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Despite Inflation And The Cost Of Gas, Car Prices Reach A Record High
Used cars are displayed on the sales lot of a dealer in Corte Madera, Calif. New and used car prices have surged since the pandemic.
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Justin Sullivan
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Getty Images
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David Duarte and his father walked into Cerritos Auto Square on Thursday morning to get a new car. The Norwalk residents had settled on a Toyota Corolla Cross, a compact SUV that’s selling for almost 8.5% more than last year.
The family purchased the car on July 4, but had to wait 10 days for it to get shipped from Florida.
Pandemic-related supply issues and strong customer demand mean that dealers can sell cars at or above the suggested retail price. And like Duarte, buyers may have to wait to take their cars home.
On average, buyers are paying more than $48,000 for a new car, according to new data released by Kelley Blue Book. Consumers also have to account for inflation rates that are now at their highest in 40 years and record-breaking prices at the gas pump.
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Duarte had a lot of research to do.
Did the rising cost of living make the family think twice? Not really, said Duarte. His family needs a car to get to work, so they couldn’t wait for better market conditions.
Their previous car had a faulty engine and other issues, and they were tired of going back and forth with the dealer to try and get it fixed. Instead, they traded it in to get their new car.
“The dealer doesn't always give you the best financing options,” he said. Duarte had conversations with three banks before settling on one that gave him the best interest rate.
Federico Gutiérrez, a resident of Downey, also spent months researching before recently buying a car. But to save money, he got it used: a 2019 Jeep. Even so, he’s paying about $600 a month for the car, along with $120 per week on gas.
He considered waiting to make the purchase, but he kept seeing prices go up. “I felt like if I didn't get it now, it was going to be way too much later on,” he said.
Predicting when prices will go down is difficult, but shopping around for the best interest rate can help take the sting out of higher prices. And if you're in the market for a Buick, Dodge or Lincoln, you're in luck, according to Kelley Blue Book — those cars are 1.9% cheaper than last year.
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