(CNN) It has almost never been as difficult to buy a new or used car in the United States as it is today, despite improving supply issues and inflation starting to stabilize.
According to recent data from the Bureau of Labor Statistics, vehicle transaction prices—the price you actually end up paying after any dealer rebates or benefits—have risen more and faster since 2020 than at any point in more 35 years old
Consumer price indices for new and used cars (the average changes in the transaction price of vehicles over time) are much higher in 2019 than they were four years ago.
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There is a silver lining. BLS data shows that used car inflation has cooled as dramatically since December 2022 as it rose in previous months. But used cars have a long way to go before they approach 2019 sale prices, and new car prices have yet to slow down.
The average transaction price of a new car has risen nearly $12,000 in the past five years, according to data from the auto website Edmunds.com. For used cars, the average transaction price is still nearly $9,000 higher than it was in February 2018.
“[Prices are] going down a little bit, but not as fast as you might expect,” said Ivan Drury, chief information officer of Edmunds.com. “If you look back, or if you’ve ever made a transaction before in your life. , all these numbers are bad.”
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Car buyers haven’t seen price hikes like these since the 1970s and 1980s. What makes the 2020s unique is how much car prices rose in a short period of time. During the worst 12 months of the used car market pandemic, the index rose by 45%. There has never been a 12-month period since the BLS began keeping records in 1947 when used car prices have been more inflated.
Recent price trends have been similar across regions of the United States, although in some areas, starting prices may be higher than in others. Preferences for more expensive vehicles in some areas drive these regional differences, Drury said.
There’s a big market for pickup trucks and SUVs in the South, he said, where BLS data shows new car transaction prices have risen the most since 1987.
The average price of a large pickup truck nationwide was $62,430 in 2022, according to Edmunds.com. The average price of midsize cars was just $31,381.
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The road to more reasonable prices for new and used cars remains bumpy.
Consumer tastes have shifted toward larger, more expensive pickup trucks and SUVs. New car buyers are chock full of options, compared to the smaller models available a few years ago. Both trends drive up prices and also create incentives for automakers to produce more expensive rides. The second-hand market is still affected by the drop in leases and car rental companies competing with consumers for the same limited supply of three- to five-year-old vehicles.
“We have some things that really hinder the American market,” Drury said. “I don’t see these going away anytime soon.”
