Not only are the prices of new and used vehicles near record highs, but the cost of keeping those cars and trucks running continues to go up as well.
A new report from the Federal Reserve Bank of Minneapolis found that the cost of vehicle repairs is an increasing burden on households. Overall inflation, as measured by the consumer price index, slowed to 3.7% over the year in August, down from its 9% peak in 2022.
The cost of vehicle repairs, however, had risen 17%, and the cost of maintenance, such as an oil change, was up 9% over the same period. Tanveen Vohra, manager of content and communication at Insurify, says many shops have raised wages to attract and retain workers. She also says parts are more expensive.
“Material costs, such as the price of steel, aluminum and rubber have increased due to global supply chain issues that have plagued the industry for the last few years,” Vohra recently told ConsumerAffairs. Additionally, improvements in automotive technology have raised expenses overall, as parts are more technologically advanced, they become more expensive to repair and replace.”
Repairs and routine maintenance have become so expensive that these costs need to be considered when purchasing a car. After all, some cars have a better reputation for quality than others.
It costs money just to own a car
Kelley Blue Books offers a tool that provides the “Five Year Cost of Ownership.” It includes the purchase price of the vehicle, the estimated cost of fuel over the period, interest payments, repairs and maintenance and depreciation. Those total costs are more than you might think.
For example, among compact cars, KBB names the MINI 2-door hardtop as number one in its class. Its 5-Year Cost to Own is $33,465. Among luxury brands, the Tesla Model 3 has the lowest ownership cost, $43,747.
The MINI’s estimated maintenance cost over five years is $2,108. The estimated cost of maintaining the Tesla over that same period is $3,115.
If you’re driving an older car it may require more frequent repairs and maintenance. In the case of older vehicles an extended service contract, or “warranty,” might make sense.
These policies can vary greatly in what they cost and what they cover. ConsumerAffairs checked out 50 companies and named seven as offering the best coverage.
Photo Credit: Consumer Affairs News Department Images
Posted: 2023-10-11 11:09:10
