This graphic from gobankingrates.com shows the least expensive and most expensive states to own a car. (gobankingrates.com)
NH leads nation in car affordability
By KEVIN LANDRIGAN
New Hampshire Union Leader
— It’s cheaper by far to own and operate a car in New Hampshire than anywhere else in the nation, according to a new national survey
And it’s most expensive in Michigan, the birth state of the American auto industry, says GoBankingRates, a national website that does market research on financial services and related fields.
The three-year cost to own an average car here is $9,021 which is $1,067 less than in North Carolina, the second most affordable state.
“I’m pleasantly surprised but not shocked to be honest with you,” said State Sen. Dan Innis, chairman of the state Senate Commerce Committee that deals with all insurance and financial services legislation.
“I think we’ve built as a state the culture of being an affordable place for car ownership despite our rugged climate,” he said.
This survey looked at costs after buying a $35,000 vehicle that weighs 3,000 pounds, factoring in expenses for gas, repairs, auto insurance, registration/title fees and taxes.
“I think it’s really a combination of factors that ends up putting us up on top. There’s our annual inspections, the Yankee frugality of our people who work at keeping cars in better shape and of course, affordable insurance rates,” said Peter McNamara, president of the New Hampshire Auto Dealers Association.
“As a practical matter, these three work together to keep ownership costs down.”
That’s obviously the good news but in the past year alone, these costs in New Hampshire have gone up by $1,000.
Most of that increase was tied to higher gas prices but a growing number of car and truck accident claims played a part too, a phenomenon that has swept the entire nation according to the Insurance Information Institute.
The number of U.S. crashes in 2015 rose 7.2 percent, the highest increase in half a century, according to the insurance clearinghouse.
Meanwhile, the costs of auto repairs nationally have risen too as more technology in that vehicle can translate to more sticker shock, industry officials have said.
“There’s no question distracted driving and cellphone use is leading to more and more accidents and the severity of repairs has gone up,” said Paul Holloway, president of the Holloway Automotive Group of dealership.
“We take pride in advocating for consumers against manufacturers who will tell us that a repair isn’t covered under warranty.”
Here’s how New Hampshire stacked up in the major categories:
• Auto Insurance: $941 per year, fifth lowest in the U.S.; Maine was lowest in the nation, Michigan highest with an average bill of $2,738. New Hampshire does not mandate automobile insurance coverage and it’s a fault state, meaning rates are raised for those who cause accident claims;
• Repairs: $389 annually, 22nd lowest in the US; Maine was fifth lowest and the U.S. average was $387 and,
• Taxes: $0, New Hampshire is one of only four states that does not levy a sales tax on car sales.
“That’s a big, one-time item even when it’s spread out over three years,” Innis said. “I think we also do a pretty good job of keeping the other fees as low as possible.”
One New Hampshire consumer hit omitted from this survey was the municipal registration fee paid every year.
For a new, 3,000-lb. vehicle, that local fee in Concord is $540 annually. Even adding the fee into this survey, New Hampshire would still come out on top.
Most don’t have a local registration fee statewide, but a car excise tax does exist in many large cities, McNamara said.
“They probably decided to back this out of the survey because it’s hard to make an apples to apples comparison,” McNamara said.
New Hampshire is one of only nine states in the country that subjects all vehicles to annual safety inspections.
Andy Crews, CEO of Auto Fair, said these reveal minor repairs such as brake pads or worn tires that if fixed can prevent much costlier problems down the road.
“This is why we testify so strongly against doing away with the annual inspections,” Crews said. “Time and again they prove that preventive maintenance works and is so much cheaper in the long run.”
In 2013, the most recent year available, 17 percent or nearly 257,000 vehicle owners in New Hampshire failed; the most common causes for failure were brakes (5 percent), steering (5 percent) and tires (4 percent).
This plays into keeping automobile insurance rates low since an inspected vehicle is less likely to cause an accident, McNamara said.
“I do know that our relatively low rate of auto thefts also plays a part too in our insurance rates,” he continued.
New Hampshire also lets any garage owner become an inspection station if they have the right equipment and train their staff.
“We’ve got 2,500 stations, a pretty high number for a state of 1.3 million people and this allows consumers to shop for the best deal with the best service,” McNamara said.
Massachusetts has capped the number of stations there so a new one can’t open unless another one closes.
Auto dealers saw how the frugal nature of the state’s residents can be a factor in 2009 under the Obama administration’s so-called Cash for Clunkers program.
This offered those trading in an old car a rebate up to $4,500 in cash off the price if these consumers bought a new vehicle.
“The suspicion was this would be popular here because so many people had their vehicles paid off and were still driving them compared to other states where owners had their vehicles still under lease or loans,” McNamara said.
Sure enough on a per capita basis, New Hampshire’s participation in Cash for Clunkers led the nation.
This survey didn’t measure this but Crews said these lower costs to own a car do help dealers competitively price them.
“This is why we have so many people from Massachusetts come and buy a car here even when they realize they have to pay the higher fees and the sales tax when they register it back home,” Crews added.
“They’re convinced they’re getting more for their dollar and if they get a warranty up here, they know it will get serviced and that too keeps their operating costs down.”firstname.lastname@example.org