Record monthly payments: US consumers feeling sting of higher car prices
SAN FRANCISCO (CNN/KPIX) - We are facing higher prices for almost everything these days - including cars.
With spiking interest rates alongside other factors, these are challenging times to be in the market for a new vehicle.
In California, Roland Pahud says he is currently in the market for a new car. He said he was looking for a larger vehicle.
“I have another car with a lot of mileage, and I need a bigger one,” Pahud said.
Pahud has been looking at a Jeep Wrangler with a sticker price of about $50,000. He says the total would translate into about $800 a month for payments.
According to Kelley Blue Book, those monthly payments would be above the national average of $712.
“This is a new record for monthly payments, and new car prices are actually nearing records,” said Matt Degen, senior editor at KBB.
According to the numbers, new car prices have gone up 12.6% in the last year, with used cars up 16.1%, food at a 10.1% increase, and gas up 48.7%.
But higher gas prices are not necessarily deterring potential car buyers.
“Demand is high, supply is still low, and we’re still in the chip shortage era,” said Raed Malaeb, general manager at Russell Westbrook Chrysler Dodge Jeep Ram.
Current market conditions and higher interest rates are continuing to make it difficult for buyers.
“We don’t see prices decreasing much, and even if they do, keep in mind that interest rates are rising. So, the cost of borrowing money is going up, meaning you’re still going to be paying as much or nearly as much as you were even if prices go down,” Degen said.
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