The Average Car Payment is Skyrocketing

It’s a bird. It’s a plane. It’s your monthly car payment. Sadly, this statement is true for both new and used vehicles for sale.

The average monthly car payment is reaching all-time-high levels. According to a report by Cox Automotive and Moody’s Analytics, new vehicles are becoming less affordable. Prices continue to climb for the fourth month in a row. Car shoppers can now expect an average monthly car payment of $712.That’s a 12.6% increase over the last year.

New cars aren’t the only automobiles experiencing this trend. Used vehicles have also seen price hikes over the last 12 months to the tune of 16.1%. In some cases, used vehicles are even more expensive than their new counterparts.

Not Enough Chips To Go Around

One of the most significant factors in the increase of vehicle prices is the shortage of semiconductor computer chips. Modern vehicles use these computer chips to run everything from a simple radio to a luxurious massaging seat. The shortage of these chips impacts the production of new cars, which increases competition for fresh models. When there’s competition for something in limited supply, prices will go up.

With new cars being less available, car shoppers are turning towards used vehicles. The cycle continues as high demand pushes prices up and out of reach for some shoppers. The price gap between a new and used vehicle is closing as demand rises.

Used vehicles like the Mercedes Benz G-Class actually cost 21.5% more than a new version of the same car. Pre-owned options like the Chevy Corvette, Suburban, & Trailblazer, Toyota RAV4 Hybrid, and Porsche Taycan are all over 10% more expensive than their new counterparts.

Car-Shopping Strategy In This Crazy Market

While the price for both new and used vehicles seems to be stabilizing, it might be a while before things go back to normal. The rate at which car prices are rising should slow down, but there’s no evidence that prices will go down any time soon.

For some shoppers, waiting is the best bet to surviving the current market. Sadly, that’s not an option for every car buyer out there. Many shoppers may have to adapt their expectations to go home with a good deal. That might mean expanding which models and years are on your wish list.

In some cases, it might be worth pre-ordering a brand new car and waiting for it to arrive versus buying a used car with a higher price. If you do have to buy something right now, stick with brands and models that offer great value and longevity. Both new and used vehicles have to be considered more of an investment than they used to be.

This post may contain affiliate links. Meaning a commission is given should you decide to make a purchase through these links, at no cost to you. All products shown are researched and tested to give an accurate review for you.

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