There’s good news for both drivers and those using ride sharing – the cost of owning a car is falling. In May, CBS News reported that the American Automobile Association (AAA) calculated that the cost of owning a typical sedan in the United States fell from $9,122 a year to $8,876 between 2013 and 2014, or around 2.7%.
AAA’s figures are based on the expenses incurred by a typical 47-year-old man with a good driving record. Auto insurance, routine car maintenance, tire replacement, financing, licensing, registration, and taxes are figured in, as well as gas. Since the amount doesn’t include car payments, it might not be typical.
Actual costs might be higher because online auto website True Car calculated that the cost of the average new car in the United States rose from $31,077 to $31,798 in the last year. The average American is paying more for his or her wheels, which means a higher car payment.
“It’s extraordinarily relevant that people are willing to pay more for automobiles,” TrueCar President John Krafcik told Bloomberg Businessweek. “Especially when the narrative has largely been that cars are playing less of a role in our lives.”
Overall car prices are higher because of lower interest rates, the popularity of larger vehicles such as pickup trucks and SUVs, and more features on cars. The huge amounts of money that rich people are willing to shell out for super cars and other luxury vehicles is also driving up costs.
Interestingly enough, owning a car is still cheaper than ride sharing in the 50 largest American cities, Nerd Wallet discovered. Relying on Uber, Lyft, or Side Car is still more expensive than owning your vehicle. The reason for that is the base prices Uber charges.
Although those who use something like Uber or Zipcar occasionally and rely on public transit or the bicycle for daily transportation will still save money. Among other things, Nerd Wallet discovered that Uber is still not an economically viable option for those who need a vehicle to commute every day.
The good news for drivers is that auto costs are likely to fall even more next year. The New York Times reported that falling gasoline prices could fall low enough to increase average people’s income and boost the economy. Gas prices in many markets recently fell to below $3 a gallon. Since Americans spend around $1 billion a day on gas, the boost to the economy could be huge.
The average American household could see an income boost of around $400 a year, Tom Kloza, the head of energy analysis at the Oil Price Information Service, told The Times. That could translate into an additional $70 billion in consumer spending that could boost the economy. The savings to families from low-cost gasoline are high because the average household buys around 1,200 gallons in fuel a year.
Those who do use Uber could soon have a new payment option. Tech Crunch reported that Braintree, a mobile payment service owned by eBay Inc. (NASDAQ: EBAY), is planning to start accepting the controversial electronic currency, or e-currency Bitcoin, with the help of a company called Coinbase. Among other things, Braintree processes payments for Uber. It looks like life might just about get cheaper and easier for at least some of us.