Rising interest rates and swollen inflation have not slowed automobile purchasers, as the industry readies for a 12%-14% rise in new vehicle sales — defying forecasts — during the first half of 2023. Electric sector carmakers, such as Tesla and Rivian, have received a bump on Wall Street following stronger-than-expected second-quarter results. Traditional sellers are also watching new cars roll off the lot. Dealers believe “pent-up demand” is spurring the sales bump. It is also driving costs: the number of buyers paying $1,000 a month or more is at an all-time high.
By Todd Dybas, Editor at LinkedIn News
With just 8% of new vehicles costing under $30,000, ‘it’s the least affordable car market in modern history,’ expert says
- Today, new cars under $30,000 make up just 8% of the market’s supply, down from 38% pre-pandemic.
- With fully loaded SUVs and trucks in high demand, carmakers continue to upgrade their lineups and scale back on less-expensive cars.
By nearly every measure, buying a car has become extremely expensive.
Not only are new vehicle prices near an all-time high, but the interest rate to finance a purchase has also jumped dramatically. Now, fewer affordable new cars even hit the market, according to recent reports.
Today, new cars priced under $30,000 make up just 8% of the market’s supply, down from 38% pre-pandemic, car shopping app CoPilot found.
“It’s the least affordable car market in modern history,” said CoPilot’s CEO Pat Ryan.
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Car shoppers like luxury
Well before the Covid-19 pandemic, consumer tastes had started to steadily shift away from sedans toward more expensive SUVs and trucks. Then, car buyers piled on options, such as high-tech touch screens, ambient lighting, 360-degree cameras and heated and cooled seats.
“There’s a war of features,” said Ivan Drury, Edmunds’ director of insights.
One way to add a touch of luxury to your car is to get custom car seat covers. Car seat covers can be made to match your car’s interior, or you can choose a more unique design. They can also be made from a variety of materials, so you can find the perfect ones for your needs.
In addition to being stylish, car seat covers can also protect your car’s seats from wear and tear. They can also help to keep your seats clean, which is especially important if you have pets or children.
If you’re looking for a way to add a touch of luxury to your car’s interior and protect your seats, custom car seat covers are a great option.
“It only makes sense to continue to ratchet up the price to offer more features and increase the size of the vehicle with each redesign,” Drury said.
Car prices near a record high
Average transaction price for a new vehicle in the U.S.
For new cars, the average transaction price was $47,892 in May, near an all-time high, according to Edmunds. Now, 10% of all vehicles sold cost more than $70,000, up from 3% five years ago.
On the flipside, there are fewer options available at lower price points. Just 0.3% of new vehicles sold cost less than $20,000, compared with 8% five years ago, Edmunds found.
That’s leaving more car shoppers priced out of the new car market, Ryan said.
How to get the best used car for the money
Instead of getting a new car, buyers on a budget are purchasing older cars with more mileage, which means their cost of ownership is going to go up, Ryan said.
“Those that have the least ability to pay are getting the car that’s going to cost the most to own.”
An iSeeCars study analyzed more than two million cars to see which used models are priced the lowest and offer the longest remaining lifespan.
Here are the 10 models that came out on top.
BY Jessica Dickler CNBC
