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More Texans have a four-figure car payment | Here's how to save when shopping for a ride

A report says Texas leads the country in the percentage of drivers paying more than $1,000 a month

DALLAS — Credit bureau Experian recently revealed that Texas (by far) leads the country for the percentage of borrowing drivers who are paying $1,000 and up per month for their ride: 6.9% of them are doing that. 

They aren’t just paying more per month to pay it off faster because as Bankrate notes, Texans also have the largest average auto loan balance in the country. If the thought of this makes you want to slam on the brakes and bail out now, this may feel better: Cox Automotive reports that after those pandemic years when automobile prices revved way up, they have been starting to edge down slightly from recent highs. 

More inventory, more incentives

A big reason is increased inventory. In early September Cox Automotive reported there was about a 28% increase in the supply of new vehicles compared to a year earlier. They added that dealers have been doing more to entice consumers so they can move all that inventory off the lot. 

Looking at the September report from Cox, dealer concessions were the most generous they’ve been since mid-2021, the typical incentive package equaled 7.3% of the average transaction price of $48,397. That comes out to more than $3,500 in potential incentives. 

But those incentives can vary a lot by vehicle type. Cox noted that full-size pickup trucks had average incentives of 8.4%. Compact SUVs were at 9.2% in potential savings. Buyers of high-end luxury cars could expect a 10% deal sweetener and EV incentives helped knock off 13.3% of the average transaction price on those autos. 

That was before what some experts say is generally the best time of the year to find deals: October through December when next year’s models are arriving and dealers want to clear out this year’s inventory. I just helped a family member recently who was shopping for a vehicle, and after years of a definite dealer’s market, there was a noticeable inclination to negotiate and strike a decent agreement. Best of luck if you are shopping.

If you have gone electric, look out for the EV fee

I recently heard from a Right on the Money viewer whose car is a plug-in EV. However, she was not plugged into the state legislature’s changes for EVs.

The Tesla driver said she was "floored” when she got a registration renewal from the state of Texas that included a $200 EV fee. She says she "had no idea” that was a thing.

It is. The state had realized that, obviously, electric vehicle owners don’t have to pay gasoline taxes. Since those gas taxes fund construction and repairs on roads that electric vehicles still use, last year the state began charging this annual $200 EV fee. 

A Politico Pro analysis found the fee allows the state to collect “more money from drivers going electric than continuing to pay gas taxes”. So, the amount charged by Texas is not without controversy. Some see it as a penalty for going gas-free. 

More controversies on Texas vehicle registrations and inspections

Starting next year, most Texas drivers will no longer be required to get a vehicle safety inspection. You will still have to get an emissions test in certain metropolitan areas. But again, the long-standing safety inspection will not be required. 

 That is a controversial change because of this 2018 study by University of Texas researchers. They found that vehicle defects, most of which would lead to a failed inspection, are responsible for crashes that cost more than $2 billion a year. They also found that fatalities were twice as likely in crashes involving a defective vehicle that in many cases would have been flagged in an inspection.

Even though the state commissioned that study, which concretely concluded that the state should “retain the inspection program” because it “saves lives and enhances safety”, state leaders are ending it starting in January 2025. But you will still be required to pay the state the same $7.50 fee you would have paid for the inspection.

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