Car Costs SKYROCKET 167% | Episode 1022

It's Nudo 1 here in Ventner City, New Jersey,

and our nation's capital, Washington, D.C.,

and this is Car Edge Live for Monday, March 2nd,

with your hosts, me, Ray, here in Ventner and Zach.

Well, sitting in a not quite living room of foyer,

I suppose we would call it.

How are you today?

He had some hells that dog bite.

It's okay, all is well here in Washington, D.C.

Thank you everyone so much for tuning in

on this Monday, March 2nd.

Today's show is brought to you by CarEdge.com,

for those of you that are unfamiliar for six years.

Now, my dad and I have been providing

with our incredible team a car buying service

that takes care of research,

dealer outreach, and even negotiation.

We learn what matters to you.

Contact car dealers, compare real offers

that help you get the best deal without the stress.

Now, dad, we also have a new product and market.

It is still in beta,

and that would be our Car Edge dealer ratings.

Now, go to caredge.com slash dealer dash ratings.

Here's an example of a dealer rating page

for a dealership in Georgia.

It'll tell you exactly what that dealers doc fee is,

how many add-ons they add to vehicles,

what the average amount they'll negotiate off

on a particular vehicle is.

And if you scroll down here,

you can view the actual negotiations

our team has had with that dealership.

For example, here on this 2024 Ford Bronco,

you can see that they negotiated $3,200 off.

They can click view quotes,

and then actually see the quotes.

Like, this is incredible, $51,160 to the final quote.

Wait for it, dad, $48,163.

We got a $3,200 discount there.

So, folks, please share feedback.

Again, this is still in beta,

but this is the Car Edge dealer ratings platform.

We're looking for your feedback

as we continue to build this out.

You ready, Pops?

I believe I am.

You know, every time you say the word beta,

I keep thinking of Sony and the Betamax, okay?

When, you know, VHS and beta were the videotape formats,

and, well, Sony's Betamax did not win.

We're starting here, folks.

Drivers pay nearly 167% more annually

than expected for vehicle ownership.

It was just, it was about, I don't know,

maybe September, yeah, September of last year, dad,

that AAA came out and said that it costs $11,577 a year.

You drive the average vehicle on the road right now.

Well, this morning, we're reporting on the latest research.

This comes from a company called Sync, Sync.

How do you say it?

That's Sync Run Synchrony?

Synchrony, come on, man.

Anyway, they're saying it actually costs 167% more

representing a $4,500 discrepancy

between perceived costs and actual costs of owning a vehicle.

Walk us through this, dad.

How the heck could owning a car actually be?

$5,400, $4,500 more expensive than AAA was reporting on.

We're talking about, on average,

it costing $15,000 a year to own and drive a vehicle.

What do you make of this?

Well, here, I'm gonna burden the world with bad news.

It's gonna get worse starting yesterday or the day before.

Okay, well, places have already spiked.

There's oil that from Iran that ain't making it

the places it was supposed to be going.

So we're gonna be paying more for gas moving forward

if we haven't already seen price increases today.

So what is it that they found out?

What people think they're going to pay

to maintain older vehicles

and what they actually end up paying

are, well, two completely different things.

What they think and what reality is don't match.

And that's what it is.

And because people are keeping vehicles longer,

well, than when it is time for that 180,000-mile vehicle

to need a repair, it's gonna need a lot of repairs.

And so the cost of keeping a vehicle

has gone up dramatically.

And then I think it's only gonna get worse moving forward.

And your hypothesis, obviously,

there is around fuel costs,

but, Dad, you're right, this survey from Synchrony.

It was essentially saying,

what do you think you're spending annually on your vehicle

versus what are you actually spending annually on your vehicle?

I can only imagine being the person who ran this survey

having to deliver the bad news.

The estimates when they ran this survey

from their constituents were $2,738 annually

being spent on their vehicle.

The actual was over $7,303,

with Gen Z spending over $10,000,

excuse me, millennials over $10,000,

and Gen Z almost at $10,000.

