Owning a new car is not something that people I spend time with often do. In fact, they don’t even talk about aspiring to own a new car because the prices are simply too high. While that might be an indication of their station in life, the data now supports the idea that for most Americans, a new car is out of their budget.
This data comes from Cox Automotive, a company that claims to be the largest automotive service organization in the world. They do a lot of business around the automotive market, so they know a lot about prices and trends. Cox says the average monthly payment for a new car is $777, or nearly double what it was at the end of 2019.
According to JP Morgan, the average price of a new car is around $50,000, or about 30 percent higher than it was in 2019. What’s at the heart of such a giant leap? Well, the pandemic, the shortage of chips and other factors did not help, but now many expected relief.
Read: Average new car prices fall 0.6%, but luxury cars take bigger market share
Bloomberg describes the problem as one created by the automakers themselves: “At the root of the problem is automakers’ new mantra: keep inventory lean and price tags fat. Three years after the pandemic triggered a global shortage of semiconductor chips and auto manufacturing crippled, Ford Motor Co., General Motors Co. and their overseas rivals are reaping big profits. Even as the chip crisis shows signs of abating, they are vowing to keep production under control.”
It also highlights that while last year was the slowest year in terms of total vehicles sold in the US (about 13 million), in a decade some companies, such as Ford and General Motors, made financial gains. Ford saw a 4.4% rise in gross profit, while GM’s adjusted earnings grew by about $200 million to a total of $14.5 billion.
Also, things are not going back to how they were before the pandemic in terms of prices or inventory levels. We don’t say that, it’s the car manufacturers themselves. “We’re never going to get back to the inventory levels we were at in the past,” GM Chief Executive Mary Barra said last year.
Judy Wheeler, Nissan’s vice president of U.S. vehicle sales, said in an interview that “We’re going to keep that supply and demand in a level state.” It seems that the new normal is a car market only for the rich. If the brands and flippers on auction websites are anything to go by, we shouldn’t be surprised.
array(9)
[0]=>
string(397) "
Owning a new car isn’t something that people I spend time with often do. In fact, they don’t even talk about aspiring to own a new car because prices are simply too high. While that might be an indication of one’s station in life, data is now backing up the idea that for most Americans, a new car is out of their budget."
[1]=>
string(348) "
That data comes from Cox Automotive, a company that calls itself the world’s largest automotive service organization. They do a lot of business surrounding the automotive market so they know a lot about pricing and trends. Cox says that the average monthly payment for a new car sits at $777, or almost double what it was in late 2019."
[2]=>
string(294) "
According to JP Morgan, the average price of a new car sits at around $50,000, or roughly 30 percent above what it was in 2019. What’s at the heart of such a gigantic jump? Well, the pandemic, the chip shortage, and other factors didn’t help, but by now many expected relief."
[3]=>
string(276) "
Read: Average New Car Prices Dip 0.6%, But Luxury Cars Take Larger Market Share"
[4]=>
string(2576) "
Bloomberg describes the problem as one created by the auto manufacturers themselves: “At the root of the problem is automakers’ new mantra: Keep inventory lean and price tags fat. Three years after the pandemic triggered a global shortage of semiconductor chips and crippled car manufacturing, Ford Motor Co., General Motors Co. and their overseas rivals are notching big profits. Even as the chip crunch shows signs of easing, they’re pledging to keep production in check.”"
[5]=>
string(406) "
Notably, it also points out that even though last year was the slowest in terms of total vehicles sold in the U.S. (approx 13 million), in a decade, some companies, like Ford and General Motors, saw financial gains. Ford saw a 4.4 percent rise in gross profit while GM’s adjusted earnings grew by some $200 million to a total of $14.5 billion."
[6]=>
string(393) "
Moreover, things aren’t going back to the way they were before the pandemic in terms of pricing or inventory levels. That’s not us saying it, it’s the automakers themselves. “We’ll never go back to the inventory levels that we were at in the past,” said GM Chief Executive Officer Mary Barra last year."
[7]=>
string(494) "
Judy Wheeler, vice president of U.S. vehicle sales for Nissan, said in an interview that “We’ll keep that supply and demand in a level state.” It looks like the new normal is an automotive market for the wealthy only. If markups and flippers on auction websites are anything to go by, we shouldn’t be surprised."
[8]=>
string(1777) "
"
