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VIENNA, VA (October 24, 2024) – Navy Federal Credit Union today updated its Cost of Car Ownership (COCO) Index, which consumers can use to quickly evaluate the costs of auto ownership and make better decisions on buying, financing, and maintenance. The COCO Index tracks 11 components of auto ownership costs to build a complete picture of auto cost trends in the United States. 

The COCO Index fell 1.05% to 137.6 points from May to August, while overall inflation rose 0.29% in the same period. Automotive costs have fallen slightly since the initial data release in May, but they remain 38% higher than the Index baseline in January 2020. Some of the biggest factors influencing this change are:

  • Gas and new/used vehicle prices have fallen, which is offsetting the rapid rise in insurance premiums.
  • The rate of inflation for maintenance and repair costs is slowing, and prices are leveling off.

“We’re in a good news, bad news situation right now with costs,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Used car prices continue to fall, and the days of high-priced, old-model cars with high mileage are fading away. The problem now is that insurance costs continue to rise, and while repair costs show signs of leveling off, they’re still high.”

Frick recommends potential car buyers weigh insurance costs before buying, a new step for most consumers. Internet searches and online pricing resources will show a wide range of insurance premiums for different models in the same vehicle class, such as sedans, SUVs, and trucks. 

Consumers should evaluate less expensive insurance costs in the same class of vehicles they are considering, as even marginal savings each year can make a big difference. “The savings from an even slightly lower insurance premium can grow into the thousands over the life of a car,” said Frick. “Additionally, maintenance costs tend to mirror insurance costs, so this can help you save on repairs.”

The COCO Index is a response to the rapidly rising costs of auto ownership, which are causing an unprecedented burden on budgets for American consumers. Buyers need to beware of higher ownership costs to avoid buying a vehicle they cannot afford or that will be too costly to maintain.

Joe Pendergast, vice president of consumer lending at Navy Federal Credit Union, said, “You can help best prepare your budget and combat the rising cost of car ownership by researching different vehicles’ annual ownership costs and carefully selecting your auto insurance so that you are adequately covered. Also, rather than buying a higher-priced new car, you may want to consider a Certified Used vehicle, which has many of the benefits of a new car purchase, such as free maintenance programs, road-side assistance, and complimentary car washes. Further, getting pre-approved for a car loan gives you an edge because before you even visit a dealer, you’ll know how much you can finance, your estimated interest rate, how long you'll have to pay back the loan, and an estimate of your monthly payment. With a pre-approval, you become a cash buyer which comes with more power to negotiate price versus payments.”

Since 2020, the COCO Index has indicated a 38% increase (100 to 137.6 points) in the total cost of owning a car over the last four years. In that same time period, the Consumer Price Index only rose by 21%.

The methodology of the COCO Index tracks the price of new and used vehicle sales, gasoline, maintenance, insurance and various fees. Data comes from the Bureau of Labor Statistics with prices from January 2020 serving as the COCO Index baseline. This baseline date was selected so the COCO Index could capture the soaring costs of auto ownership during and since the COVID recession. The full breakdown of component price increases and how they affect the COCO Index is below.

Navy Federal will update the COCO Index quarterly, with the next release scheduled for publication in early Q1 2025. To learn more about Navy Federal’s auto buying and lending resources, visit navyfederal.org.

Navy Federal Credit Union: Established in 1933 with only 7 members, Navy Federal now has the distinct honor of serving 14 million members globally and is the world’s largest credit union. As a member-owned and not-for-profit organization, Navy Federal always puts the financial needs of its members first. Membership is open to all Department of Defense and Coast Guard Active Duty, Veterans, civilian and contractor personnel, and their families. Navy Federal employs a workforce of 24,000 and has a global network of 360 branches. For more information about Navy Federal Credit Union, visit navyfederal.org. Federally insured by NCUA. Equal Opportunity Employer. Equal Housing Lender.