Average new car price is $50K ? Insanity.

[missingcurlybracket]

I wonder what the median is.

New cars are increasingly becoming a rich(er) person's buying area and that demographic would likely be spending more anyway, with luxury vehicle's cresting six figures easily, I wonder how much those are skewing the average.

 

[dlundblad]

Our first vehicle was about this, but we saved a lot too. I still DD and old vehicle and I’m fine with it.

In terms of Toyotas, my brother was vehicle shopping in 2017 and could have gotten a fairly loaded Tacoma for 32. That model is about 10k more now.

 

[dnewton3]

The article wasn't specific, but I am sure he's factoring in all those fancy expensive SUVs that have swayed the average away from the bread-and-butter sedans.

Part of the issue is that there aren't many (very, very few) "bread and butter sedans". There are a few econo-box cars, but the vast majority of "cars" (sedans and coupes) are a thing of the past.

Price out a car and a similar SUV and the SUV is WAY more expensive (because the market accepts the price hike). So when the market is willing to pay for the more expensive product, why make the cheaper ones? Ford has no cars left (Mustang excluded, but that's a niche car and not a pratical sedan). I lament the market death of good, basic sedans. Only a few survive, and I suspect their time is short.

Anyway, my point is that the "average vehicle cost" is going up partly because all vehicle prices are escalating, but also partly because the "lower end" bargin cars just are few and far between, so they have less downward pull on the "aveage" price.

 

[SubieRubyRoo]

Not far from where I live, there are ENTIRE TOWNS where the average home price is barely $50k. This bubble is going to be worse than the housing bubble, and in some ways I think it’s being encouraged by certain groups of people on purpose. When people lose their modes of transportation due to repossession and have that huge remaining balance hanging over their heads, the only way they can get around is public transportation. And that means moving into the city. Which means you’re dependent on “public” services for your existence…

 

[joekingcorvette]

Vehicles are very expensive however you can still buy a brand new Civic or Corolla for about $25,000 and still obtain close to 40 miles per gallon. People need to live within their financial means and this is true when buying houses or any financial decisions in life. At least you can buy lots of vehicles for under MSRP right now hahaha.

 

[Jimmy_Russells]

$900.00 per month for 14 years.

Insanity.

I'm thinking there was some sarcasm since $900 per month for 14 years is over $150,000

Manufacturers are leaving the low end of the market to used cars. Not sure we'll ever go back.

 

[Vil_Riker]

Exactly. Cars are depreciating assets; consumable assets. Finance teaches do not put money into depreciating assets; put money into appreciating assets.

That's not finance teaches. An asset generates returns whether it depreciates or appreciates. A car can generate returns as well even if it depreciates - in most circumstances you can't sell your labor without transportation.

 

[wag123]

IMO when middle class working people run out of money and can no longer afford to buy their products, the auto industry will get real in a hurry. That day is rapidly approaching.

 

[Fabulous50s]

A vehicle which I need a loan for...is o e which I cannot afford.

Homes should be the only personal debt people have.

Imagine..... good financial responsibility.

Business assets are another story, but that isn't the point here.

 

[dlundblad]

I take back what I said. 32k in 2017 to 45k now. This is the dealer we bought our 4R from. They didn’t charge us any fees and were mostly middle of the road in terms of reasonableness.

 

[Joe1]

I've noticed that a large percentage of 20 something youngsters eschew the Civic and Corolla type cars in favor of trendy SUVs, Lexus, BMW, etc. This contributes towards the $50k avg cost.
I don't know how they juggle student loans, sky high rent costs, expensive cars etc.

 

[dogememe]

Yeah I’d be far more curious about median price vs the average price.

 

[CKN]

If you notice the number of guys even buying "new to them" beaters on this site has dwindle to almost zero. Most (of the few) new vehicle acquisitions on here have been late model. Not sure what that means.....

 

[CKN]

A vehicle which I need a loan for...is o e which I cannot afford.

Homes should be the only personal debt people have.

Imagine..... good financial responsibility.

