The Typical Family’s Vehicles Are Worth $26,000, Down 14% Since 2022
Retirees often list the paid-off car beside the house and the IRA, but the Fed's newest data shows that cushion is thinner than it looks. One monthly habit could turn that shrinking asset into a bill you never have to…
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Plenty of retirees still count the paid-off car in the driveway as an asset, right alongside the house and the IRA. The Federal Reserve does the same thing. Its Survey of Consumer Finances lists vehicles as nonfinancial assets. The latest edition shows the typical family’s cars and trucks are worth a lot less than they were three years ago. This article looks at what those vehicle values tell retirees about the money sitting in their garage.
What the Fed’s Latest Survey Found
In the 2025 Survey of Consumer Finances, 84.2% of families owned a vehicle, down from 86.6% in 2022. Among owners, the median vehicle value fell from $30,300 to $26,000, a 14% drop. Picture a simple ranking. If you line up every car-owning family by what their vehicles are worth, the middle one is now at that figure.
The average fell by a smaller margin. Mean vehicle value fell 13% to $38,000. The average runs higher for a simple reason. A few families with six-figure pickup trucks or luxury SUVs pull it up, while the middle family doesn’t move at all. That’s why the median is the better read on what a typical household actually drives.
Why the Number Shrank
The figures have been adjusted for inflation. The Fed restates the 2022 numbers in 2025 dollars, so both years are measured with the same buying power. Consumer prices rose at an average annual rate of 3.6% between the two surveys. So even a car whose dollar value held steady would show a real fall once inflation is factored in.
The survey doesn’t explain why vehicle values fell. The good news is that our analysis suggests a few possible reasons. Used car prices were unusually high in 2022 after pandemic supply shortages and have since fallen. Cars also lose value every year they age, and families holding onto vehicles longer would drag the median down over time.
The Fed explains the drop in ownership: families in the bottom 20% of the income distribution drove it, with ownership falling from 66.4% to 59.4%. That’s the lowest rate for this group in 20 years.
Why Retirees Should Treat a Car as a Cost
A car loses value every year it sits in the driveway, and retirees who count it as savings are exaggerating their cushion because the asset shrinks while they own it. It’s better to treat the car as a cost that gets paid over time.
That said, a long-held car can save real money, because once the loan is gone, there’s no monthly payment. Most of the steep early value loss is already behind it, so each extra year of driving it is cheap. Pulling retirement money for a new vehicle also carries hidden costs. We looked at this recently. A 60-year-old taking $40,000 from his 401(k) for a truck found the plan holds back 20% before he gets any cash. And anyone considering a used EV should know the federal credits ended in 2025.
Older cars still cost money to keep on the road, because insurance premiums don’t disappear as the car ages and many states keep charging registration fees every year. Fuel is another steady bill. Regular gas averaged $4.15 per gallon the week of November 2, up $1.12 from a year earlier.
How a Car Fund Adds Up Over Eight Years
A sinking fund is just money set aside a little at a time for a bill you know is coming. Say you plan to keep a car for eight years and set aside $300 a month. By the time it’s ready to replace, you’d have $28,800 saved, before any interest. That’s more than the $26,000 median vehicle value.
If you’d rather aim right at that median, the target over those same eight years works out to about $271 a month. Keeping the money in an interest-bearing savings account would add a bit more. Showing up at the dealer with cash lets you skip the loan and the interest that comes with it.
One Account Worth Opening This Month
If there’s a single move to take from the Fed’s data, it’s opening a car fund. Make it a separate savings account, label it for the next vehicle, and set an automatic monthly transfer. If you’re still making a car payment, keep sending that same amount to the fund once the loan is paid off. You’re already used to living without that money.
Vehicle values fell between 2022 and 2025, and fewer lower-income families own a car. The car in the driveway will keep losing value. A car fund means the next one gets paid for in cash instead of with a loan.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
