In the current personal finance environment, understanding the daily realities of what household budgets can withstand is dependent upon what we learn about the transportation costs of American drivers. Vehicle ownership and operation, as well as fuel costs, are fraught with nuance in today’s fast changing economy. And official tracking resources can reveal those details.
We take a closer look at where those costs are increasing the most, including repairs and insurance, gas and used car prices, and match the information with tips for how drivers can keep their transportation costs in check. This blog is complemented by insight from Navy Federal Credit Union economists on what’s causing the price hikes and how buyers can respond.
1. A New Index Is Tracking the True Cost of Car Ownership
One of the most effective ways to track these shifting costs of ownership is through the Cost of Car Ownership Index, more popularly known as the COCO Index. The COCO Index is an index created based on data published by the Bureau of Labor Statistics, with a January 2020 baseline of 100 and an 11-year look at the following components of vehicle ownership: This range of expenses gives a more comprehensive take on how expensive car ownership has gotten rather than simply looking at one component like fuel or insurance. Recently, the total cost of ownership of a vehicle has been going up at a rate that exceeds inflation in general, giving the index a handy tool to show how much it has been costing to own a vehicle.
What the COCO Index Measures:
- Built on BLS data
- January 2020 base of 100
- Tracks eleven ownership components
- Ownership costs up 40.59%
- CPI rose only 24.79%
You Might Also Like: Top 10 Best Cars for Children July 13, 2016 Vehicle ownership costs increased at a rate of 40.59 percent from January 2020 through August 2025, which was an increase of 15.8 percentage points from the Consumer Price Index, or CPI, over the same period. The CPI increased at a rate of 24.79 percent, which means that the cost of owning a vehicle is increasing at a higher rate than consumer prices in general. The difference is significant because owning a car is not simply about making the initial purchase but also about the ongoing costs that go along with owning a vehicle over time, which can be a substantial expense.
2. Wages Are Losing Ground to Car Ownership Costs
This widening gap between transportation expenses and standard cost of living adjustments highlights why driver expenditures remain a central economic focal point. While wage growth reached 31.5 percent since 2020, total ownership costs climbed nearly 48 percent over a similar timeframe. Heather Long, chief economist at Navy Federal Credit Union, provided key context on these macroeconomic trends.
Wages vs. Ownership Costs:
- Wages up 31.5% since 2020
- Ownership costs up nearly 48%
- Gap keeps widening yearly
- Index hit record high March
- Squeeze hits household budgets hard
The costs of owning a car have increased more than double the rate of inflation and wages since January 2020, she noted. “The Cost of Car Ownership Index is up nearly 48 percent, compared to just 31.5 percent since 2020,” Long said. She added, “The Cost of Car Ownership Index reached its historic peak in March, revealing just how tight a budget many Americans have at the moment.
3. Eleven Components Reveal Where Prices Are Climbing Fastest
When looking at the index, it shows how certain operational aspects feed into overall driver costs. The 11 components that are tracked in the index consist of auto repairs; auto insurance; body work; maintenance services; used autos; tires; auto accessories; new autos; gasoline; parking or other charges; and registration or licensing fees. The impact on household budgets varies by price movement and its overall weight in total ownership costs.
Price Growth by Component Since 2020:
- Repairs up 69 percent
- Insurance up 57 percent
- Body work up 37 percent
- Maintenance servicing up 34 percent
- New vehicles up just 20 percent
Data showing how each component has contributed to the inflation of prices since Jan. 2020 reveal where inflation has been largely concentrated. Used vehicles and tires are up 33 percent and 27 percent respectively and accessories are up 25 percent, nearly equal to the headline 25 percent overall CPI. Gasoline is up 12 percent, with parking and other fees up 11 percent and registration or licensing fees up 9 percent.
4. Weight Distribution Shows What Really Drives the Index
Where the price changes matter most Each index component’s share of the increase in Cost of Car Ownership explains why the changes in some costs affect the overall index more than other costs. Auto insurance is the biggest single influence on the increase in the overall Cost of Car Ownership Index at 30 percent, with gasoline at 18 percent and car repair at 15 percent. All three are a significant share of the total, but it also shows why two others – transmission and simple maintenance (such as oil changes) – only have limited influence on the overall index, as their weightings are only 4 percent and 1 percent, respectively.
Index Weight Contribution Breakdown:
- Auto insurance: 30 percent
- Gasoline: 18 percent
- Vehicle repair: 15 percent
- Used vehicles: 13 percent
- Maintenance servicing: 9 percent
New vehicle and body work increases by 6 percent, tires by 2 percent, accessories, registration and parking by only 1 percent each. The other major components of the breakdown of the index, each makes up 1 percent of the increase, as does the smallest cost, such as park, parking and registration. Therefore, one can see that although they still are part of the index, the influence of these items is much smaller compared to the major categories, such as insurance, gasoline, repairs.
5. Repair and Maintenance Costs Are the Real Shock
The high costs of regular repairs and maintenance serve as the new driving force behind car ownership. According to an analysis by Navy Federal Credit Union, the cost of car ownership in America has jumped 50% since 2020, and most of the increase is due to the rise in repair and maintenance costs, not fuel prices. Repair costs are up 70% in five years, the analysis found.
Why Repairs Are the Bigger Story:
- Ownership costs up 50% overall
- Repairs, not fuel, drive it
- Repair costs surged 70% total
- Expenses often arrive unexpectedly
- Hidden costs strain household budgets
Speaking on the burden of fixing vehicles, Long emphasized how significant ongoing maintenance expenses have become. “The rising cost of car ownership has been the big shocker of the inflation crisis,” Long told CBS News. “Repair costs can be hundreds of dollars, if not thousands of dollars,” she added, noting that “so in many ways, those are the hidden costs.”
