A $700 Car and $70-a-Week Gas Are Becoming the New Symbols of the Cost-of-Living Squeeze
The cost-of-living crisis continues unabated, with things having hit a serious head during the soaring inflation of COVID-19 — and with little relief having shown itself since. Then, an already stressed workforce encountered a seismic shift via new pressure from AI labor and the price of a new or used vehicle ramped up beyond even pandemic-era highs.
Now, with gas prices remaining high — largely due to the prolonged Iran conflict, which often sees the vital Strait of Hormuz closed to oil tanker traffic — the reality of a low- or middle-income American household relying on a $700 car, yet enduring a $70 gas bill each week, is hitting home for many.
With many Reddit users now advocating for buying a so-called "beater" vehicle (ranges in price from $700 to $3,000 are often cited), it looks like the time-honored financial advice of driving a very modest vehicle is gaining traction with the average motorist. Redditors seem enthusiastic, even if out of necessity, about the reality of rigging up an aging vehicle to compete with its more modern and expensive, equivalent.
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"A paid off car is the best car," read the top comment, with several others in the thread joining in to offer tips on how to hook up a cheap audio system — or simply to congratulate one another on their fiscal prudence in economically trying times.
New Cars and Used Cars Alike Remain Very Expensive Purchase Options
Data sets support the idea that car ownership may be out of reach for many U.S. workers, with AAA notching the average annual cost of owning a new car in 2025 at a hair over $11,500, including depreciation costs. The average purchase price in 2026 was highlighted by Kelley Blue Book (KBB) at a whopping $49,275.
Used car prices remain equally stubborn, with Cox Automotive suggesting that — as of March 2026 — prices had increased by 6.2% year-over-year and were at their highest since the summer of 2023. KBB pegged the average used car purchase price at $25,390.
Soaring Gas Prices Continue To Hurt Americans
Recent Bank of America findings reinforce the reality of a fair number of Americans driving older vehicles but getting soaked when paying for gas at the pump — particularly for lower-income households. In the month of March, gas spending overall surged by 16.5% month-over-month, as the Iran conflict, and the resulting problems within the oil supply chain, affected consumer prices.
The outlook remains less than rosy, with experts estimating that new car prices will once again cross the average price point of $50,000 this year and used cars also climbing slightly. With the situation surrounding the Strait of Hormuz remaining up in the air, relief at the pumps also seems unlikely in the near term. Savvy drivers might do well to stick with an inexpensive, reliable rig as macroeconomic malaise remains the diagnosis, seeking out reputable garages for necessary repairs.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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