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buying The Average New Car Price Has Already Rose Another $5,000 In Just Nine Months

06:35  14 october  2021
06:35  14 october  2021 Source:   jalopnik.com

A small victory: Used-car prices slip from dizzy heights

  A small victory: Used-car prices slip from dizzy heights A small victory: Used-car prices slip from dizzy heights (Associated Press) Your browser does not support this video Until the pandemic flattened the economy in March 2020 and shrank the supply of both new and used vehicles, average wholesale used vehicle prices paid by dealers rose only a little every year. Average prices briefly fell in April last year, only to soar over 60% to a peak in May this year, according to data kept by Manheim, a group of auction houses where dealers buy vehicles. Any decline, however slight, would represent welcome relief for buyers.

If all new car buyers followed my 1/10th rule, they’d all be making ~0, 000 a year. But, I’ve still got a long ways to go to convince people not to throw too much of their money down the toilet, despite Financial Samurai being around since 2009. With so many people from public train janitors to 26 year old programmers to food bloggers making 0, 000 + a year today, 0, 000 a year for the average new car buyer can’t be too far off. It still baffles my mind that the average net car price is about , 000 in the new decade.

It remains a poor time to be in the market for a new car . Or a used car . According to an Automotive News report on the latest data from Cox Automotive on Monday, wholesale used car prices rose to record highs this past September. In turn, that means the prices dealers charge used car buyers also continue to rise . © Provided by Roadshow Used cars aren't the best deal at the moment. Fotog/Getty Images. Year-over-year, wholesale prices are up 27% compared to September 2020. From August, September saw prices climb 5 .3%.

In December of 2020 the average price of a new car in this country topped $40,000 for the first time ever. Nearly a year later, we can wave goodbye to the $45,000 mark.

  The Average New Car Price Has Already Rose Another $5,000 In Just Nine Months © Photo: Spencer Platt (Getty Images)

September’s $45,031 average makes for the sixth-consecutive month of rising average new car prices, each one setting a new record high, according to Kelley Blue Book. In August it was $43,418. Blame SUVs and full-size pickups comprising ever-larger slices of the overall sales pie, compared to back in the summer when smaller crossovers and passenger cars were stronger. Luxury brands shifted more vehicles last month, too.

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Meanwhile, new car prices have risen only 25%. After looking for about a month and feeling like the prices were too high, I priced out a brand new one. On the new one I got 0.99% financing compared to 5 .99% that I was being offered on anything used. So I did the math and I found that when you include the interest paid over the course of the loan, the total price was almost identical for the 2019 I bought vs a 2017 with 35, 000 km on it.

Another factor lifting the average car price : Car buyers' desire for more expensive trucks and SUVs, rather than less expensive sedans. Consumers also want more expensive features, such as automatic braking and lane departure warnings, which boost prices , too. Surging inflation. "Used car prices typically rise about 1% annually," he said. "It's definitely contributing far more to inflation right now." The rising price of new and used cars is an important part of the inflation reading, given how much Americans spend every year on cars -- more than 0 billion annually, Smoke said.

Still, the overall number of cars sold in September was down 7.3 percent compared to where it’d been in August. That leaves September as one of the worst-performing months in terms of sales volume of the last 10 years.

So, in short, fewer new cars left the lots but more of them were on the pricier side. KBB’s average prices don’t factor incentives, but those have roundly diminished across the board, too:

Incentive spending fell in September to another record low, dropping to 5.2% of [average transaction price] last month, a decrease from 5.6% in August 2021 and well below the 10.0% of ATP recorded in September 2020. Porsche, Land Rover, Genesis, Subaru and Toyota had among the lowest incentive spend last month, all 3% of ATP or lower. On the other hand, Alfa Romeo, Buick, Fiat and Infiniti each had incentive levels above 10% of ATP.

