Car Prices Are Unsustainable for Buyers

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If I were a conspiracy theorist, I’d say the Democrat administration is deliberately putting the price of cars out of the reach of the middle class. The Wall Street Journal today reported that car prices might be unsustainable.

Instead of a dozen new cars selling for under $20,000, we now only have one, the spartan Mitsubishi Mirage hatchback, which accounted for about 5,300 of the 7.7 million new vehicles sold in the U.S. in the first half of the year.

“If you are willing to spend more than $100,000, you can choose from 32 models. For the average American, paying off a new car at current prices demands 42 weeks of income, according to data from Cox Automotive, up from around 33 before the pandemic,” the Journal reports.

You would be hard-pressed to find a bargain in the used car lots. The average used cars sell for $27,000, up 30% from the pre-pandemic levels.

Higher interest rates have made the situation even more difficult for buyers. “Today’s average new car loan has a monthly payment north of $750, with an interest rate of 9.5%. For used cars, the average rate is above 13.7%, according to Cox. The average term for loans issued over the past three years is nearly six years, according to data from Experian.”

If you have $100,000 and can pay the car off in cash, you won’t have a problem.

Thanks, Progressives.


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