Over the past year, prices for used cars and trucks have jumped by 37%. New vehicles aren’t much of a bargain these days either — prices increased nearly 12% over the past year, according to the December Consumer Price Index.
Despite that, car ownership rose last month.
Across all adult age groups, baby boomers reported the highest car ownership rates last month, according to survey data of 2,200 U.S. adults published by the Morning Consult on Tuesday.
More than 90% of them said they owned a car in the monthly survey, which was conducted in the first week of December. That’s the highest ownership rate since Morning Consult began polling consumers on this in September 2020.
“Older adults tend to be more sensitive to pandemic developments, and a growing preference for private transportation over public transit could be a result of rising case counts,” said the authors of the report, John Leer, chief economist at Morning Consult, and Kayla Bruun, an economic analyst with the company.
The World Health Organization identified the omicron variant of COVID-19 as a “variant of concern” in late November, and the first case appeared in the U.S. on Dec. 1, 2021, the same week the survey was conducted.
The authors offered another explanation for the overall rise in car ownership rates last month: rising incomes.
Before the pandemic was significantly affecting the U.S., in February 2020, Americans earned $28.51 an hour on average. But last month, Americans earned nearly 10% more an hour on average ($31.31) compared to February 2020.
The rise in income is likely a product of inflation — which is at a nearly 40-year high — and the tight labor market has prompted some employers to raise wages to recruit workers.
Nevertheless, “rising incomes helped more households feel comfortable making auto payments,” Leer and Bruun wrote in the report.
