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Where the Rubber Meets the Road

Seeing your car as an investment, not an expense

June 2024

(Photo courtesy of Brandpoint Media)

story courtesy of Brandpoint Media

In these inflationary times, the cost of owning a car seems to increase daily. The price of buying a car is growing, and so is the cost of operating one. We all want personal transportation and the joy of car ownership, but the financial statistics are challenging.

The prices of new and used vehicles skyrocketed in the aftermath of the COVID-19 pandemic. According to J.D. Power, new-vehicle transaction prices shot up 13% in 2021 and then surged up another 13% in 2022. The increases moderated a bit last year, but prices haven’t yet fallen in 2024.

The prices of used vehicles have escalated even more rapidly over the last several years as consumers who couldn’t find an affordable new car have turned to the used car market. Again, the prices have moderated in 2023, but used vehicle prices are up at least 20% versus their levels in 2021.

At the same time, the cost of maintenance and replacement parts has also zoomed up. So has the hourly rate of auto repair labor. Though fuel prices have dropped from their all-time high of a couple of years ago, they are still inflated versus their pre-pandemic level. Although economic news regarding transportation costs overall is challenging, auto experts at Mercury Insurance have a suggestion that could change the way you look at these costs.

Their suggestion is to treat your vehicle as an investment, and not an expense. Rather than seeing your vehicle as a piece of equipment that needs to be replaced frequently, like a cellphone, for example, it may be smarter to treat your car as a long-term asset that you can feel comfortable owning and driving for years, saving you thousands of dollars in the long run.


Choose a vehicle appropriate for your long-term needs with the expectation that you will drive it for at least the next 10 years.

Smart shoppers will find that 2- to 3-year-old used cars, trucks, SUVs and vans are much less expensive to purchase than their equivalent new vehicles. The savings could easily reach $10,000 or more, especially for a premium-brand SUV.

Buyers who might be afraid of getting a “lemon” when they buy a used car should consider certified pre-owned vehicles. These vehicles are handpicked and meticulously inspected before being sold, and they are backed with a warranty very similar to a new-car warranty.


The key to gaining a financial advantage from viewing your car as an asset is owning it for a long time. While the average car on the road today is over 11 years old, typically, cars of that age have had several owners.

Instead, your goal should be to maintain your vehicle so it is useful to you for at least a decade. This implies preventative maintenance and, yes, some repairs over time. But while repairing a vehicle is more expensive than it used to be, it is still far cheaper than replacing the vehicle with a new car, truck or SUV.