Is your commute costing you? How commute time affects your auto loan balance

With most COVID-19 restrictions in the rearview mirror, many are once more commuting to work — on a hybrid or daily schedule. In 2022, 37.7 percent of American workers were stuck behind the wheel for between 15 and 29 minutes each way, according to data from the U.S Census Bureau.

With more minutes clocked in the car to and from work, your vehicle is likely working overtime — especially following the pandemic, when many cars sat idle gathering dust. If you’re one of the 64 percent of workers commuting at least part-time, the added expense of maintenance atop current high interest rates might be making your vehicle all the more expensive.

Commute cost statistics

• Drivers in 2022 spent $2,740 annually to commute to work, up from $2,064 in 2021. (Overheard on Conference Calls)
• One of Bankrate’s picks for best commuter car, the 2023 Honda Civic, has an MSRP of $23,750 when purchased new. (Bankrate, Kelley Blue Book)
• 28.8% of U.S. drivers had a commute of 30 to 59 minutes in 2022. (U.S Census Bureau)
• New York residents have the highest average commute time, at 33.4 minutes, and carry an average auto loan balance of $4,230. (Titlemax, Bankrate)
• The average cost to own and operate a new vehicle in 2022 was $10,728. (AAA)

Remote work affordability

For some drivers, the additional cost of commuting can drive them toward one job over another. It has even pushed 64 percent of Americans to prefer a fully remote schedule instead of in-person schedules, according to a recent Bankrate survey. Outside of cost, many workers consider the drive to and from work a major pain point that comes with a job.

It’s enough of a pain point that 78 percent of workers would be willing to make a sacrifice to work remotely, such as changing jobs, working off-peak hours or taking a pay cut, according to the same survey.

Another Bankrate study found that 77 percent of workers would give up at least one guilty pleasure to avoid their commute. Some 32 percent of surveyed commuters would give up junk food in exchange for a job without a commute.

Many companies offer a hybrid or work-from-home option, 42 and 39 percent, respectively, according to Gallup. While this option boasts the obvious benefits of flexibility and comfort of home, it also can mean money saved. As drivers rack up miles driving to work, costs can build.

On top of this, job seekers might have to explore taking out an auto loan to finance their ride to work, a choice fully remote workers would not have to make.

No matter how often you’re heading into the office, securing the right loan and understanding how additional costs build with more time on the road is as important as polishing your resume.

For example, choosing a job close to home and offering a hybrid model might make sense if you are focused on keeping your auto-related bills low.

With this in mind, it is unsurprising that work location and schedule flexibility have become top priorities for job seekers.

Financing a commute to work

Unlike a car you might use primarily for short drives or leisure time, purchasing a car for your long drives to work requires some extra thought. Consider the following tips when buying a commuter car.

1. Shop for reliability, not style

When buying a new vehicle, it is easy to get distracted by vehicles with all the bells and whistles. But your drive to work doesn’t require a sports car. Instead, vehicle usability should be top of mind. Remember that your vehicle will likely depreciate much faster due to the miles you clock to and from work.

Here are some of Bankrate’s winners for best commuter cars.

2. Budget for vehicle maintenance

The cost to pay off your auto loan each month is just one aspect of vehicle ownership you must consider. Drivers commuting to work can spend up to $410 on vehicle maintenance each year, according to Clever Real Estate. And while maintenance costs are unavoidable in keeping your vehicle safe, choosing the right vehicle can help you save on trips to the auto body shop.

The best way to choose the most reliable vehicle requires some extra research. Check out Kelley Blue Book for vehicle reviews and expected maintenance costs. Remember that luxury vehicles will likely carry more expensive parts and costs, whereas more basic vehicles could cost less. It is best to avoid vehicles with a history of issues or recalls, which can be found by checking the National Highway Traffic Safety Administration.

For drivers commuting an average of 41 miles a day Monday through Friday, that’s an extra 205 miles per week on top of normal driving patterns. And as your speedometer increases, you get closer to having to pay for routine vehicle maintenance. Requirements for check-ups vary by vehicle brand but most recommend around 30,000 miles.

With these extra miles in mind, you can use the price of expected maintenance to inform your vehicle choice. Here’s a breakdown of the expected price for some of Bankrate’s most reliable vehicle picks in 2023.

3. Pay attention to fuel efficiency

The cost of filling your commuter car’s tank can add up. The current gas price average is $3.88 per gallon in September 2023. Considering two popular vehicles, the Honda Civic and Ford F-150, there is a clear winner for saving money on gas.

The Civic boasts an average mpg of 33, going through 6.2 gallons per week to commute 205 miles. That weekly commute will cost about $24 in gas. The F-150, on the other hand, has an mpg of 21, so drivers will burn through 9.8 gallons per week. This will cost more than the Civic, reaching $38 per week at the gas pump.

This simple exercise can be helpful when choosing one car over another. Pay attention to miles per gallon, the measure of fuel economy.

Beyond mpg, many drivers are moving towards driving a fully electric vehicle to avoid any trips to the gas station. Consider taking out a green auto loan to finance your vehicle and exploring available tax credits to save some extra cash.

4. Compare loan options

As with securing any financing, the key is shopping around and comparing several options. Outside of normal considerations like interest rate and loan terms, there are other specifics to focus on.

While you might change the radio station often when driving to work, the same flexibility cannot be said for loans. So when choosing the right loan for your commuter car pay close attention to the length of your loan as this will determine how long until the vehicle will truly be yours.

Look out for special features that lenders may offer, such as 24/7 support or apps. Tech like this can streamline your loan process.

The bottom line

Many workers can’t opt out of their commute, so it is important to make choices that make the daily ride enjoyable. When seeking the right vehicle, pay attention to all-in costs and how the car can improve your commute. Compare several lender options to ensure you sign off on the best loan terms and rates for your needs.