When deciding what vehicle to buy, it’s not uncommon for consumers to ask their auto lender what they can reasonably afford. But while helping members with that question, the folks at Navy Federal Credit Union made a surprising discovery: The car’s price alone wasn’t enough to provide the best answer.
“We’re always looking for ways to help our members make smart, informed financial decisions, especially with big-ticket items like vehicles,” said Kevin Wince, vice president of consumer lending servicing, projects and risk at Navy Federal Credit Union. “Car ownership isn’t just about the sticker price. It’s insurance, gas, repairs, and more.”
So Navy Federal developed a data-based resource called the Cost of Car Ownership Index, or COCO Index. It can help car buyers assess the costs of car ownership.
“It’s the kind of tool that’s especially valuable when every dollar counts,” Wince said. “It gives our members the confidence to make choices that fit their lives and budgets — not just today, but over the long haul.”
How the COCO Index reveals true car ownership costs
Comparing vehicle prices isn’t as simple as choosing a cheap used car over a pricey new one. After all, if you end up spending as much on repairs and insurance for the old car as you might have saved over the life of a new one, the used car might cost more in the long run.
“It’s a big myth that the monthly payment tells the whole story,” Wince said. “Another common misunderstanding is that buying new is always more expensive. Used car prices are getting back to normal, so a newer used car could be a smart buy.”
The COCO Index, which launched in 2024, has already revealed some surprising results. Auto ownership costs have gone up more than 39% since 2020, according to the latest data, compared to overall inflation rising by just 24% during that same period.
Wince was particularly surprised by how high insurance premiums have climbed: 57%, which is faster than almost any other tracked category.
“That’s why we recommend consumers look at insurance costs upfront as part of their car-buying research,” Wince said. “This can save customers thousands of dollars over the life of the vehicle.”
These are the 11 costs of car ownership that contribute to the COCO Index:
Motor vehicle repair: Trends in the cost of repairs that go beyond routine maintenance.Motor vehicle insurance: The cost of comprehensive auto insurance premiums.Motor vehicle body work: Prices for repairing dents, scratches, and other cosmetic issues.Used cars and trucks: The average purchase price for used vehicles, which can change due to new car supply shortages and other factors. Gasoline (all types): Fuel types, which change regularly due to market factors.Motor vehicle maintenance and servicing: Regular maintenance like oil changes.Tires: Cost to purchase new tires.Vehicle accessories other than tires: Cost of upgrades like floor mats and roof racks.New vehicles: Average purchase price of new cars.Parking and other fees: Expenses related to parking, tolls, and other vehicle-use costs.State motor vehicle registration and license fees: Fees mandated by state law.
How to use the COCO Index when car shopping
The COCO Index could help a shopper decide which vehicle type to buy, based on the trends in certain car ownership costs. For example, if a car shopper is considering a new vehicle over a used one, the fact that used vehicle prices have gone up more quickly than new car prices might be valuable information to consider. Also, equipped with the knowledge that there has been a rapid rise in insurance premiums, buyers may be encouraged call their insurer to ask for quotes for different car models.
“We’d love to see the COCO Index become the go-to source for car ownership cost trends, something consumers check like they would for mortgage rates or inflation reports,” Wince said. “Our goal is for the Index to be a trusted benchmark, helping drivers make better decisions and navigate a constantly changing auto landscape.”
The COCO Index can work alongside other Navy Federal resources, such as auto calculators, and lease versus buying information, to help members arrive at informed car buying decisions.
“We’re not just here to help you get the keys,” Wince said. “We’re here to help you keep driving forward, wisely, and affordably.”
Get a clearer picture of what your next car will really cost.
This post was created by Insider Studios with Navy Federal Credit Union.
