A study conducted by the University of Michigan in 2015 showed that car ownership has been declining throughout America, yet over 90 percent of households still owned a vehicle. It remains evident that owning a car plays a large part of people’s daily lives and routines. Carpooling or ridesharing are surely more popular among Millennials than with older generations, however a large amount of them are still purchasing vehicles.
Some information was given by Credit Karma in which they analyzed their users, finding that of their 45 million members, 36 percent of them were Millennials that had car loans; in other words those between 18 and 24-years old had auto loans.
Due to the difficult economy Millennials find themselves trying to survive in, and as the old junker cars and hand-me-down cars seem to fit better in their budgets, Credit Karma was interested in analyzing the most expensive places in America for Millennials to buy cars from America’s 100 largest cities.
“We did this by looking at the average outstanding auto loan balance for Credit Karma members between the ages of 18 and 34 who live in these cities and have car loans and assumed a 5.89 percent interest rate, typical for someone with an average credit score in America, and 67-month repayment term – the average loan term for a new car.”
While assuming each person drove roughly 15,098 miles per year, and getting 24.1 miles per gallon, they used a tool at Gasbuddy.com to find the current average gas prices per each major city.
They found Texas was at the top of the list for most expensive places to own a vehicle. Of the top 10 cities in America, four of them ranked as most expensive to buy a car, all being in Texas: Laredo, Corpus Christi, El Paso, and Lubbock. Following were three cities in California and two cities in Nevada; this seemed to be a cause of the higher gas prices in these states and cities. On the contrary, the cities that ranked least expensive including; Minneapolis, St. Paul, Madison, Detroit, and Cleveland (all in the Mid-west).
This was their concluding top 10 list of most expensive cities to purchase a car:
Laredo, TX, $524.30
Corpus Christi, TX, $498.71
Henderson, NV, $478.82
Anchorage, AK, $476.63
Bakersfield, CA, $475.68
El Paso, TX, $473.63
Chula Vista, CA, $463.55
Las Vegas, NV, $461.70
Riverside, CA, $454.55
Lubbock, TX, $454.34
***These numbers were taken into study and consideration in December of 2015, so there are most likely adjustments that would be made or updates if this study was performed again.