Car dependency has become deeply ingrained in American society, stemming from infrastructure and transportation planning that prioritizes cars above all else. The construction of the interstate highway system after World War II, combined with zoning regulations like mandatory parking requirements, has shaped an environment where most Americans rely on cars to get around. Despite the need for alternatives, the lack of pedestrian infrastructure, bike lanes, and reliable mass transit has led to an overwhelming dependence on personal vehicles. With this car-centered approach to transportation, not only has car ownership become ubiquitous, but it has also become a growing household expense.
Car ownership is considered a crucial factor for achieving upward mobility in the U.S. With 91.7% of American households owning at least one car by 2021, the vehicle has become a central element in people’s ability to access job opportunities, healthcare, and education. Low-income families, in particular, benefit from having a car, as it provides access to better employment opportunities and essential services. Studies have shown that families receiving housing vouchers and owning a car fare better economically than those relying on public transit, which is often inadequate and unreliable.
Financial Burdens of Car Dependency
Car ownership places a significant financial burden on American households, especially among lower-income groups. Transportation costs are typically the second-largest household expenditure, with Americans spending an average of $10,961 annually on transportation in 2021. For lower-income households, this expense can take up a disproportionate share of their budget, sometimes exceeding 25%. As car prices rise, both new and used cars have become significantly more expensive. The cost of new vehicles has surged by 33% in the past five years, and the price of used cars has increased by 50% since 2020, placing an even greater strain on households already struggling with high transportation costs.
In addition to the high purchase price, car ownership comes with a range of rising costs, such as gas, maintenance, repairs, and insurance. Auto insurance premiums have increased by 14% in 2022, pushing the average cost to around $2,000 per year. Car loans are also becoming more expensive, with monthly payments for new cars climbing to $730 by mid-2023. Rising interest rates and car prices have made it increasingly difficult for consumers to afford new vehicles, contributing to the growing auto debt, which reached $1.56 trillion in early 2023. As car ownership costs increase, fewer people are purchasing new cars, with new car sales dropping significantly from pre-pandemic levels.
Racial and Economic Inequities in the Auto Market
Car ownership and related costs disproportionately affect marginalized communities, with people of color facing systemic racism and discrimination in the auto market. People living in majority-minority neighborhoods often face higher insurance premiums—sometimes as much as 30% more—compared to those in predominantly white areas. Black and Hispanic applicants also experience higher rates of loan denial and higher interest rates, even when their credit scores and incomes are similar to white applicants. Predatory lending practices further exacerbate these inequities, particularly for low-income individuals with poor credit, with some lenders charging exorbitant interest rates as high as 300% for “risky” borrowers.
The growing costs and inequities of car dependency highlight the need for alternatives that can reduce reliance on personal vehicles. Electric vehicles (EVs) present a viable option for cutting down on fuel and maintenance costs, with tax credits helping to make EVs more affordable. Access to mass transit also plays a critical role in reducing car dependency, with households in transit-rich areas saving up to $10,000 annually by driving less.
Some cities are even making transit fare-free, removing financial barriers for low-income residents. Additionally, microtransit services and e-bikes provide affordable and sustainable transportation alternatives. Urban planning that supports multimodal transportation options—such as walking, biking, public transit, and ridesharing—can create more accessible, cost-effective, and environmentally friendly transportation systems.