Cost of Car Ownership: Data and Survey

The Zebra
Oct. 15, 2019

Car ownership in America: trends and analysis

Is owning a car really necessary in America today? A nationwide survey conducted by The Zebra shows the majority of people believe it is, despite the availability of other options like public transportation and ridesharing. 

  • 63% of people said yes, owning a car was necessary for easy living.
  • 14% said no, public transportation was easier and cheaper.

Some respondents mentioned the downsides of driving, including the inability to drive due to disabilities or the inconvenience of public transportation in major cities. 

One respondent said, "I wouldn't use an Uber or Lyft due to safety reasons and public transportation takes such a big amount of time to get to a destination." 

Another respondent said, "I like to have access to go when I please, leave when I please, and not be depend on various strangers driving me around."

Other interesting findings from The Zebra's driving and transportation survey:

  • 17.4% said they did not have access to a personal vehicle.
  • 38.1% of respondents said they never used public transportation.
  • 57.3% of respondents said they could not get to work easily without their car.

 

Reported car ownership by gender

  • More men than women reported having access to a personal vehicle.
  • Men were more likely than women to report they could get to work easily without a personal vehicle. 
  • Women are less likely to take public transportation than men.
MenWomen
20.5%14.6%Reported access to a personal vehicle
22.6%21.2%Reported access to work without a personal vehicle
34.9%41.0%Never use public transportation

 

Reported use of public transportation by age group

The majority of survey respondents said they use some form of public transportation. Of these respondents:

  • 30.4% Gen Y-ers (aged 18-24) reported using public transportation for any distance too far to walk. 
  • 45.5% Millennials (aged 25-34) reported never using public transportation at all.
  • 7.1% Baby Boomers (aged 55-65+) reported using public transportation to reduce air pollution and traffic. 

public_transportation_age

 

Car ownership statistics in the United States

The following is derived from a variety of sources, including Edmunds.com, Hedges & Company, and the Bureau of Labor Statistics.

  • From 1960 to 2010, the percentage of households owning zero cars in the U.S. dropped to 8.9% from greater than 20%.
  • From 2012 to 2019, the number of registered vehicles in the U.S. decreased by more than 27.3 million.
  • 6% of all U.S. households lease one or more cars.
  • In 2001, Baby Boomers alone were responsible for just 39% of all new car purchases.
  • On average, 62% of all new cars purchased in the United States are bought by elderly drivers aged 55 to 75. 
  • In 2015, the average buyer of a new car earned about $80,000 per year, according to the National Automobile Dealers Association.

 

Car ownership and poverty in the United States

  • In 2006, 22% of low-income adults reported having no access to a vehicle. 
  • In 2016, 20% of low-income adults reported having no access to a personal vehicle. 
  • In 2018, researchers at UCLA reported the biggest factor in declining public transportation usage was overall increased car ownership among lower-income residents.
  • Researchers tied this increase in car ownership to the migration of low-income families to cheaper suburbs with limited public transportation options. 
  • The Panel Study of Income Dynamic, beginning in 1968, found that households with access to a personal vehicle were wealthier than those without.
  • The Panel Study of Income Dynamics also found that in 1955, those with cars had twice the amount of income as those who didn’t. Nearly sixty years later, data show car owners made nearly three times as much as their non-owner counterparts.
  • Despite this increase in low-income car ownership, the average cost of an auto loan has increased for the past six-plus years, according to the Federal Reserve Board of New York.
  • Steven Raphael and Alan Berube at UC Berkeley found five of the 10 cities with the highest percentage of residents without cars were located on the East Coast:
    • New York City: 42% of residents with no car
    • Jersey City: 30%
    • Waterbury, Conn: 16% 
    • Philadelphia: 13% 
    • Newark: 12% 

 

Medicaid and exempt status

According to AARP, 20% of all Americans are on Medicaid. 39.7 million Americans in total are living below the poverty line. Medicaid is an incredibly important program for the millions of Americans struggling to meet basic needs. Discover what is exempt from the standardized income levels before you need it. 

