Forgot to get a deal; Today, anyone in the market buying a new car can pay thousands of dollars off the sticker price before they drive down the lot.
Limited inventories due to ongoing shortages of computer chips, along with other supply chain challenges, have helped push up new car prices, according to the latest data from the U.S. Bureau of Labor Statistics. 10% from a year ago.
For new cars, the average transaction price is estimated at $46,259 in August – the highest on record, according to JD Power/LMC’s own forecast.
And now, as demand continues to outstrip supply, Dealers are even charging premiums compared to the manufacturer’s suggested retail price for new vehicles, according to car shopping site iSeeCars.
“Consumers are willing to pay more than list price for new cars because inventories are so scarce and because they know new car prices won’t improve,” said Karl Brauer, executive analyst at iSeeCars. until 2023 at the earliest”.
Some cars are marked up to 24%
New Jeeps are on display at a car dealership in New York City on October 5, 2021.
Spencer Platt | beautiful pictures
“The market is pretty brutal in terms of pricing,” says Brauer.
According to a recent iSeeCars analysis of 1.9 million new car listings, the average new car costs 10% more than the list price.
According to iSeeCars, the car with the biggest increase in price is the Jeep Wrangler, which is currently selling for 24% over MSRP, or about $8,433 above retail.
Some of the requested luxury SUVs will also see price increases of at least 20%, including the Porsche Macan, Genesis GV70 and Lexus RX.
“These are vehicles that people buy because they want to have fun on the weekend, and they are less susceptible to rising prices,” says Brauer.
However, “if you’re in a situation where you need a car to serve your basic needs,” Brauer advises car buyers to “research and compare prices between multiple dealers,” even if they’re at the dealership. far”, and in some cases, marking can be avoided by ordering directly from the manufacturer.”
Car loan costs are also higher
At the same time, financing any type of vehicle is becoming more expensive, as the Federal Reserve’s rate hike cycle pushes up costs. Auto loan.
According to the latest data from Edmunds, the average annual percentage on a new car hit 5.7% in August, and is likely to be higher.
More from Personal Finance:
How high inflation can affect your tax bracket
5 ways to save money amid record food price inflation
Here’s what to expect for both new and used car prices
Edmunds experts say paying an annual percentage rate of 6% instead of 5% will cost consumers an extra $1,348 in interest over the course of a $40,000 car loan, over 72 months. consumers have higher credit scores can often secure better loan terms.
“Shopping for better rates through financial institutions can be helpful, but low-interest or zero-interest loans through the automakers’ fixed-finance company can also help.” makes the difference when it comes to saving money and can ultimately lead to a decision to buy a vehicle over another,” said Ivan Drury, chief information officer at Edmunds.
