Auto Laundry News - October 2012

Competing for Dollars

By Stefan Budricks, Editor

The Biggest Bite

Easiest to Swallow


In his “Finishing Line” column in this issue Bob Roman points out that while people’s incomes vary widely, average household spending patterns are fairly similar across income categories. Poorer people, however, spend a larger proportion of their income on basic necessities than do those with greater resources.

It should come as no surprise that this holds true also with regard to automotive expenditures. In areas where incomes are low and vehicle expenses are high, car wash operators do battle with a two-headed adversary for a share of consumer spending.

CarInsurance.com has released a new state-by-state analysis of vehicle insurance and gas costs as a percentage of household income. Coined the “Automotive Misery Index,” the analysis finds that the average consumer’s cost for personal transportation can vary from less than 5 percent of household income to more than 11 percent. The first table below lists the 10 states with the highest gas and insurance costs as a percentage of household income. The second accounts for the 10 states with the lowest such costs.

The index weighs each state’s average household income against the cost of gas, number of miles driven, and price of full insurance coverage for a 2012 Honda Accord EX. CarInsurance.com provides examples of how each of these factors can skew the cost of car ownership: On September 1, regular gas cost $3.60 a gallon in South Carolina and $4.34 in Hawaii. The national average was $3.83. In Wyoming motorists travel more than 20,000 miles a year, on average. That’s twice as much as Alaskans do. The national average was 14,133. Average insurance costs range from $889 in Maine to $2,589 in Louisiana.

It is clear that Mississippi suffers from a combined fifth highest cost and lowest income, while New Hampshire benefits from having both the second lowest cost and second highest income. Does this necessarily mean that car wash operators in Mississippi will have a harder time than New Hampshire operators coaxing motorists into the wash? Perhaps not, but the deck is surely stacked against them: there is less money to start with, and from the little there is, more is taken. On the other hand, Des Toups, managing editor of CarInsurance.com, explains that one of the reasons car insurance is so expensive in Mississippi is because the state has the highest percentage of uninsured drivers. Perversely, that frees up some cash for discretionary spending.

If your state is listed neither among the 10 costliest nor the 10 cheapest, you can determine its standing at carinsurance.com/Articles/automotive-misery-index.aspx.

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