  • A single vehicle is often excluded from the $2,000 limit on assets mandated by Medicaid. The car must fit into one of five categories to be considered exempt.
  • Category 1-4: The automobile is needed for daily activities such as transportation to and from medical appointments.
  • Category 5: The vehicle is transferred to a spouse. This is especially true where the person lives in a community property state. The value of the vehicle is not important to the exemption status, as long as the transfer is not considered to be an unqualified transfer under Medicaid rules. 
  • The vehicle is considered non-exempt when a Medicaid client owns a vehicle that does not fall into one of the five exemption categories listed above. Any value above $4,500 is counted toward the $2,000 total assets limitation. 

 

Community support

If public transportation or ridesharing are not viable options and you or a loved one are in need of additional assistance getting around, consider the following organizations for aid for those without a personal vehicle. See also the Medicaid exempt rules for car ownership below.

 

Car ownership by age

For a deeper investigation of these statistics, please review the full reports at J.D Power and Associations, Hedges & Company, and the Federal Highway Administration.

  • According to J.D. Power and Associates, in 2000, the average age of new-vehicle buyers was 43. Nine years later, the average age was 49.
  • Between 2000 and 2015, the share of new vehicles bought by those aged 16 to 34 fell by about 6%, according to Hedges & Company.
  • In 15 years, the share of new vehicles bought by those aged 35 to 49 decreased by 9%.
  • Today, thoseaged 16 to 34 are the least frequent buyers of new vehicles. This (along with another economic and cost factors) aligns with research conducted by the Federal Highway Administration, which found the share of American 16-year-olds with driver’s licenses was roughly 25% in 2014, a significant drop from about 46% in 1983.
  • The average age of new vehicle buyers increased by almost seven years between 2000 and 2015, cites Hedges & Company. Some of that increase reflected the aging of the population, but it also reflected changes in buying patterns among people in different age groups.

car_ownership_age

 

U.S. car ownership by race

Formore information on the statistics surrounding car ownership and race, consider reading more at UC Berkeley News, Governing.com, and the University of Michigan.

  • Researchers at UC Berkeley found in 2006 black households were much less likely to own a car than were white households, identifying a growing gap between car ownership in white and black households that spanned income levels. 
  • 19% of African Americans reported living in a household without access to a vehicle.  
  • 4.6% of White Americans reported living in a home without access to a vehicle.
  • 13.7% of Latino households reported not having access to a vehicle.
  • White Americans comprised 64.7% of U.S. car buyers in 2015.
  • In 2015, Hispanic buyers accounted for 12.2% of U.S. car buyers.
  • That same year, the purchasing power of African- and Asian-Americans combined made up less than 15% of total car buying power in the U.S.

 

Car ownership statistics by state

The following numbers are taken from a report released in 2017 by World Atlas. 

Nearly every person owns a car

90% of people own one car

80% of people own one car

Wyoming

Alaska

Minnesota

Montana

Delaware

Utah

North Dakota

South Dakota

Michigan

Iowa

Ohio

Washington

Alabama

Vermont

Oklahoma

 

Louisiana

Wisconsin

  

Connecticut

  

Kentucky

  

Tennessee

  

Virginia

  

California

  

Kansas

  

New Hampshire

  

Missouri

  

Massachusetts 

What’s the cost of car ownership in the US?

  • According to the Bureau of Statistics Consumer Expenditures Survey in 2017, it costs $9,576 per year to own and operate a licensed vehicle in the U.S. The previous figure includes a cost of $4,054 to purchase the vehicle, $1,968 in gasoline and motor oil expenses, and $3,554 in other vehicle-related costs.
  • An analysis of car ownership done by the American Automobile Association (AAA) found average annual costs of $8,876 to own and operate a car. 
  • The AAA figure — with inflation incorporated — adds up to $443,800 over 50 years.
  • In 2015, the average American spent 15.9% of their income on transportation, dedicating funds to buying, maintaining, and fueling their vehicles.

