If you’ve had the urge you will never be able to afford a new car what you really want, you are not alone. The Washington Post recently investigated what is happening with the lack of affordability of new cars, and you’ll be happy to hear that, yes, new cars are basically only for rich people now. What a pity
In case you missed it:
In 2017, if you wanted a car that cost less than $20,000, you had 11 options. Fast forward to March 2023, and that list had been whittled down to just two. The average price of a new car is now more than $48,000, up 30 percent over the past three years. And while there are plenty of cars with a base price under $48,000, they’re still hard to come by as automakers facing a microchip shortage have mostly focused on building high-end versions most profitable of their cars.
In fact, while automakers sold about three million fewer cars in 2022 compared to 2019, their profits were $15 billion higher because what they sell is more expensive.
“When you do the math on what that means for the median household, it’s essentially pricing the median completely out of the new vehicle market and leaving higher-income households who disproportionately have more wealth, better credit, and , as a result, they can afford even more expensive vehicles, so the migration even accelerates at those price points,” said Jonathan Smoke, chief economist at Cox Automotive. Washington Post.
And while you’d think dealers would be happy to sell a bunch of more profitable models, that’s not necessarily the case. After all, the supply of rich people is not unlimited and there is no guarantee that they will be able to sell the expensive models they receive.
“We have a final edition Dodge Challenger for $80,000 or $90,000,” a dealer told the Washington Post. “We don’t want another one.” They later added: “I’ve got a few that are so expensive I’d do anything to get them out of the lot. I’m just pricing people to just break even. I’m so desperate to throw these away expensive things because it hurts us.”
So you might be able to get a deal on the $90,000 version of a $30,000 car, but that doesn’t mean much to regular people who can’t afford a $700 monthly car payment, and much less one that is over $1,000. But hey, maybe if you work hard, you’ll get a three percent raise next year and still not be able to afford a new car.
There is much more to the article, then be sure to read the rest here.
