What’s really driving up new car prices, according to new report

(InvestigateTV) — Affordability is on the forefront of all consumers’ minds in this economy, according to a new report on vehicle pricing.

Daniel Greene, senior director of consumer protection and product safety at the National Consumers League, said growing concern about vehicle affordability spurred the group to take a closer look in its new report, "Sticker Shock."

“And some lawmakers are making the claim that, well, in order to make vehicles more affordable, we actually have to weaken federal fuel economy standards and safety standards because we think that’s increasing vehicle prices,” Greene said. “We looked at the data, and we found that if you want to make vehicle ownership or vehicle affordability better, the worst thing you can do is weaken federal fuel economy and safety standards.”

What’s really driving up prices

In their 71-page report, the National Consumers League found federal safety standards and fuel economy standards make up just a small share of the increase in vehicle prices.

The report points instead to a mix of other factors, including more expensive vehicle types, higher-end features, dealer markups, and automaker costs and margins.

Greene also said the cost of vehicle ownership, like fuel, insurance, maintenance and repairs, can add up well beyond the sticker price over time.

“So, cost conscious consumers who are now going to see gasoline prices exceeding $4 a gallon, there’s going to be a shift towards more fuel-efficient vehicle, hybrids, perhaps even electric vehicles as the only alternative to really avoid gasoline prices,” Greene said.

What consumers can do

Greene said consumers should start by maintaining their current vehicle, which can help delay a costly purchase.

Consumers can also look at the used market, where there may still be some deals depending on where you live.

And while consumers may not control pricing, they can control how they shop. Set a clear budget and focus on the features you actually need, not the ones that drive the price higher.