Before purchasing a car, consider depreciation, interest on your loan, additional taxes and fees, insurance premiums, fuel costs, yearly maintenance, and out-of-pocket repairs.

 

Cheapest cars to own

  • Compact cars have the lowest cost of ownership, according to an analysis conducted by Kelley Blue Book.
  • Maintenance is a huge factor when considering the lowest cost of ownership for used cars. The Toyota Camry is a roughly more expensive purchase than the Mazda6, but it is also $2,000 cheaper to maintain.
  • A Dodge Journey ($23,425 MSRP) is more affordable purchase than a Toyota Highlander ($31,830 MSRP), but overall, owners will spend about $5000 maintaining the Highlander over the Journey.

 

Owning vs. leasing a car

Cox Automotive and Hedges & Company were the original sources of these statistics, taken from various research such as the Automotive Trends report compiled by Hedge & Company. 

  • A recent study by Cox Automotive shows new vehicle lease originations increased from just over 1 million to nearly 4.5 million in the seven years between 2009 and 2016.
  • Vehicle leases comprised more than one-third (31.9%) of all new car transactions in 2016, and 31.1% of such transactions in Q1 and the first half of Q2 in 2017 (Source: 2017 Used Market Car Report.)
  • Nearly one-third of millennials chose to lease their cars rather than buy in 2016. This age cohort made up 12% of all leases in the US.
  • The following is a breakdown of income brackets with the percentage of those income levels that lease a car:
    • Household income under $25,000 — 4%
    • Household income $25,000 to $50,000 — 5%
    • Household income $50,000 to $100,000 — 10%
    • Household income $100,000 and up — 13%

 

Electric car ownership statistics

Electric vehicle ownership increases by the day. The following statistics are taken from recognized authorities such as CBT News, CBS, and the World Atlas. 

  • In 2017, an estimated 3.1 million electric vehicles were on the road globally, up 54% from 2016.
  • The United States has the second-most electric vehicle owners among all countries (762,000). 
  • Electric vehicle sales in the United States in 2018 numbered 361,307, nearly doubling the 2017 total.
  • According to the International Energy Agency, by 2030, there will be 125 million electric vehicles operating globally. 
  • Tesla sold 139,782 units of the Model 3 in 2018. This accounted for almost half of all plug-in vehicle sales.
  • The Toyota Prius Prime was the second-best-selling electric car of 2018, with nearly 30,000 units sold. The Chevy Bolt made the top 10 list but was well behind the market leader, with just 18,019 sales in 2018.

 

Luxury car ownership

  • According to Edmunds.com, luxury cars account for 18% of all car sales revenue, contributing more than $100 billion to the market.
  • Most wealthy American drivers do not own luxury cars: in fact, 61% of car buyers with household incomes of $250,000 or more don’t own a luxury car, according to Money Under 30.
  • The age group most likely to purchase a luxury car in 2014 was the 18-to-34 cohort, which comprised 45% of luxury vehicle buyers.  

 

Car ownership and insurance

Insurance is a major contributor to auto-related costs. While you might save some money on the original purchase by purchasing a used car, you could shell out extra money each month because of your insurance company’s concerns about ongoing repairs. 

Here's a look at monthly insurance costs as a portion of the true cost of car ownership. 

car_ownership_insurance

 

Data sources

 

Methodology

The auto insurance rates displayed in our articles are based on the 2019 results of The Zebra’s comprehensive car insurance pricing analysis. In our analysis of all US zip codes — including Washington D.C. — our user profile consisted of a 30-year-old single male driving a 2014 Honda Accord. To generate pricing specific to particular rating factors, we altered the driving profile based on the common pricing factors utilized by top car insurance companies. These factors include, but are not limited to, credit score, coverage level, and driving record.

Copyright © 2019 InsuranceZebra, Inc. All rights reserved. For inquiries regarding this content, please contact our team at statistics@thezebra.com.