It’s a historically difficult time to buy a car in the United States. Per the Federal Reserve, 14% of people who applied for a car loan in June were denied. It’s also getting more expensive to keep a car once you’ve got your hands on one: The average monthly payment for new vehicles was a record $725 the first quarter of 2023, 11.5% higher than the same time last year. 

But even though affordability keeps declining, most Americans will go to great lengths to get access to a vehicle. 

“You can’t afford to have one, and you kind of can’t afford not to have one at the same time,” said Marin Cogan, a senior correspondent at Vox. “That problem is only getting worse.” 

“Marketplace” host Kai Ryssdal talked to Cogan about her deep-dive look at how having a car can transform a person’s life — especially if they’re low-income. The following is an edited transcript of their conversation. 

Kai Ryssdal: Would you, just for those who have put car prices out of their minds these past couple of years, remind us where we are and how expensive cars are now?

Marin Cogan: Cars have gotten really expensive over the last few years. A new car cost about $48,000 on average in May of this year. That’s roughly 25% more than they cost in May 2020. Now, this is partly because of the microchip shortage and auto manufacturers really using those limited resources on luxury vehicles, which will turn more profit. So consumers, because they’ve gotten so expensive, have increasingly turned to the used car market, and that’s driven up those prices even more. Between roughly the same time period of May 2020 to May 2023, the price of an average used car rose about 50%. And then there’s all the associated costs of car ownership, which have been going up too, especially insurance rates.

Ryssdal: OK, so now that we’ve got the nuts and bolts out of the way — if you’ll pardon the mechanically related pun there — would you tell me how you came to this story?

Cogan: Yeah. I got really into the issues of cars and car safety during the pandemic because pedestrian fatalities were rising during that time. I was also walking and biking a lot more, so I became really interested in the subject. And then a colleague said to me, “You should look at this one study about the economic burdens of car ownership.” And when I first looked at it, it was sort of challenging because for most of us, it’s so obvious that a car is necessary for most Americans to get around. Unless you’re living in a truly transit-rich urban center, most of us just need a car. So I read the study, and I thought, well, that’s kind of obvious, but actually, there’s a lot of interesting data here. Can I write something that illuminates the actual burdens that car ownership and car dependency place on people, particularly low-income people? So that’s how I got interested.

Ryssdal: Well, and so tell me about the lead woman in your piece and what having a car means to her.

Cogan: Yeah, absolutely. So Shala Waines is a small-business owner and a single mom. She lives in San Diego, California. She lost her mother at a very young age, and she tried to build a life for herself on her own. She had two young kids, and she moved to California to try to reconnect with her biological father and start building a life where she could work for herself and start her business, which she always dreamed of having. And during that time, she really struggled because she didn’t actually end up having any family support or help. She fell behind on car payments, and she had some cars repossessed from her. It caused a lot of stress and strain for her because she really needed her car to get to work and to try to build some wealth and stability for her family. She eventually connected with an organization in San Diego that provides people who are low-income or have challenged credit with affordable cars and affordable auto loans, and they can use those to help build their credit. She got a car and she used it to really build her business. She considers herself working towards the middle class, but she says the car is everything. “The car is how I build the business. That’s how I get my daughter to school.” Without the car, she said, she would be homeless.

Ryssdal: We’ll get to the homeless thing in a minute, right, because you do actually write about cars becoming shelters. But here’s the paradox that I want to address. Cars are fundamentally essential to be able to work in this economy — unless you live in New York City or some other really transit-rich place, you’ve got to have a car to be able to get to work. And yet, cars are increasingly unaffordable, whether it’s the car itself or all the peripherals.

Cogan: That’s right. So, the paradox is that you can’t afford to have one and you kind of can’t afford not to have one at the same time. And that problem is only getting worse. And there’s no real central policy effort to try to address that problem. Now, obviously, building more mass transit is a great long-term solution because if we build more sustainable, affordable options, then people don’t necessarily need cars. But there’s this growing body of research that shows that what low-income and working-class people often need in the moment is a car and that they can use that car to help build their lives, especially working-class moms.

Ryssdal: I don’t want to lean into the whole, you know, “lifting all boats” thing, but does a car help other people than just the car owner?

Cogan: Well, this is where we get into the really interesting research about working-class moms in particular. A car can actually benefit the whole family. So there was a really interesting study done by the Urban Institute on recipients of housing vouchers, and they found that people who had cars fare better on multiple different factors than people who didn’t. They tended to move to higher-opportunity neighborhoods, places with lower poverty rates. They were twice as likely to find a job and four times more likely to remain employed. And then for the moms in particular, they used that to build up their whole family and get their kids to school, get their kids to medical care and other family members to medical care, get better-quality groceries. So the car can actually have an effect on the whole family, can improve the quality of life for the entire family just by giving one member access to a vehicle.