The average new car in the US now sells for close to $50,000. Prices jumped during the 2021 chip shortage and never came all the way back down.
In this article
- Buyers moved up the range
- Loans cost more
- The cheap end shrank
Buyers moved up the range
Trucks, SUVs and higher trim levels carry bigger margins, and that is what people have been choosing. The average price rises even when no single model changes much.
| Factor | Effect on price | Who feels it most |
|---|---|---|
| Richer trim mix | Raises the average | Everyone |
| Higher loan rates | Raises monthly payment | Financed buyers |
| Fewer entry models | Removes the low end | First-time buyers |
| Longer loans | Lower payment, more interest | Budget buyers |
Figures are approximate and change as rules, prices and technology change.
Loans cost more
Interest rates on new-car loans sat well above 7 percent for many buyers. A higher rate adds hundreds of dollars over the life of a loan.
The sticker price is the opening line of the conversation.
The cheap end shrank
Several carmakers dropped their smallest, cheapest models to protect profit. First-time buyers now have fewer new cars under $25,000 to pick from.
What to watch next
- Get a loan pre-approval before visiting the dealer
- Compare the out-the-door price, not the monthly payment
- Look at one-year-old used models
- Ask about manufacturer rate offers on older stock
Practical tip
A 72-month loan can look cheap per month and cost thousands more in interest. Ask for the total interest figure in writing.
Bottom line
Prices will not fall back to 2019 levels soon. Buyers with flexibility on trim and timing save the most.
Specifications, prices and rules change. Confirm current details with the manufacturer or the relevant authority before you buy or repair.