6. Why Mechanic Visits Cost More Than Ever
Underlying the reason why many auto repair shops and body shops may have such a high fee for these specialist body work or mechanic visits is that the cost of repairs are getting more expensive. More parts and sensors are being put into new vehicles which are usually more expensive to replace if the need arises, while things in the auto industry still go through ups and downs making it trickier to get a mechanic who is both qualified and trained to do this type of technical work. The less people there are to do the work, the more a shop can charge.
Structural Reasons Repairs Cost More:
- Complex electronic parts, sensors
- Costlier replacement components
- Shortage of qualified mechanics
- Providers gain pricing flexibility
- Good mechanics set own prices
Long witnessed this trend firsthand, remarking that, “Good mechanics can really write their own price these days, and they’re doing it.” With fewer trained technicians in the trade and more technologically sophisticated vehicles on the road, many consumers are experiencing a steady rise in routine repair and service expenses on their vehicles. Vehicle owners may be paying more to service systems that are less complex than before, but the disparity between available knowledge and the growing complexity of vehicle technology is only leading to higher ownership costs for consumers.
7. Aging Vehicles Are Driving More Frequent Repairs
Older cars are not only more susceptible to maintenance as it is, but as driver behavior and fleet demographics evolve, it’s becoming an even greater aspect of the issue. Americans are maintaining and using their vehicles for longer and longer – and thus, those vehicles are eventually approaching the point at which they require more fixes and upkeep. The Transportation Department reported the average age of all U.S. passenger vehicles had reached 14.5 years in 2025 and that the continued increase in average age will only mean more maintenance needs for owners.
Fleet Age and Repair Cost Data:
- Fleet age: 14.5 years
- Americans keep cars longer
- More frequent service visits
- AAA: $1,750 repairs, five years
- Repairs jumped 11.5% to 15%
On new vehicles, the average costs of repairs during the first five years of ownership were $1,750, according to a AAA report. But the AAA study found that in addition to repair costs, the total cost of ownership and operation for new vehicles averaged $12,863 annually, or about $1,071.92 monthly. That illustrates how repair costs contribute to the overall expenses of vehicle ownership, which can become an even bigger part of owners’ budgets as their vehicles remain on the road for many more years.
8. Tariffs and Demand Are Pushing Repair Costs Even Higher
By year (single-year comparisons) repairs to a single vehicle have increased between 11.5% and 15%, driven by both repair demand and an increase in parts prices. Tariffs have also driven up parts prices by increasing the prices of essential components used to repair vehicles. Long have been consistent in reporting this looming demand for vehicle repairs, and identified two separate and distinct pressures which have been building simultaneously: an increase in the number of vehicles requiring repairs, and, higher costs to assemble the parts necessary to undertake those repairs.
What’s Fueling the Repair Spike:
- Repairs up 11.5% in year
- Rising demand for repairs
- Tariffs raise parts prices
- New cars now top $50,000
- No relief expected soon
Long explained that just over the last year, repairs have risen by 11.5 percent, driven by rising demand for repairs and some tariffs that have driven up prices for essential parts. “For the first time ever this fall, the median new vehicle price has surpassed $50,000 and it’s unlikely to get much lower anytime soon,” she added. “That means buyers will likely be paying significantly more to buy and maintain vehicles in the United States, on top of rising costs for repairs.
9. Insurance Rates Continue to Dominate Ownership Expenses
Some other costs of car ownership are still affected by price trends, such as vehicle prices and the cost of insurance through their influence on total cost of ownership. Your insurance premium is part of what you might spend to keep a vehicle while on the road. For example, the average full coverage insurance premium is currently $2,124 per year, according to Lending Tree, and the average minimum insurance premium is $816 a year. These recurring expenses can quickly rack up to a large percentage of household vehicle spending, even more so when the costs of fuel, repairs and vehicles themselves fluctuate, as in the August 2025 COCO Index.
August 2025 COCO Index Movements:
- New car prices up 0.28%
- Used car prices up 1.04%
- Gas prices up 1.91%
- Repair costs jumped 5.0%
- Full coverage averages $2,124/year
Highlights from the August 2025 COCO Index The release of the August 2025 COCO Index is demonstrating that repairs fluctuated considerably more than new or used cars over the course of a month. Repairs went up 5.0 percent, whereas new cars increased by 0.28 percent and used cars increased by 1.04 percent in the same time period. Gas prices also increased at the same time, by 1.91 percent. The results emphasize the importance of the cost of maintaining and repairing the vehicle on the total budget of a household car (though repair costs do fluctuate quicker than new vehicle purchase prices), in addition to insurance as a significant, recurring ownership expense.
10. Used Cars Are No Longer the Affordable Escape
Used car prices have experienced notable shifts, rising 33 percent since 2020 and jumping over 5 percent to 6 percent in recent year over year updates. When pandemic supply disruptions reduced new car production, buyers turned to used vehicles. As new car prices topped $50,000, drivers continued seeking pre owned alternatives or worked to maintain existing vehicles.
Used Car Market Pressure Points:
- Used prices up 33% since 2020
- Year over year jump of 5–6%
- Pandemic pushed buyers to used
- Once seen as affordable option
- Now stretching many family budgets
Kevin Wince, vice president, consumer lending servicing, projects and fraud, at Navy Federal explained that the pre owned market has remained competitive. “Used car prices have risen more than 6% over the past year alone, which is indication of how competitive the preowned market remains,” said Wince. What used to be the less expensive alternative, is increasingly putting a strain on consumer budgets.
