CLEVELAND — The consumer price index shows a drop in prices for new and used cars, but the cost of owning a vehicle is rising.

What You Need To Know

  • Owning a vehicle is becoming more expensive 

  • Car insurance prices have skyrocketed 

  • Financial experts recommend making a plan to make sure you can afford car expenses 

New car prices are down 3.5% since 2022, according to Kelley Blue Book. 

“We’ve already started seeing a number of manufacturers make some adjustments to vehicles as far as their pricing is concerned or either reducing the price of the vehicle or increasing the incentive to move out some of the vehicles that are still sitting on the lots,” said Lou Vitantonio, president of the Greater Cleveland Automobile Dealers Association.

But even though the price to buy the car itself has gone down, just about every other cost of owning a vehicle has gone up, including maintenance. 

“You always have to keep up with the maintenance and repair,” Vitantonio said. “And those are some of the things that you have to do regardless, and you want to do that not only to keep yourself safe, but you also want to keep the value of your vehicle up when you’re ready to ultimately trade it in, you want to have it in good shape.”

Along with maintenance, car insurance costs have also increased. According to Bankrate, the average cost of full-coverage car insurance increased by 26% last year. Walter Russell, a financial adviser, tells his clients to work with an independent agent. 

“The independent agent can shop their car situation, their car insurance to multiple different carriers,” Russell said.

Russell said working with an independent agent is the best way for his clients to know they are getting the most affordable rate. 

And while gas prices are down from pandemic highs, the Bureau of Labor Statistics reported prices overall increased in March.

“Inside that plan you know we need to be realistic. We need to put in place, ‘What if?’ case scenarios. What if gas goes up to $5, $6 dollars a gallon? What if car insurance goes up 25%?” Russell said.

Russell said these are all factors someone can discover when they make their financial plans. 

“This car that you love might not be affordable for you, so does it make sense to buy less of a car? Some people, does it make sense to buy an electric car?” Russell said.

Russell encourages people to work with a financial adviser to determine what they can afford.