The average automobile on the road is now 12.5 years according to a recent Associated Press story, which cites research by S&P Global Mobility.
According to figures from Edmunds.com, the well-known automobile website, the average price of a new vehicle is nearly $48,000, a new record. The average interest rate for that purchase is now 7% which pushes the average monthly payment to $729.
The monthly payment for a used automobile is averaging $563, which comes with a double-digit interest rate
EJ Antoni, who studies regional economics at The Heritage Foundation, says it’s understandable for families to keep a paid-for vehicle when inflation has eaten away at their paycheck.
“Wages are not keeping up with the increases in car prices, in food, in housing, etc.,” he says. "So it is two things. It is not just the fact that prices are going up. It's that wages are not going up as fast either."
More car buyers who are making those high payments are also surrendering more keys to the repo man. The number of repossessed automobiles jumped 11% in 2022 and that number is expected to climb this year due to higher payments, according to a Fox Business story.
That same story, citing Edmunds, said the number of drivers who are paying $1,000 a month accounts for about 16% of car buyers.