Synchrony Financial: Underestimated Car Ownership Costs Drive Demand for Flexible Financing

Undercalculating Ownership Costs Drives Demand for Flexible Auto Financing

Synchrony Financial’s recent Cost of Car Ownership survey finds U.S. car owners dramatically underestimate annual vehicle expenses, creating pressure on household budgets and heightening demand for flexible financing options. Respondents estimate they spend $2,738 a year excluding loan and lease payments, but Synchrony’s survey shows the true average is $7,303 — a $4,565 shortfall, or roughly 167% more than owners expect. The company highlights routine maintenance, unexpected repairs, insurance hikes, parking and registration, fuel volatility and rising labor costs as key drivers of the gap.

The magnitude of the miscalculation is prompting changes in consumer behavior that affect lenders and retail partners. With new‑vehicle prices hitting record highs — Kelley Blue Book records an average new car sale price of $50,080 in 2025 — nearly 60% of consumers say they are keeping vehicles longer, multicar households are declining, and many buyers are reconsidering purchases. Synchrony executives, including Curtis Howse, EVP and CEO of Home and Auto, warn that consumers who do not budget for the full scope of ownership face real financial strain that can ripple into reduced discretionary spending.

For Synchrony and peers in consumer finance, the survey underlines an opportunity and an obligation to expand payment flexibility and consumer education. The firm is promoting pay‑over‑time products and tailored budgeting tools as ways to smooth cash flow, extend vehicle lifespans and reduce shocks from unplanned repairs. Industry stakeholders and policymakers are urged to monitor how escalating ownership costs reshape mobility patterns and household finances, with lenders and dealers positioned to mitigate strain through clearer cost disclosure and adaptable financing.

Younger drivers face the sharpest shortfalls

The burden is concentrated among younger cohorts: Millennials average $10,101 a year and Gen Z $9,984, well above the overall mean. Synchrony’s data signal that younger consumers, who often carry tighter budgets and higher financing reliance, are particularly exposed to unexpected auto expenses and may increasingly seek financing structures that spread costs over time.

Calls for transparent tools and cross‑industry solutions

Synchrony recommends that dealers, lenders and fintech firms expand transparent cost education, offer tailored budgeting tools and promote flexible payment plans to help households avoid savings depletion and make more informed replacement decisions. The company frames these steps as central to preserving consumer purchasing power and sustaining long‑term vehicle financing relationships.