MINT HILL, NC – New data is out on current car prices and loans. Let’s take our semi-annual dive into that data and determine if it’s worth it to upgrade your ride in 2021.
The average monthly car payment in Q2 of 2020 was $568 and the average loan length is just under 72 months, according to Experian. That’s right, the average new car loan is six years. This means the average new car price floats around $40K. This isn’t surprising as the sedan is beginning to go the way of the dodo and more expensive SUVs and trucks begin to take up the market.
So what does that mean?
For starters, it means it’s very likely that keeping the car you have is cheaper from a purely financial standpoint. Add up every repair bill you had in 2020 and divide by 12. If you’re spending less than $568 a month on average, you’re ahead of the game! If you spent more than that, maybe it’s time to go car shopping.
That being said, money isn’t the only factor to take in. As any second-year accounting student could tell you, don’t forget to factor in the time value of money. You may be spending well under $568 a month maintaining your car, but is it going to the shop a lot for little things? Does that eat up your time? Is it inconvenient for you to set up appointments and visit a shop? If so, it may be time to trade in as well. Time quite literally is money in this case.