Why Car Ownership Is Getting So Expensive | CNBC Marathon

CNBC Marathon examines a variety of factors that lead to car ownership in the U.S. being so expensive, from auto loans to repairing your vehicle.

A car loses about 10% of its value as soon as it's driven off the lot. And within the first three years, that number goes up to 50%. Depreciation — the rate at which that happens — is one of those numbers everyone in the automotive world thinks about including consumers, automakers and the massive used car market, which made up somewhere around 35.2 million in 2022 — compared with 13.8 million new cars.

More than 100 million Americans have an auto loan and auto loan debt in the U.S. is at a record high of $1.56 trillion. Between the Covid-19 pandemic, supply chain issues, alleged predatory lending practices, inflation, and the Federal Reserve's interest rate hikes, getting an auto loan is getting increasingly difficult and costly.

Auto repair costs have been rising for years, but recently they've spiked. Experts say it's likely a mix of factors including heavier, faster and more complex vehicles, riskier driving behavior, new technology, and labor and supply shortages. Repair shop owners say they can’t find enough technicians despite paying six-figure salaries. As technology marches forward, and fancy cutting-edge EVs fill the roads, consumers hear horror stories about huge repair bills. But insiders say there are reasons to be optimistic.

Chapters:
00:00 Introduction
00:32 Why Cars Lose Their Value So Fast (Published December 2023)
13:18 Why Americans Are Falling Behind On Car Loans (Published August 2023)
30:30 Why Car Repairs Are Getting So Expensive (Published February 2024)

Produced by: Robert Ferris, Emily Lorsch
Edited by: Darren Geeter
Animation by: Christina Locopo, Jason Reginato, Alex Wood
Additional Camera by: Ryan Baker
Senior Managing Producer: Tala Hadavi
Additional Editing by: Jack Hillyer
Additional Footage: Getty Images, Rivian, Kia, Tesla, Insurance Institute for Highway Safety
Additional Sources: Experian, Bankrate, Federal Reserve Bank of New York

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online

#CNBC

Why Car Ownership Is Getting So Expensive | CNBC Marathon

[dabiri]

I just paid off my car early and my credit dropped 32 points and I’m now considered a “more risky borrower to lenders.” LMAOOOO

[PeteCorp]

I've never had a car loan. Still driving around my $4000 used Corolla.

[dboucher]

Someone crashed into my paid off vehicle, a hybrid that never required a single repair and was cheap to own and operate. I planned on keeping it forever but it was totaled. I was in for the shock of my life when I realized how expensive used cars are nowadays.

[treeroofgrass]

Scotty Kilmer: I’ll keep my ‘94 Celica that i paid $300 bucks for 😂😂😂.

[PricefieldPunk]

Everything is going way up except our wages..

[sportsMike]

Just remember a car is an expense not an asset

[brandonabad]

People think they’re high & mighty with their cars. 1k car payment on a depreciating asset to impress people is INSANE but it’s normal now.

[WitchyWhale]

Stop buying new cars and keep the one you're driving forever.

[BolognaRob]

It is getting nuts. Car payments are high, insurance is high, property taxes are WAY up, renewal fees have quadrupled in the last few years where I live, gas is high, even the smallest repairs are jaw droppingly expensive. I don't blame young kids for saying F-it.

[dylantwists]

The dealership laws that require the purchase of a vehicle through a dealer are a large contributor to the cost of a new vehicle. Some manufactures would choose to sell direct to consumer, but aren't legally able in most states. SCAM

[Mia-Mendez]

Good thing we built our whole society around requiring a car to get anywhere

[letsgobrandon]

Don't buy new cars! Only by a car if you must, buy the "newest" used car you can AFFORD not that you want. Drive it, take care of it for as long as you can and only replace it when forced to.

[Owen-rxwq]

Not seeing the size of cars being spoken about, vast majority of people don't need their SUVs and Trucks

[thatoneotherotherguy]

"Why car ownership is getting so expensive". The thumbnail is the majority of the answer. Most people used to drive ordinary economical sedans and hatchbacks. The picture is of what's now typical: a midsize SUV or larger, or a truck. These vehicles are luxuries; they are more expensive to buy, run, maintain, insure, and fix. Choosing one is choosing higher vehicle costs. All these people crying "I'm struggling to afford a basic midsize SUV I don't need" could go buy a fuel-sipping $22, 000 well-equipped 2024 Corolla and live within their means, but instead of living within their means, they want to complain about a self-imposed problem of driving large, expensive vehicles.

[flyfishac]

Stop manufacturing cars with BS gadgets and give me simplicity. I don’t want my car to be a freaking computer!!

[NicksDynasty]

We deserve walkable and bikable neighborhoods with fast frequent transit instead of relying on expensive car dependency

[bomorris]

This 44 minute video could be 2 minutes. Just say "Everything is computerized now, and even repair shops can't fix some problems. You can't fix a car for under $1, 500 due to inflation and computer systems being so complicated."

[raylo]

No matter what car you buy, it's a money pit.

[jerryglasses]

Car ownership isnt expensive. Everything is too expensive. Food, healthcare, homes, education. When everything becomes too expensive cost isnt the problem. The problem is wages are too low.

[ken]

If you are physically able, become a YouTube mechanic and do MOST repairs yourself. I've saved thousands of dollars doing this. This applies to house repairs, too.