So this is a lot of the perception versus reality,

which is people don't realize quite how expensive it is

to maintain and own a vehicle.

Obviously, we do a lot of research here on that

and we try and provide that information,

but owning a car is very expensive

relative to what you might think.

It is, and a lot of it has to do with people

just don't want to know.

And what do I mean by that?

What's it cost to get a coffee at Starbucks?

Or when I'm in D.C. and we go to Blue Mountain

or whatever the hell that place is that you take me to?

You know, you can't...

Blue Mountain.

Whatever the name of it is, I threw a bottle.

Blue bottle.

Blue bottle, it's close.

It's almost a mountain.

But my point is that if you said to somebody,

do you realize that you're spending like $15 a day

for two cups of coffee at Starbucks

and you go, oh, that's not...

No way!

Way!

You are!

Okay?

But because it's like $6, $7 each time,

it doesn't feel like a lot, but it adds up.

And so as consumers, we don't either intentionally

or unintentionally, we don't want to know

what stuff actually costs.

We pretend to live in a fantasy land

where we don't have to know.

And so it doesn't surprise me that people would think,

yeah, I'm spending under $2,700 to have a car annually,

when in reality they're spending almost $12,000 a year

to have a car when you figure in maintenance and fuel

and tolls and gas.

The biggest debt, the biggest ones,

it's not even close, the biggest costs for owning a vehicle,

aside from depreciation, which most people don't think

about, insurance and gas.

Yes.

Without a doubt, insurance and gas, or fuel,

those are the two biggest culprits driving up

the cost of ownership.

And to your point, based on what's happening globally,

this show is certainly not about global politics,

global wars, or anything like that.

And we talk about owning and buying cars.

It's going to be more expensive for the foreseeable future

for internal combustion engine vehicles

because of what's going on globally.

So you have that plus insurance rates have skyrocketed

over the past few years.

So yeah, we're in a little setup here, Dad,

where the cost of ownership not only has skyrocketed

based on people's perception, but the reality,

it'll also probably continue to skyrocket.

The numbers from AAA obviously demonstrate that.

Well, yeah, and people just don't

realize how much more they spend than they think they do.

But if they did, if they actually budgeted,

if they actually looked at what their monthly expenses are,

you know, maybe they'd cut back a little bit.

Maybe they'd look at alternate means of transportation

so that they could save some money.

I mean...

Yeah, but...

Who are we to judge?

If people can afford it, they can afford it.

Or people think they can afford it and they can't afford it.

What's the shocking thing about this research

is that it shows the gap between perception and reality.

Most people think this also, I think,

should influence people thinking about buying

a used vehicle versus a new vehicle.

We did a video recently on the CarEdge channel,

which is a better value, new versus used.

And pretty much we're both on the camp of,

in most cases, it's gonna be the new vehicle.

If you can afford the new vehicle

versus a relatively new used vehicle,

at least you're getting the manufacturer warranty,

the fuel cost should be less

because it's gonna be more fuel efficient, et cetera, et cetera.

These older used cars, Dad,

I mean, they're gonna be racking up

a heck of an ownership bill

for a lot of these people that buy them.

Well, and the cost to repair them,

the cost of replacement parts and things like that,

those are all going up.

So there's nothing here that would indicate

that the cost of automobile ownership

is going to go down anytime soon.

You know, I am about to hit, maybe in two weeks,

about 2,000 miles on my car,

which I will have owned for 12 months

on the 24th of this month.

And the likelihood of me getting in an accident

is fairly remote because, well,

I never drive the damn thing.

But that has an impact that my insurance,

my insurance costs haven't gone down

because I drive 2,000 miles a year, okay?

My insurance premiums keep going up slightly.

Why?

Because the cost of repairing cars

when they're in accidents goes up dramatically

and that has to be passed on to everybody,

whether you've had to make a claim or not.

