The average price of a new car in the United States has reached an all-time high of $47,148. That’s a 12.6% increase from just one year ago and a whopping 41% increase from five years ago, and most car dealers are not discounting MSRP. So what’s going on here?
So, why are consumers still buying cars despite these high prices?
There are a few reasons.
- The need for transportation. For many people, a car is a necessity. They need it to get to work, school, or other important appointments. And in some parts of the country, public transportation is not a viable option.
- The rise of ride-hailing services. Ride-hailing services like Uber and Lyft have made it easier than ever to get around without owning a car. However, these services can be expensive, mainly if you use them frequently.
- The desire for comfort and convenience. Cars offer comfort and convenience that other forms of transportation cannot match. You can drive yourself wherever you want, whenever you want. And you don’t have to worry about being on someone else’s schedule.
- The fear of missing out. If all of your friends and family have cars, you may feel like you’re missing out if you don’t have one yourself.
The high price of cars is a major concern for many consumers. But for now, it seems that the demand for cars still outweighs the high prices.
Here are some tips for buying a car in a high-priced market:
- Do your research. Before you start shopping, take some time to research different models and brands. This will help you narrow down your choices and better understand what you’re looking for.
- Be prepared to negotiate. Don’t be afraid to negotiate with the dealer on the price of the car. You may get a better deal if you’re willing to walk away.
- Consider buying used. Used cars are typically more affordable than new cars. And with so many used cars on the market, you will surely find one that meets your needs.
- Look for incentives. Many dealers offer incentives, such as rebates or low-interest financing, to help consumers save money on new cars.
Demand for new cars is expected to decline in the second half of the year, forcing dealers to become more aggressive. The other issue is that car repossessions are increasing as the average monthly car payment is over $780.
Marketers sometimes get big-headed when it comes to their brands. They believe that the demand for their brand will continue despite poor service and high prices. That’s a massive mistake, as Kia will eventually find out.