Even if you find a new car to buy, it may actually cost you more to buy it.
“It’s a really tough time to buy a car,” said Jessica Caldwell, executive director of insights for Edmunds.
According to the latest data from the US Bureau of Labor, limited inventory due to persistent shortages of computer chips, along with other supply-chain challenges, led to a 12.6% increase in new car prices compared to a year ago and a 16.1 percent increase in car prices. % increased by. Statistics.
For new cars, the average transaction value is a . expected to reach All-time high of $45,844 In June, according to a separate JD Power/LMC Automotive forecast.
Rising interest rates mean higher loan costs
Also, financing any type of vehicle is also becoming more expensive, as is the Federal Reserve’s. latest interest rate hike Increases cost by 0.75 percentage points auto loan,
“Low interest rates were one of the few respite for car buyers amid high prices and lack of supply,” Caldwell said. “But this year’s Fed rate hikes are making finance incentives too expensive for automakers, and consumers are starting to feel the pinch.”
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According to June data from Edmunds, the average annual percentage rate on a new car reached 5% for the first time since the start of 2020.
Experts at Edmunds said that an increase of about one percent may not sound like much, but jumping from 4% to an APR of 5% could cost consumers $40,000, $1,324 more in interest over the course of a 72-month car loan. .
And yet, luxury buyers are flocking to dealerships, willing to spend more on high-end cars and the financing to go with them.
For the first time ever, more than 12% of consumers who financed a new car in June committed to monthly payments of $1,000 or more — the highest level on record — compared to 7.3% a year earlier, Edmonds found.
“While there appears to be a steady stream of affluent consumers willing to make car payments that look like mortgage payments, the new car market is growing out of reach for most consumers,” Caldwell said.
There appears to be a steady stream of affluent consumers willing to make car payments that look like mortgage payments.
Jessica Caldwell
Executive Director of Edmunds’ Insights
with Attractive Luxury SUV Segment In high demand, more carmakers are upgrading their lineups and scaling back on smaller cars, Caldwell said.
“There aren’t a lot of options on the low end.”
Factoring in near-record highs gas pricesHe said the affordability problem is not expected to improve anytime soon.
Typically, dealers offer some incentive to offload excess inventory before the new model arrives, but not this year.
“Don’t expect a lot of end-of-summer sales; there’s really no inventory at this point,” Caldwell said. “If you want to wait for prices to get better, it’s probably going to take a while.”