$1000 vehicle payments at record high

It's mainly the availability that makes it so expensive. I'd have to go clear accross to the other side of the state, or even into another state, before I can find a car rental that rents passenger vans. Either I'd have to take several days off (a day off to get there, a day off to get back, a day off to bring it back, a day to return home, not including the days off for the reason I wanted to rent a passenger van), or I'd have to go get it a weekend before the weekend I need it, and then bring it back the weekend after. So I'd have to rent it for two weeks for only one or two days of actual use.

 

Yeah, I agree that the expense of private transportation was never cheap, even thinking all the way back ~40 years ago. We have always been two car family. When the kids were young and I had a daily commute for work, it was by necessity. I did not keep close tabs on personal financing back then, but I am almost sure that car expenses (including everything involved with it, fees, tax, fuel, etc) was almost always one of the largest budget items next to housing.

Even when we were living in a suburb of Boston, it was nearly impossible for me to commute using public transportation only. So, we kept two cars, and sometimes three cars as we provided a car for kids as they grew older and started needing transportation of his/her own. We just gave our second car (Pathfinder Hybrid) to our daughter who is expecting a second baby soon. They have managed with a single car (Gen2 Prius) so far, but with two baby seats, it is going to be a tight fit. I am not sure if they are going to keep both cars or get rid of the Gen2.

But, now we are a 1-car family with two drivers. With no daily commuting for me, no big trips planned, and no kids to chauffeur, I think we can manage it. I am expecting the overall private transportation cost to be the second lowest this year. Why not the lowest, you may ask? After our previous mini-van, the 2005 Sienna, was decommissioned, and until the replacement vehicle was found, we managed for ~1 year with just a Prius Prime. It was not easy because I was still commuting back then, but with carpooling for commuting, I managed. That was by far the lowest private transportation cost year.

 

We've already made it to the point where dealerships are routinely faking the temporary tags they put on used cars they sell, because it's just too much trouble to legally change the owner when they know they'll be repoing the car in a couple months anyway.

 

I would like to be a one car family, but we are in a situation you described that you were in a few years ago - we need two cars to make things work - especially with a college age driver who needs a car intermittently.

I know each state is different and you can't generalize as even insurance companies are different - our youngest child is on our insurance as they are in college- which adds at least $1000 a year to the auto insurance bill and recently because our particular state seems to be so generous with court awards, we were informed we will need to begin carrying an umbrella policy in addition to our auto insurance since we have a minor driver. While we haven't had any incidents or tickets, I guess insurance companies are playing defensively against states who have no control over civil award in suits that could come from an automobile accident.

 

During the last ~10 years, I have purchased 8 vehicles, including three used and five new listed on my signature. What I have learned was that the worst time to buy a car is when I have to buy a car by necessity. There is no leisure time waiting around and doing comparison shopping. And a savvy sales rep usually feels this pressure from a potential customer... or "prey". I have made some bad car purchasing decisions in the past and ended up costing a big money either upfront or on a longer term after the purchase.

I really don't think our kids know how to buy a car below the dealer's asking price. It is not something easy to teach, but something I learned doing many deals. Yep, I have never paid MSRP per se, even on the most recently purchased Escape PHEV. With applied incentives and tax credits and negotiation to get the trade-in value upped, the effective cost of the car was ~$10K below MSRP. And with a trade-in, an effective out-of-pocket cost was ~$1K.

 

$1,000 a month car payment? That's a crying shame! I don't know too many people, these days, in the market to buy a new vehicle.

Our first mortgage was in 1995 in West Texas where we had a new 3-bedroom, 2 1/2 bath, 2 car garage built for $65,000. My mortgage payment was $550! My current home, here, is approaching $700K in value but I only paid $250K in 2003. It's just crazy and my heart goes out to the younger folks just trying to get ahead.

 

If you are living in your house and don't intend to sell, a higher assessment for taxes will go against you as your taxes will be higher.

 

Yeah, having kids on your insurance is a killer. We used to live in MA where our older son and daughter went to college, we had to have three cars and have kids on our insurance. I don't remember the exact cost, but during that time, our car budget might have been even higher than our housing. LOL.

Moving to ME dropped our insurance cost by 80% instantly. I still kept our youngest son on our policy which wasn't bad until... he managed to total our HCH twice. I helped him purchase his own car, CRZ, and kicked him off of our policy. grin

Without kids on our policy. The cost of insurance is now almost negligible in part of the total car cost, even though I carry the highest possible liability and full collision and comprehensive coverage they offer.

Yep, same here. Without the pandemic, I would be still commuting to my work daily. The 3+ years of pandemic measures have convinced the management of our institution that certain jobs can be performed remotely without loss of productivity. My position happens to be one of them. So, with no commuting, and no desire to travel or visit crowded places, our driving miles have decreased precipitously in the last three years. Before the pandemic, I was driving ~15k miles on my daily driver and additional ~10k miles on our second car making the total mileage of ~25k miles for two cars per year. In the last few years during the pandemic, this number has decreased by more than 100%. A total of ~12k miles on two cars per year has been the average. And I don't plan to change this lifestyle.

 

Yep, our property taxes have gone up in Colorado but we just had, on the ballot, a chance to lower them a bit so that passed by a huge margin! But, compared to other states, we don't have a huge property tax burden. My friends Mom just moved here from upstate New York which has a huge property tax burden on folks.