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New car supplies are on their way up and a lot of inventory is in the pipeline. Once these cars hit the ground it’s going to correct and correct rather quickly. A lot of foolish dealers are going to take big hits in the upcoming months on depreciated inventory. Just in the last week or so, I have noticed a whole bunch of new cars added to the website under “dealer ordered”. To me, that means the manufacturers are starting to overcome the chip shortage.

Average new car price zips 2.6% to ,560 Though as a personal aside, realize there are many cars more expensive than that and many cars cheaper than that. Financing a car hasn’t been out of the ordinary for decades. Even when cars cost maybe six or seven hundred dollars, that represented two or three months ’ wages for the average worker. You weren’t just going to walk in to a dealer and plunk down that kind of cash unless you had just sold another car , and/or you had saved up for months or possibly years.

Even among those four brands more desperate for sales, average transaction prices still rose — by 2.6 percent in Fiat’s case and 3.5 percent for Buick, for example. In fact, Acura, Ford, Mini, Subaru and Volkswagen were the only makes surveyed that tended to sell cars for less money in September than they had in August. Subaru appeared to have a particularly difficult September thanks to the chip shortage, even though Crosstreks reportedly spent fewer days on lots than any other nameplate.

And if we hone in on the luxury badges, well, things are truly getting out of hand:

Luxury sales accounted for 16.6% of total market sales, up from 15.1% in September 2020. Luxury share in September was among the highest in the past decade, and luxury buyers paid an average of $60,845 for a new vehicle last month. Further, many luxury brands, notably Acura, Cadillac, Genesis and Mercedes-Benz, achieved year-over-year ATP gains in excess of 20%. Cadillac, for example, saw ATPs jump up more than 32% last month, reaching $81,939.

Used car buyers turn to even older vehicles to save a buck amid rising prices

  Used car buyers turn to even older vehicles to save a buck amid rising prices In 2021, most used car buyers are now looking at cars seven years old on average.According to the data, the average age of a used vehicle Americans purchased in the first two quarters of 2020 hovered around 5.8 years old. Year-over-year in 2021, the age jumped to 7 years flat on average. In some metro areas, the average age of vehicles on which shoppers kicked the tires more than doubled. New Orleans, for example, ranked at the top with potential borrowers shopping 16-year-old cars on average this year. More often than not, older cars cost less, and it's clear Americans are looking to turn back the clock to land an affordable car.

While economists have insisted for months that inflation is temporary, prices have continued ticking up. Everyday Americans are left feeling the sting in their bank account today: Wages grew just 4.6% in September compared to a year prior, far below the 5 .4% year-over-year price increase. "While some of the so-called transitory factors like used car prices , airfares and apparel continue to ease after sharp run-ups in earlier months , inflation is broadening out," says Greg McBride, chief financial analyst at Bankrate. McBride says that increased housing prices are especially worrisome for the average family.

CarGurus lets you search new car prices of dealers in your area to identify these numbers. Just enter the make, model, and other information for your target vehicle(s) into the search engine. For each one, the results will indicate an individual dealership’s price in addition to the MSRP, as well as the But while monthly payments are important in ensuring your new car fits your budget, you shouldn’t focus solely on them, particularly if structuring the deal around a monthly payment results in more months being added to your finance term. Doing so can make the sale price seem smaller than it is, which is

Year-over-year average transaction price gains in excess of 20 percent! For an idea of what that looks like in raw prices, the average new Mercedes-Benz cost $59,899 in September 2020. Last month, it cost $75,369. That’s what a 25.8-percent rise represents.

Fair enough, you might think, if those who can pay more choose to — but of course this phenomenon isn’t limited to fancy new cars. Wholesale prices of used cars are also setting records after it seemed they might taper off late in the summer. It’s no surprise that nearly half of new car buyers KBB surveyed in August said they’ll probably delay their shopping for several months to a full year. Anyone brave enough to bet that things will be better by then?

Looking to purchase a car? Find your match on the MSN Autos Marketplace

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This is interesting!