few days ago I had a minor accident, a fender-bender. It was my fault. It didn’t cause any damage, except my right side mirror came off. When do people my age stop driving? When we really cause damage? Is there an age-appropriate moment? According AAA Foundation for Traffic Safety, on average, people tend to drive until their mid-80s. My doctor says I’m in far better shape cognitively and physically than the average 76 year old. My DMV eye-sight test was perfect.
Annie Lowrey wrote Sunday that “Even if you can afford to buy a car, keeping it maintained is more expensive than ever. Getting a car serviced has gotten pricier and pricier, as today’s highly computerized vehicles have such fussy, complicated parts to check and replace, and as labor shortages and wage pressure hit garages. Finally, there’s auto insurance: The monthly cost of protecting a vehicle has jumped 22 percent over the past year. Insurance costs are up 40 percent over the past two years. Why are insurance rates so high and climbing so fast? In part due to interest rates: Premiums rise when borrowing costs go up. In part because cars just cost so much right now: Pricey vehicles are pricey to replace in the event of a crash. In part thanks to climate change, which floods and burns people's garages along with their homes. In part because Americans are driving such enormous, heavy vehicles—four out of five new-car buyers pick an SUV or a truck— that do a lot of damage. Finally, in part because Americans are such awful drivers— episodes of road-raging behavior have increased since the pandemic began, and have become all the more deadly because the cars are so freaking big.”
Indeed, the number of traffic fatalities jumped 19 percent from 2019 to 2022, and the fatality rate per mile traveled climbed 22 percent— something Transportation Secretary Pete Buttigieg has described as a “national crisis.” Americans are three times as likely to die in a car crash as citizens of our peer countries. Decades of policy choices prioritizing big, fast roads and car-commuter convenience got us to this point. But why have things gotten so much worse recently? The best working theory I have seen is that the kind of Americans who were out on the roads a lot during the pandemic were the kind of Americans more likely to engage in risky behaviors. With fewer cops and cars out there, they did. And when the cops and cars came back, these Americans kept on driving like maniacs.
As a result of the increased rate of traffic fatalities, some localities have increased fines and fees related to speeding, running red lights, and so on. (Expect that kind of thing to really ramp up if cities and towns begin running into fiscal trouble.) That’s an additional expense for drivers, though arguably one that should go up given the social cost of traffic violence.
Put everything together, and owning a new car is about as expensive as renting a starter studio apartment in a lower-cost city: $12,000 a year. The expense has come to reflect the miserable social cost of America’s obsession with and reliance on private-vehicle ownership. We’re a nation of bad drivers in huge cars traversing roads constructed for volume and speed, our long commutes into our oversubscribed cities making us miserable, our trucks getting damaged by the climate change they helped create. If there’s any upside to the surging prices, maybe it’s that they will force more of us to think that a little investment in public transportation could be a good thing.