 

Yeah, the insurance rate is a strange thing. You would not know how it affects your situation until you see the bill. Type of car you own, number of drivers, age of drivers, gender of drivers, past driving records, where you live, and how the car was used all affect the rate in unpredictable ways. They are supposed to be using some type of model based on the actuarial rate estimates, but I don't think anyone really knows what goes into the estimate models.

We lived in MA in the period when auto insurance was state regulated. So, it did not matter what insurance company I used, for the same coverage, the premium was the same but usually extremely high compared to other states for similar coverage. I know this since I moved to MA from out of state with two cars to be insured. And move out of MA to another state later. MA was the by far the most expensive of all states we have lived in. When we first moved to ME, the previous insurance company did not offer the policy here, I switch to Metropolitan just because they offered bundle discounts with the homeowner policy we already decided to buy. Used Met for a while, up until I first bought the Gen3 back in 2015. It was the very first "brand new" car I have ever purchased. Until then, I have leased new cars a number of times but never purchased one. All cars purchased prior have been used cars.

What happened was that after closing the purchase at the dealership and they required me to have proof of insurance, I added this new Gen3 base model to my policy, and the premium jumped ~300%. I have never shopped around for insurance before because in MA I didn't have to, but after searching for a better deal, I soon discovered that GEICO had the best deal. By switching to GEICO, I actually ended up reducing the total premium for having all three cars covered compared to the previous policy with Met for the two older cars. Nope, I can't explain why. But needless to say, I switched from Met to GEICO, and have been a GEICO fan ever since. They are one of the easiest insurance companies to work with using the only online portal. Never have to visit an agent. So easy to add, drop, swap the car, change coverage, and get quotes for the "what if" scenarios. I now do comparisons of auto insurance policy premiums including other companies when I add or drop a car, but so far, I have not found a single company that can lower the GEICO premium.

 

My insurance broker retired, and another one "inherited" us as clients.

When I went in for a review the guy pulled up the auto policies and his brow furrowed very deeply. He thought something was really wrong and got quiet. I finally asked, and he said he hadn't seen an auto policy with premiums as low as ours in a long time, and felt that there must be a mistake. No mistake found yet.

 

Insurance is an interesting product to shop around- in our state it is normal to get substantial discounts for bundling insurance (one company does all your home, auto, umbrella, life etc.) loyalty bonus (length you been with your current insurance company), pay in full discount, good driver discount (no accident or tickets), claim history etc. It you shift one policy to another company in our state - it is like a house of cards that starts to fall apart. For example, if you shift your auto insurance your home, life and umbrella policies all go up because you have unbundled them- so typically if you shift one policy you have to shift them all.

As a side note, believe a person's credit score can also determine insurance rates

How Credit Score Affects Insurance Rates - Partners Insurance, Inc. (partnersinsuranceinc.com)

How Does Your Credit Score Affect Auto Insurance Rates? - ValuePenguin

 

We are essentially a single car family. One Avalon, a couple and two teenagers. I'd like to get the Prius going but I haven't had the time nor the money.

The boys are not on my insurance policy and I don't let them drive because we can't afford it yet. I guess the poor guys will have to wait until they have a job to get their own car and insurance. The oldest is 17 already. If rent hadn't tripled during the pandemic we may have had a different story.

In the past 17 years I owned mainly 5 vehicles with a couple of "project cars" that never did anything for use. My first was a 1984 Toyota Pickup that I got for free. We sold that and got a 1993 Mazda 323 for $250. Then we upgraded to a 4 door 1984 VW Golf diesel for $600. Then we tried a 2013 Nissan Leaf for a year and sold it and got the 2013 Avalon we have now. Our two project vehicles were a 2001 Chevy Astro that I could not for the life of me get to work that had cost me $1,000 and I sold for $700, and a 1972 VW Super Beetle that I bought for $3,000, rebuilt the engine in it, and sold for $5,000 once I got it running.

 

Yeah, a teenage boy on policy is very expensive. My oldest son did not get his driver's license until he was in college and did not get his car (my hand-me-down) until he finished college. He was not living in our house while he went to college, so I did not have to list him on my policy until he finished college and came back. He needed a car to look for work but was on his own not too long after that. Our daughter was the same way, did not get her license until she finished college. She did not need a car for where she lived and what she was doing, so I never had to put her on my policy. Our youngest boy got his license during his senior year in high school but did not get his car (my hand-me-down) until he started college. I kept him on my policy for years until he totaled his second car (second hand-me-down). That was the period most costly. He is now on his own with his own car.

 

An interesting thought, perhaps Full Self Driving (FSD) should initially be obligatory for them. Force them to manually override FSD.

Bob Wilson

 

From a recent discussion elsewhere, it appears that today's auto insurance gender premium gap is much narrower than it was when I was young. And for teens, it doesn't appear that the narrower gap is because boys have become any safer. Rather, it seems that the girls are now driving more like the boys always have.

Another change, showing in several but not all sources: there are now age brackets where women's rates are actually higher (slightly) than men's rates. Back when I began driving, there was no such thing, female rates were always lower than male rates, for all ages, and the gap was not insignificant.

I'm guessing that today's narrowed gender gap is an indicator that women are now driving a lot more than they used to.