New car buyers are finally getting a break
Buyers of new cars are finally catching a break after years of sticker shock.
Prices hit new heights earlier this year thanks to supply chain snarls brought on by the pandemic, but those average prices paid for new vehicles are now falling.
Consumers paid an average of $45,600 for a new vehicle in October, according to an estimate from J.D. Power. That’s down from more than $46,000 in July, which set a new record.
An increase in inventory helps explain the moderation in prices, said Ivan Drury, director of insights at Edmunds.com.
“Now that we have more availability on the market, you can actually get a car without having to wait nearly as long. We’re not gonna have as many people bidding on the exact same vehicles,” he said.
The reason prices haven’t declined more significantly is that there’s still a lot of demand. But that’s changing, too, as elevated prices now combine with higher interest rates, said Mike Ramsey, automotive analyst at Gartner.
“It’s actually pulling demand down because the affordability of cars has gotten so bad that it’s taking people out of the market,” he said.
That could lead to prices falling more than they have so far, which is the goal of raising interest rates in the first place, Ramsey noted.
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