In the midst of a tricky economic downturn, Americans are finding it more difficult to buy new cars, according to new data from Cox Automotive and Moody’s Analytics.
The price paid for new vehicles rose by 1.6 percent in June, while interest rates on car loans have risen in recent months, pushing the estimated typical monthly payment to a record high of $730.
Those looking to buy a new car would need to spend an average of 42.2 weeks of income purchasing one, the report noted — up 17 percent from June 2021.
Jonathan Smoke, the chief economist at Cox Automotive, noted in a statement that the majority of new vehicle buyers have high incomes, undeterred by the effects of sky-high inflation and interest rates. “With this group, vehicle availability and low inventory is a bigger hurdle than vehicle prices,” he said.
Still, typically, most car buyers borrow at least some of the purchase price. And national data shows that few cars have been spared by the growth in costs.
Inflation sits at a four-decade high of 9.1 percent, and used cars and trucks are 7.1 percent more expensive today than they were a year ago, according to the Bureau of Labor Statistics. Thats on top of prices that had quickly climbed in the early months of the pandemic. Even last fall, the going rate for previously owned vehicles was up by over 40 percent, with the average listing price edging above $30,000, according to the online platform CarGurus.