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August 22, 2013 at 8:00 AMComments: 1 Faves: 0

Study: Cars Now Equal to the Cost of a One Bedroom Apartment!

By Jeany Miller More Blogs by This Author

The cost of driving a car in the state of Michigan is likely to be equal to rent for a one-bedroom apartment. A 2013 survey found that Michiganders pay an annual average of $2,520 for auto insurance premiums. That breaks down to $210 per month. The Wall Street Journal reports the average car payment is $460 per month. That means a person in Michigan will pay an average of $670 per month just for a car payment and insurance. This cost excludes routine maintenance, repairs, fuel costs, and annual fees to the Secretary of State.

Live to Drive or Drive to Live?

Whatever thought you might have, hold it for a moment. Here is the real icing on the cake: one-bedroom apartments in downtown Detroit start at $300 to $400 per month. The same dwelling in Ann Arbor costs an average of $750 per month. In other words, monthly expenses involved with a car are on par with rent, which seems disproportionate to say the least. Shouldn’t housing be more important – and therefore cost considerably more – than owning a vehicle?
Not in Michigan, where annual insurance premiums are second-highest in the nation. (Louisiana tops the list at $2,699 per year.) There are many reasons for this, and they range from corrupt politicians to scam-artist insurance companies, but perhaps the most logical is that provided by heartland.com:

“In Michigan, part of the cost is an annual fee drivers pay to fund the Michigan Catastrophic Claims Association, a state-chartered reinsurer that is responsible for accident-related medical claims that exceed $500,000.”

Tipping the Scales

Car insurance is one of those troubling aspects of life over which we have no control. It’s comforting to think of moving to Arizona or Maine – where premiums are the cheapest in America – but few of us will actually make such a move based on insurance costs. If we did, we’d probably compensate by paying more for something else. For instance, car insurance in North Carolina is much cheaper than in Michigan, but the cost of groceries is higher. And the cost of living in Arizona is below the national average, but so is the median wage.

Money is transient. It's used to pay bills and maintain standards of living. Most Americans can barely survive on their weekly paychecks, much less set cash aside. The cost of living in America since 1990 has increased by 67 percent, but the real value of minimum wage has increased by only 21 percent. This means we’re working harder than ever but seeing less value for the money we earn.

These statistics are not intended to produce shock or even anger.

They are merely a window into America’s economy, which is not poised to put big dollars into the average person’s pocket any time soon. Bills force us to pay out much of what we earn while the rest goes to trifle pleasures. In Michigan, car insurance is a contender for the most troubling bill and will probably remain so because of the slow nature of bureaucratic change. 

The constant exchange of money is a part of life. All the most of us can hope for is a roof over our heads, food on the table, and reliable transportation from A to B. The economy – which is out of our hands – will dictate where the rest of our money goes.

Sources:

http://www.motherjones.com/politics/2011/06/speedup-americans-working-harder-charts

http://www.cityrating.com/cost-of-living/arizona/#.UhGTZZK1GSo

http://news.heartland.org/newspaper-article/2013/04/30/michigan-governor-backs-auto-insurance-reform

http://www.rent.com/michigan/1-29

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1 Comment

  • This is indeed true but if you have a used car then the insurance rate for such cars are quite low. I have a renault occasion and its interest and insurance rates are very low that saves a lot of my money.

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