So I sit here and I wonder,

why, why do I do this to myself?

Why do I spend $128 a month for insurance

and $374 a month for a lease payment

to drive less than 200 miles a month?

You know, my dear friend, Luis,

he could take me around for $600 a month

and it wouldn't be an issue or $500 a month.

It wouldn't be, you know, if I said to him,

hey, here's, give me a $500 at the beginning of every month.

Just take me around when I need to go to the Acme

or Castles, wherever I need to go, you know.

I want to be clear here though.

My dad, your lived experience

is very different than most people in our audience.

That being said, we get it, right?

Like you're looking at your monthly expenses

and you're saying to yourself,

do I need to be spending this much money

on car ownership versus alternative methods

of transportation?

And I think that's what this survey highlighted this morning

is that as car ownership costs continue to increase,

which again, the primary culprits are insurance and fuel.

You're making a great point around older vehicles

and a higher cost of maintenance and repair costs there

as well, but fuel costs are about to go up significantly.

At least that's the anticipation and expectation.

And last time I checked insurance costs aren't going down.

I did put the link in the chat for our page

back on caredge.com to see if you can save some money

on insurance, but even that aside, you know,

it's not like you're going to be saving a bunch of money

every single month.

So there's a lot of people, I think scrutinizing,

spending as much money as they are owning a vehicle

versus looking for alternatives.

That being said.

Yes.

Can we switch gears?

Well, only if you insist.

We've got some very kind contributions

that I come in through the chat, Dad, from Nathaniel.

Thank you, Nathaniel.

Hey guys, I'm looking for a good lease deal

on a three-row P-HEP.

It's between the Mazda CX-90 and the Hyundai Sorrento.

Mazda wants $9,000 down.

What's your opinion, Dad?

You lease vehicles, you are a car salesperson

and sales manager for four decades.

Give Nathaniel the rundown.

Don't put money down.

The only reason they ask for $9,000 down

is to make the payment seem more affordable.

All you're doing by putting that $9,000 down

is you're reducing the purchase price

of that vehicle to the leasing company.

Take that $9,000, put it in a separate savings account

and draw off it to pay the difference

between what the payment would have been

with $9,000 down and what the payment is without it.

And remember, for every $1,000 on a three-year lease,

it's about $30 a month.

So if you don't put $9,000 down,

it's going to increase the payment approximately $270,

put that $9,000 in the savings account,

take $270 out every month from that account

to help pay your lease payment.

And if I may, everybody knows,

at least I believe everybody knows,

I am a pretty big fan of Mazda.

I think they make a pretty decent vehicle.

I think it's better than decent.

And it's got a lot of bang for the buck,

but I will say having ridden in a CX-90P have

that that vehicle was not a particularly nice vehicle

at all as far as ride, as far as quietness.

My CX-30 rides nicer than that CX-90P have did.

So I wouldn't necessarily push in the direction

of the Hyundai Sarento, but in my opinion,

that if you're looking for a Pheave,

that would probably be a better vehicle

than that Mazda CX-90.

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If I may, I'm also gonna pull up here.

We have a great guide back on CarEdge.com,

how to negotiate a car lease, a simple guide

to saving money.

My dad and Justin on our team wrote this a while back.

All you gotta do is Google search, CarEdge,

lease negotiation, excuse me.

We also have some videos here as well.

All the step-by-steps that you need to know

about negotiating a car lease are right there.

Dad, we have another kind of contribution here.

This one from Mark.

Thanks for this.

RoboTaxi's eliminate insurance costs.

EVs lower fuel costs, EVs lower maintenance costs,

and EVs prices are falling.

Enjoy the pricing party while it lasts.

So this is an interesting,

I don't know about eliminating insurance costs,

if you have RoboTaxi,

someone's still gonna have to insure that.

Somebody's paying for it.

And ultimately, whoever's paying it,

ultimately that's going to get factored into the price

of the ride.

It's not like the ride's five bucks.

