Navy Federal Credit Union has introduced the Cost of Car Ownership (COCO) Index, a tool designed to help consumers evaluate auto ownership costs and make informed decisions regarding buying, financing, and maintenance. The COCO Index measures 11 components of auto ownership costs and tracks changes over time to provide a comprehensive view of trends in the United States.

The introduction of this index comes in response to increasing auto ownership costs that are impacting transportation budgets nationwide. Rising prices for new and used cars, along with soaring insurance and repair costs, have exceeded inflation rates.

Robert Frick, corporate economist at Navy Federal, stated, "At Navy Federal, we’re committed to giving our members the information they need to make informed decisions about major financial challenges." He noted that the COCO Index could assist consumers in minimizing auto ownership costs by highlighting current market conditions such as an excess inventory of late model, low-mileage used vehicles.

The COCO Index utilizes data from the Bureau of Labor Statistics with January 2020 prices as its baseline. This date was chosen to capture cost increases since the COVID recession caused by supply chain disruptions.

Joe Pendergast, vice president of consumer lending at Navy Federal, explained that "the automotive industry has seen major changes in the last few years—from supply chain disruptions and inventory shortages to increased labor costs and new patterns in buying behavior." He emphasized that the index provides insights for consumers navigating these changes.

Since 2020, the COCO Index has shown a 39% increase in car ownership costs compared to a 21% rise in the Consumer Price Index. Key contributors include repairs and insurance premiums followed by vehicle prices and gasoline.

Navy Federal anticipates continued rises in insurance prices albeit at a slower pace than before. Maintenance and repair expenses are also expected to grow due to increasing parts and labor costs. While new car prices decline slowly, used car prices are dropping more rapidly.

Gasoline remains volatile with significant price fluctuations expected through peak summer driving season. The COCO Index will be updated quarterly with the next release scheduled for early Q4 2024.

For further details on Navy Federal’s resources related to auto buying and lending, visit navyfederal.org.