With approximately 20% of the world’s oil traffic passing through the Strait of Hormuz, the war with Iran has already caused U.S. gas prices to spike. If the conflict continues, gas could be as high as $4.00 per gallon by late summer.
Learn More: How Much Gas Prices Have Increased in Every State Since Iran Conflict Began
Find Out: How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
That’s not the only headache that could hit American car owners this summer — there are almost always a handful of hidden car costs that come with skyrocketing gas prices. If the war in Iran continues, you may want to prepare your wallet for a costly year of driving due to the following factors.
Maintenance and Repairs Will Be More Expensive
Increased gas prices tend to impact the manufacturing and shipping costs for individual vehicle parts, such as tires, brakes, interiors and more. As fuel and shipping logistics increase in price, repair shops will as a result face higher supply and operating expenses — and that raises the maintenance prices for drivers.
Insurance Costs Will Also Spike
As the cost of parts, labor, vehicle replacement and other forms of auto maintenance rise, insurers have to pay more per claim. Those higher payments for claims result in higher premiums for drivers.
Discover More: Trump Says the Iran War Could End Soon: How Your Wallet Could Still Feel the Pinch After It’s Over
Financing Fees and Loan Costs
When fuel prices are hit with shocks and sudden increases, broader inflation tends to follow. Banks typically respond to that inflation by tightening their monetary policies and increasing their own interest rates. The result? Higher interest rates raise auto loan APRs, which in turn increases financing costs for vehicles.
Bottom Line
The economic impact of war in the Middle East isn’t just localized to the gas pump. The ripple effect of increased gas prices can make nearly every aspect of car ownership more expensive.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 3 Invisible Car Costs that Will Spike with Your Gas Prices Right Now
