Drivers rethink the optimum number of years to hold on to a car as the costs of ownership increase
- The average transaction price on a new vehicle has increased from $39,950 to $46,660 in three years
- Repair and maintenance costs are up 8.2% year-over-year
- Insurance costs are up 22.2%
- U.S. vehicles’ average age hit a record 12.5 years in 2023
- Rising vehicle prices and new technology are changing the math on how long to keep a car
- Lexus and Toyota have the fewest reported problems by owners in the first three years
- Electric vehicles have higher rates of reported problems due to their batteries and technology
- Low inventories and high prices have made car purchases more complicated
- Owners are reconsidering when it makes sense to sell a vehicle
- Drivers typically give up on a car when they lose trust in it
Jeremy Morris, a financial adviser in Idaho, saved over $100,000 by driving his Toyota Tacoma for 24 years. The average transaction price on a new vehicle has increased to $46,660, while repair and maintenance costs are up 8.2% and insurance costs are up 22.2%. As a result, more people are holding onto their cars for longer, with the average age of U.S. vehicles reaching a record 12.5 years. Rising vehicle prices, longer loans, and new technology are changing the optimal amount of time to keep a car. Lexus and Toyota have the fewest reported problems by owners, while electric vehicles tend to have higher rates of reported problems. Low inventories and high prices have made car purchases more complicated, leading drivers to reconsider when it makes sense to sell a vehicle.
Factuality Level: 8
Factuality Justification: The article provides factual information about the trend of keeping cars longer due to rising costs of car ownership, higher inflation, and increasing vehicle prices. It includes real-life examples and statistics to support the claims made in the article. The information presented is relevant and accurate, without any obvious bias or misleading information.
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the trend of keeping cars for longer periods due to rising costs of car ownership. It includes real-life examples and statistics to support the claims. The information is relevant and focused on the topic without diving into unrelated territories. The article also offers insights into the economics of long-term car ownership and the changing dynamics of the auto industry.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the rising costs of car ownership, including the average transaction price of new vehicles and the increase in repair and maintenance costs. This information may impact the automotive industry and related financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article does not describe any extreme events.
Public Companies: Toyota (TMC)
Key People: Jeremy Morris (financial adviser), Tom Piippo (owner of Tri-County Motors), Ivan Drury (director of insights at Edmunds), Steven Newton (federal contractor), Kristen Newton (not specified), Liz Nickles (writer and marketer)
Reported publicly:
www.wsj.com 