Oh, and from that, whatever the cost of insurance,

no, it's all factored in.

But I do, Dad, I do think,

go to San Francisco in the next year

and you're gonna see as many Waymo's

as normal cars on the roads.

It's crazy.

Here in Washington, DC, we have Waymo's on the roads

with human drivers and then still,

but obviously the plan is to not have the human drivers.

EVs, we know have lower cost of ownership

in terms of maintenance and fuel.

And obviously we have a glut of used EVs

that are driving down the cost to purchase a used EV.

So yeah, I think Mark makes a ton of great points here.

The costs of car ownership have skyrocketed significantly,

but it's pretty nuanced when you start to look at

different types of vehicles, different powertrains,

and then also when you project the sound of the future,

there's some reason to be hopeful

that car ownership and car costs in general will go down.

Yeah, you know, I think the future realistically

will be things like Waymo and Robo Taxis and things.

And the reason for it is because people won't be able

to afford to buy.

Though those who are very wealthy will be able

and will continue to buy new cars.

The rest of us will no longer be buying new cars,

and in many cases might not even be buying used cars,

and finding ourselves relying on Robo Taxis

and things of that nature.

Now the only problem with that is those type of transportation

alternatives will only be available

in large metropolitan areas.

If you live in the middle of nowhere, okay,

there's not gonna be a Robo Taxi for you.

There isn't gonna be a Waymo for you.

So there'll be some parts of the country,

rural areas of the country that will still need,

people will still need affordable means of transportation.

But those in large metropolitan areas,

yeah, I can see like, why would people need to buy a car?

Why would people need to own a car

when there's all these Robo Taxis and Waymo mobiles

that can take you wherever it is you need to go,

and the maintenance is on them, the fuel cost is on them,

the insurance costs are on them,

and you know, and then maybe that way

you can still afford your two cups of Starbucks a day,

I don't know.

It certainly seems like there are some big corporations

that are trying to push this.

Now, this is not the first time we've seen, for example,

automakers as well as independent third party companies

trying to push car subscriptions, for example,

and those failed miserably.

Every manufacturer-

I don't know why, you know, honestly, I don't know why.

That to me made so much sense.

And to be clear here, car subscriptions were just like

bundled leases with all your payments factored,

but hey, people like owning vehicles, dad,

that seems to be a theme,

and the point of today's show is to simply document

and memorialize the fact that it costs a little bit more

than you might have thought to own that vehicle.

We've got here from art photographer,

thanks for this, we appreciate it.

Does the research break down the cost

by things like insurance went up this much,

maintenance went up by this much,

the initial cost of the car, et cetera,

areas make a difference, California is more expensive

on gas, for example.

No, this survey, it was pretty broad-based.

They did have a little bit of a breakdown.

So for example, I can pull this up here,

where there's the biggest discrepancy

between what someone thought and what was reality,

so you can see here.

You've got the cost, when examining what factors

are driving these rising costs,

some of the significant expenses were gas and insurance,

which cost drivers, excuse me, on average,

about $2,000 and $1,700 respectively each year.

Other top expenses include maintenance, service and repairs,

tires, auto parts, and accessories.

It gives you some data points here, but nothing too granular.

We know, obviously, Dad, to Art Photographer's point,

different states are gonna have different insurance rates,

different states, fuel costs,

but definitely this is gonna be nuanced.

Oh, absolutely.

I mean, it depends, you know, let's face it,

I mean, some states are less expensive

to live in than others.

And so if you want the absolute least expensive costs

for the state to live in, then they're out there.

You can go find that state and you can go live in it.

You might not like all the educational opportunities

that that state might offer,

or all the childcare opportunities, whatever it may be,

but you know, it's like anything in life,

you get what you pay for, okay?

The least amount that you're paying,

well, you're getting the least for it.

And then so, yeah, it's regionalized, it's...

Yeah, but Dad, I just want to comment really quickly,

because I don't know if I agree with the path

you were going down there.

