There is no shortage of automotive studies. And each is designed to collect and analyze car-buying data to spot challenges, predict trends and help consumers make purchasing decisions. Cox Automotive, for example, recently released the findings of its recent new car affordability study.
We delved into the metrics and results of this study. It seems the findings only reinforced what consumers already knew about today’s new cars. But there’s a little more to unpack, even if it’s just a reaffirmation of what everyone suspects about the current market.
What this Cox Automotive study measures
Today’s new cars are packed with innovative new features, leading technology and improved safety mechanisms. The materials are also of better quality. Add to that the current economy, with supply chain disruptions, higher interest rates and reduced inventory, and you have the conditions ripe for higher car prices.
Cox Automotive’s recent study took all of these metrics into account when assessing how expensive today’s cars really are.
If you’re like most consumers, you’re now re-entering the car-buying market after a three- to five-year hiatus. And you will have sticker shock. The study focused on vehicles priced under $25,000 and those priced over $60,000.
And the group compared snapshots of new vehicle sales in December 2017 and again in December 2022. The results were categorized into these two price groups, describing models available, volume sold and share of total sales of each.
In 2017, total sales of vehicles above the $60,000 MSRP line represented only a 7.8% share. In 2022, that same snapshot showed total vehicle sales accounting for a 25.2% share. It’s like the mainstream car market is adopting luxury market pricing.
Major takeaway consumers should know
New car prices are rising, and it’s nothing new. The key takeaway from this study is that there is now evidence for what most consumers already believed. For a number of reasons, new cars are more expensive these days. And while you’ve noticed price gouging throughout your car-buying life, now you have the data to confirm your suspicions.
Five years ago, the thought of paying over $100,000 for a Jeep would have been insane. But in today’s market, you just have to wait. Affordability of new vehicles will continue to be a priority among consumers. And now that the stakes have moved, you may be ready to pay more.
How you can stay under budget when buying a car in 2023
With today’s higher MSRPs in mind, there are tips you can rely on to help you stay on top of your car budget. Look for a fair price, for example, rather than a “steal of a deal.”
If you have a vehicle to trade in, you can also expect to get a bit more, as used prices are still in high demand. Selling your used vehicle outright, however, will be a better way to get more cash, according to Click Orlando News. And to avoid overspending, rely on trusted auto reviews and recommendations for fuel-efficient cars with value.
Other sources advise consumers to be diligent in doing their homework before buying. Don’t buy more vehicle than you need and don’t fall victim to impulse buying. And even with all the online resources and tools available, a good old-fashioned test drive is a viable way to test out new vehicles.
You already had a sneaking suspicion that new cars were getting more expensive. Now you have the studies to back up your theory. Be smart and diligent to choose wisely and stay on budget. And check back here for all the new car stats you need to make the right buying decision.
