Car prices hit record highs with monthly payments of $766 pushing buyers away
US Ambulator in the EU Andy Puzder joins ‘Morning Maria’ with his first interview since the confirmation of thinking to discuss trade, energy, Ukraine and the progressive President and Donald Trump’s first Agenda.
A growing number of buyers are fleeing the new car market as prices become increasingly unaffordable. But used cars don’t offer much relief, according to auto industry experts.
Joseph Yoon, a Consumer Insights analyst at Edmunds, told FOX Business that consumers are protesting the highest monthly payments and the highest loan rates ever seen at Edmunds. The company’s data from October, the most recent on record, showed that the average monthly payment for a new car reached a new high of $766. The average amount financed for a new car also set a new record at $43,218.
It puts more pressure on consumers at a time when consumer confidence has continued to deteriorate.
Edmunds reported in October that the average monthly payment for a new car reached a new high of $766. (David Paul Morris/Bloomberg via Getty Images)
Used car prices jump to highest level since 2023 as auto taxes drag on buyers
Brian Moody, senior editor of Autotrader, told FOX Business that the majority of buyers he spoke to said the price of a car, which includes financing, insurance and maintenance, “all but eliminates new cars.”
With consumers turning, Moody pointed out that automakers may be forced to come up with new ways to reduce the prices of new cars in order to find sellers, “Perhaps even lower quality cars to meet the prices that buyers want,” said Moody.
The shrinking availability of new cars is putting pressure on many buyers for used cars. However, even then, the relief is limited – the problem returns to the epidemic of 19 of 19.
New car payments down 4 years old as buyers grapple with availability challenges
Yoon said rental rates — the percentage of new cars sold that are leased instead of purchased — are a key factor behind today’s car shortage. Since there were very few leased cars during the pandemic, when inventory was tight and leasing was unpopular, now there are few illegal cars returning to the market. Those cars tend to make up a big chunk of the used car supply, so the pullback has created a noticeable shortage, Yoon said.
“While used purchase prices are cooling from peaking in 2022, the prices of the most used (new) used cars are at a high level, giving retail buyers a value proposition,” Yoon said.
The shrinking availability of new cars is putting pressure on many buyers for used cars. (Eric Lee/Bloomberg via Getty Images)
However, for many buyers, used cars remain the only viable option. That appears as demand for used cars continues to rise even with higher prices.
Moody noted that the pace of sales of used cars in October reached $ 1.4 million, up 3% every month. Meanwhile, Moody’s estimated that prices in October jumped 2% from a year earlier to $25,945. However, the nearly $26,000 used car listing is less than the $50,000 average new car price for a new car, which Moody’s says is below the price point that has turned many buyers away.
Car industry experts warn prices are rising rapidly as discounts become ‘harder to get’
“There are a lot of used cars out there, but it could take a little more research,” Moody said. He said that used luxury cars tend to depreciate quickly, including electric cars, so they tend to represent significant value. Those cars also tend to have standard safety features and options due to their high price when sold new.
Steven Poser, CEO of Putnam Leasing, told FOX Business that the long-term could help alleviate some of the problems consumers face.
The average price of a new car reached about $50,000. (Genaro Molina / Los Angeles Times via Getty Images)
“If buyers are currently leasing at a lower rate, seeing if they can extend the lease through a builder is a good way to get more time to see where the market is headed,” said Posner. He noted that most car manufacturers will offer buyers six months on the same rate and payment, so that they are not forced to buy something they may not find the best.
For the owner of a New Jersey Car Dealership
Find FOX business on the go by clicking here
Posner added that it’s also important to remember that retailers are especially motivated to make deals at the end of the month and the end of the year. At the end of the year, some manufacturers are encouraged to push cars out and remove inventory, often making it the best time to get a car.