If you were equating insurance costs

with quality of education and childcare,

that doesn't resonate with me at all.

I just want to be very clear here.

Insurance rates vary based on all sorts of nuance and factors.

It's not like taxes or things like that.

I just want to make sure.

Did you mean what you said?

Yeah, I meant what I said.

I meant what I said because typically,

typically the states that are the most expensive to live in,

okay, have the most goods and services available

for their residents, okay?

And those goods and services

will include childcare and education.

The cost of that insurance costs, Dad.

I'm not talking about like taxes.

It's all related.

That's the point.

All of that is related.

And so, okay, but let's discuss something else

because we're not going to agree on this.

So rather than belabor the point,

take me down a different highway here, buddy.

Now, we're sticking on this highway, folks.

We're going to find the most and least expensive states

to insure a car.

Give you a second here.

All right, we're on the always trusted US News

and World Reports.

Lowest annual insurance rates,

Maine, Vermont, Wyoming, Hawaii, Idaho,

Ohio, New Hampshire, Indiana, Alaska, Wisconsin.

I don't know.

Car insurance rates by state.

Whatever.

There could be a time I'm wrong.

This might be the time, Zach.

I'm just saying it's all interrelated.

Whether you want to accept the fact

that it's interrelated or not is entirely up to you.

That's all.

All right.

All right, we'll switch gears here, Dad.

Why don't we head to a very interesting story

coming by way of Honda.

You ready for this?

Yes, I found this to be extremely interesting.

This is so fascinating.

Honda introducing Acura to Japan

with plan to reverse import US-made integrals and passports.

What does Honda do it, Dad?

Reverse importing to Japan?

Yes, and here's the interesting thing

that most people don't realize.

Acura is only available in North America.

It is not a brand that Honda sells in Europe or elsewhere.

It's just North America.

And so the fact that they're going to import

the new Integra Type S into Japan

with a left-hand drive instead of right-hand drive

is to try and take advantage of some of the trade imbalances.

It shows goodwill and it shows that there's a way

to positively impact some of the tariff and exchange rates

that are going on in the world at the moment.

And so even Toyota and Nissan are starting to look at ways

to produce some of the vehicles here in the United States

and ship them back to the home market in Japan.

And one of the reasons they can do this is Japan has relaxed

some of their standards as to the noise of the vehicle

and the safety constraints that they have.

And obviously, that being left-hand drive

instead of right-hand drive.

And the fact of the matter is that they only anticipate

that this might amount to 5,000 to 6,000 sales annually.

But it's just a way to help cover the costs of what it is

to import and export vehicles today.

Kind of a crazy moment.

I mean, to see a Japanese automaker reverse import vehicles

to their home country is an indictment on how crazy I

think the car market has become, both in the sense

of globally with all that.

But this is just kind of bonkers.

It makes more financial sense for them to reverse import

from the United States, and it does to do things domestically.

Yes.

And it is especially for the Acura brand.

Most people don't realize it, like when Acura came out

and they had the legend.

OK, well, they had the legend in Japan, too.

It was just Honda.

In Japan, it wasn't an Acura.

The only market was North America for Acura.

And so this is a way for, I guess, Acura or Honda

to show some of the more upscale vehicles.

The RL, when Acura still had the RL,

that was actually sold as a Honda legend in Japan.

So it's just, to me, it's an interesting concept

to take a brand that was only available here in North America.

And bring it to their home country.

And my guess is that there's not a whole lot of people

asking for, although, you know, an Integra Type-S,

which is 320 horsepower four cylinder engine, six speed manual.

We got to get you one of those.

We do, we do.

You know, it's a very desirable vehicle in this country.

But I'm sure there are people in Japan that would love to have it.

I have no idea what it was, what it would cost there.

But it'll be interesting to see what happens.

And then what is the passport there off-road vehicle?

It'll be interesting.

Yeah.

When I read that headline, I was like, really?