Business assets are another story, but that isn't the point here.

Then-what are your chances of ever buying a late model used car? For example-pickup trucks are up $12,000.00 to $15,000.00 in the last three years. Who can save that much-that fast?

 

[CarbonToast]

Buy what you need vs. What you want. Base models have power everything but for some reason people option up thousands of dollars to get a decked out KIA...

 

[JeffKeryk]

Part of the issue is that there aren't many (very, very few) "bread and butter sedans". There are a few econo-box cars, but the vast majority of "cars" (sedans and coupes) are a thing of the past.

Price out a car and a similar SUV and the SUV is WAY more expensive (because the market accepts the price hike). So when the market is willing to pay for the more expensive product, why make the cheaper ones? Ford has no cars left (Mustang excluded, but that's a niche car and not a pratical sedan). I lament the market death of good, basic sedans. Only a few survive, and I suspect their time is short.

Anyway, my point is that the "average vehicle cost" is going up partly because all vehicle prices are escalating, but also partly because the "lower end" bargin cars just are few and far between, so they have less downward pull on the "aveage" price.

Yes, and where are the strippies? Companies don't want loss leaders, they want to sell top of the line. I think Honda got rid of the DX level.
What scares me is, young people geting saddled with debt. Then there's rent, groceries, etc. And college loans...
Debt terrifies me. How do you get out from under it? Parents don't understand personal finance, students are not taught personal finance and companies take advantage of them.

 

[macarose]

I study the new and used car markets for over 15 years now, and I'm very confident in saying that we will hit $40,000 well before we ever hit $50,000.

The current average new car price is $45k. With the exception of Toyota, most dealers now have a lot more vehicles to sell, but interest rates have made a lot of the higher priced ones a lot less affordable.

If EVs become wildly successful, which remains uncertain, you may see a $50k average but then you would have to factor out the portion that is negated by the tax credit.

I recently wrote about the fact that small cars are becoming extinct in the USA. That is true. We're down to four and I don't really see the Versa, Rio, or Mirage surviving another generation although the MINI Cooper may hold onto its premium small car niche.

My advice? As a dealer who has covered the used car market for nearly 15 years now, is to wait until EVs become cheap. That will happen within the next five years. Then keep your ICE vehicle for long trips and bad weather. We're still at the very beginning of a long journey that will see our industry become consolidated and less profitable than ever.

 

[JeffKeryk]

I study the new and used car markets for over 15 years now, and I'm very confident in saying that we will hit $40,000 well before we ever hit $50,000.

The current average new car price is $45k. With the exception of Toyota, most dealers now have a lot more vehicles to sell, but interest rates have made a lot of the higher priced ones a lot less affordable.

If EVs become wildly successful, which remains uncertain, you may see a $50k average but then you would have to factor out the portion that is negated by the tax credit.

I recently wrote about the fact that small cars are becoming extinct in the USA. That is true. We're down to four and I don't really see the Versa, Rio, or Mirage surviving another generation although the MINI Cooper may hold onto its premium small car niche.

My advice? As a dealer who has covered the used car market for nearly 15 years now, is to wait until EVs become cheap. That will happen within the next five years. Then keep your ICE vehicle for long trips and bad weather. We're still at the very beginning of a long journey that will see our industry become consolidated and less profitable than ever.

The Tesla Monterrey plant will be up and running sometime later next year. They have learned how to minimize cost and accelerate the mfg lines. The EV economy car is imminant.

 

[Fabulous50s]

Then-what are your chances of ever buying a late model used car? For example-pickup trucks are up $12,000.00 to $15,000.00 in the last three years. Who can save that much-that fast?

I can buy plenty of USED pickup trucks for $15k total....

Stop buying new vehicles, if the price is more than you can write a check for.

 

[Aredeeem]

Try living with someone who means well but…My 2012 Versa just threw a MAF sensor code. I’m already thinking I have to clean it or worse case scenario replace it for about $200. My bride chimed in with “ maybe it’s time to look for a new car.” Don’t think so.