Photo Credit: AAA
HYANNIS – The American Automobile Association has released data that said the finance costs of a new car purchase have jumped by 24% this year, raising the average annual cost of a vehicle to $9,282, or $773.50 a month.
That’s the highest the cost of owning a vehicle has been since the AAA started tracking the data in 1950.
It comes from “Your Driving Costs,” which reviews nine categories of cars to determine averages of operating and ownership costs of vehicles.
“AAA found finance charges rose more sharply in the last 12 months than any major expense associated with owning a vehicle,” said John Paul, AAA Northeast Senior Manager of Traffic Safety.
The auto club said that the cause of the rising finance charges is due to the rising federal interest rates and higher vehicle prices, as well as depreciation in the car’s value, which can account for more than a third of the average annual cost.
They also said the 72-month loan for a car has become more common, which results in buyers paying more for longer.
The AAA found that every 12 months added to the life a loan adds about $1,000 to the total finance charges.
The group advises researching, budgeting, and checking used options before making any large car purchase.
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