Like, we're at this phase of globalization,

where it makes more sense for a domestic,

a Japanese domestic automaker to reverse imported vehicles.

And the answer to that question is, yes,

we are at that phase of globalization.

Apparently we are.

We've made it to the phase where it doesn't really make sense as a headline.

But then when you, when you dig in, obviously this got greenlit

because you know what it does for Honda, helps make more money.

Dad.

Yes.

Let's turn our attention to this comment from K. Deuce.

Who's the best Ford dealership in Texas?

All right, y'all, again, this is a brand new, still in beta,

but it's pretty, it's getting pretty tight here.

CarEdge.com slash dealer ratings.

So for those of you that are unfamiliar,

if you go to just CarEdge.com, you can click on research right here,

and then click on dealer ratings.

Ah.

Dealer ratings right there.

Okay.

On this page, you can do a couple of things.

One is under dealers, you can browse by brand.

That would be able to get us to just, what was it, Ford, Dad?

Ford, yes.

Okay, so I'm going to do that, and then I'm going to click on Ford.

Yes.

Now, on the Ford page, this is going to show me all the Ford dealers

and all the land, but I think, did I make it?

Let's see.

No, okay.

So those are all the Ford dealers and all the land,

and you can just come here and you can search for the state initial.

So you can actually see that Stanley Ford of Eastland

is number one in there in Texas.

I think, let me try this, the View Ford Report Card.

Ford dealers list.

There was somewhere, oh, Ford dealers by state, here you go.

Yep, so it's on the brand report card.

You can then find Ford dealers by state, and you've got it here.

My guess is that they have more than 84.

No, of course, of course, yeah.

And so, just to explain this a little bit, these are the 84

that we have received details for price quotes from.

Yes, yes.

So as we receive more price quotes from more dealers,

then the list of dealers will continue to grow.

Exactly, 100%.

And obviously, to be clear here, this is all super data driven.

This is not objective, excuse me, not a subjective.

It's objective, and so you can see here all the data that we're collecting.

But yeah, so anyway, it's under, I guess it's under reports,

brand report cards, and then Ford.

And then you can come down here and you can do Ford dealers by state.

So there you go.

Or you can just Google all that.

I'm sure it'll pop right up.

So anyway, you want to know the best dealer in a certain area.

I'm popping out link in the chat.

So much good information here, so much good information.

So please, I'm glad that someone asked that question.

This is how you can start to access it.

Definitely some work to be done to make this even easier to use,

but encourage everyone to check it out.

And yeah, it is powered by the 51,666 dealer outreach sessions

that we've had since July of last year.

So thank you to everyone who supports CarEdge.

That allows us to capture this data and make it available to you for free.

Help me buy a car.

I like it.

I like it too.

All right, Pops, let's call it a show.

We're back here tomorrow with more CarEdge Live.

If you enjoyed today's show, please follow us.

Give us a what is it, a subscribe here on the YouTube.

Give us a thumbs up, a like, a subscribe, tell a friend,

tell a friend to tell a friend.

Oh, yeah.

Yeah.

And and even tell an enemy.

Tell an enemy.

Tell all the enemies to tune in.

We appreciate it.

We're back here tomorrow.

Folks with more CarEdge Live, 12 p.m.

Eastern, 9 a.m. Pacific Dad.

Enjoy the afternoon.

We'll see you all back here then.

Thanks, everybody.

We'll see you tomorrow.

Car Costs SKYROCKET 167% | Episode 1022

About this episode

dealer fees

add-ons

Ford Bronco

cost of vehicle ownership

insurance

depreciation

fuel

used vehicle

new vehicle

manufacturer warranty

ownership costs

maintenance and repair costs

lease deal

Mazda Cx90

Kia Sorento

Mazda Cx30

PHEV

lease negotiation

EVs

RoboTaxi

Waymo

used EV market

bundled leases

reverse import

Acura Integra

left-hand drive

exchange rates

tariff

production in the United States for export

Acura Legend

dealer ratings

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