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Co$t of the Average Car

We were curious as to whether cars are more or less expensive than back in the day based on a percentage of household income. Keep in mind we used the ‘average’ priced car not the Nissan Versa which is today’s least expensive at about $12,780 but then who on earth would want one?

 

Year 

 Average Household Income 

 Average Cost of a Car 

 % of Income 

1900

$637

$1,168

183%

1910

$1,134

$950

84%

1920

$1,518

$393

26%

1930

$1,524

$640

42%

1940

$1,725

$800

46%

1950

$4,237

$1,510

36%

1960

$5,620

$2,600

46%

1970

$7,701

$2,500

32%

1980

$16,671

$5,413

32%

1990

$28,680

$9,437

33%

2000

$41,446

$21,850

53%

2010

$48,691

$28,160

58%

2014

$53,013

$32,386

61%

It appears that cars are getting more expensive for the average household resulting in about 85% of car purchases being financed. The average loan payment is $488 / month (over an average term of 5 years, 7 months).  The average lease comes in at $405. This may explain the increase in leases to about 30% of new vehicles financed.

The real question is ‘should I lease a new car, buy new or purchase a used one’? Here's what Edmunds.com found based on a car that sells for $24,775. 

After six years, here are the total out-of-pocket costs of each financing method:

Leasing $23,476
Buying New $28,104 
Buying Used $20,364

But wait a minute, at the end of a lease you have no asset. They own the car.
When you add the value of a used car the long term costs change.

Leasing $23,476
Buying New $18,417
Buying Used $15,570

What about the cost of repairs? Most leases cover them. Hmmmm... I think I need a nap.