There’s only 1 new car left under $20k
Sourced from “The Hustle” daily newsletter on August 22, 2023:
Car-buying wisdom if you’re trying to save money: “Stick to public transit.” But if the bus simply isn’t your thing (or available), brace for a budget-shattering event: Cox Automotive found the Mitsubishi Mirage was the only new model going for less than $20,000 last month.
The humble hatchback may make your mom’s Prius look like a racecar, but its $19,205 average selling price in July really does resemble a mirage in the heat of the auto market.
Cox reports:
A middle-of-the-road new car cost over $48,000 in July, up 30% since 2019.
And used cars were no better. The average July price was $27,000, also a 30% hike from 2019.
The pricey four-wheeled boxes most Americans rely on to get places have been straining family budgets. It takes over 42 weeks of median household income to cover the average cost of a new car, per July data supplied by Cox and Moody’s Analytics.
On top of high prices, high-interest auto loans also burden auto owners. Last quarter, a record 17.1% of new car owners had a monthly payment above $1,000, according to Edmunds. This helps explain why auto loan delinquencies have been rising this year, despite a strong economy with exceptionally low unemployment.
America’s obsession with supersized rides is partially to blame for the high prices since carmakers have ditched affordable compact vehicles. Pandemic-related supply chain snags also threw a wrench into production, creating a car shortage that let auto producers slap exorbitant price tags onto windshields.
But…despite the lack of cheaper models on the market, new car prices have slowly begun to fall as dealers report having more cars sitting on their lots. EVs are getting discounted the most as manufacturers engage in a price war.
