Navy Federal Credit Union has released an update to its Cost of Car Ownership (COCO) Index, which provides insights into the costs associated with owning a car. This index helps consumers make informed decisions regarding purchasing, financing, and maintaining vehicles. The COCO Index tracks 11 components related to auto ownership costs across the United States.
The latest data shows a 1.05% decrease in the COCO Index from May to August, bringing it down to 137.6 points. This change occurred despite a 0.29% rise in overall inflation during the same period. Although automotive costs have seen a slight decline since May, they remain significantly higher than in January 2020, showing a 38% increase from the baseline.
Several factors are influencing these changes in automotive costs:
- Gasoline and vehicle prices have decreased.
- Insurance premiums continue to rise rapidly.
- Maintenance and repair cost inflation is slowing down.
"We're in a good news, bad news situation right now with costs," said Robert Frick, corporate economist at Navy Federal Credit Union. He noted that while used car prices are falling, insurance expenses are climbing steadily.
Frick advises potential car buyers to consider insurance costs when choosing a vehicle model as these can vary widely even within the same class of vehicles like sedans or SUVs. "The savings from an even slightly lower insurance premium can grow into the thousands over the life of a car," he added.
Joe Pendergast, vice president of consumer lending at Navy Federal Credit Union, suggested researching annual ownership costs for different vehicles and considering certified used cars as an alternative to new ones due to benefits such as free maintenance programs and roadside assistance. He also recommended getting pre-approved for loans before visiting dealerships.
Since its inception in 2020 with a baseline score of 100 points, the COCO Index has increased by 38%, whereas the Consumer Price Index rose by only 21% during this time frame.
The COCO Index uses data from various sources including vehicle sales prices and Bureau of Labor Statistics information on gasoline and insurance fees. Navy Federal plans quarterly updates for this index with the next release expected in early Q1 2025.
Navy Federal Credit Union was founded in 1933 and now serves over 14 million members worldwide as one of the largest credit unions globally with more than $200 billion worth assets under management according its website navyfederal.org