Cars haven’t been able to get around inflation: The price of new vehicles jumped 10.1% since last August, while used cars and trucks were 7.8% more expensive. How much are we talking? The average cost of a new car came out to $48,301 in August, which was a new high. Fancy something fancier? It won’t be cheap. Last month, luxury car buyers paid $65,953 for a new ride.
You might spend more green to go green: The average sticker price for a new electric vehicle is around $66,000, and it’s gone up 16% since last year. Why? Rising costs of lithium – needed for EV batteries – and a low supply paired with high demand are some factors that are driving up prices. But that’s not stopping some drivers from going electric: In August, sales of EV cars were up 79% from last year. And the recent incentives from the newly passed Inflation Reduction Act – a federal tax credit of up to $7,500 for a qualifying new EV – could nudge more drivers to make the switch from gas.
Deal or no deal: In the car world, it’s more like no deal, as incentives for cars are at record lows. In 2019, drivers could score around $4,500 in stimulus compared to about $1,117 last month. Dealers may not be offering as much stimulus because supply is pretty tight, but our colleagues in Global Investment Research think that supply chain woes could start to improve in the next few months.
Thankfully, prices at the pump have dropped: There’s one car-related cost that’s eating up less of the budget. After gas prices in the U.S. reached $5.02 per gallon on average mid-June, they’ve been steadily dropping. The latest CPI numbers show that gas prices fell 12.2% in August.
Hard pass on the extras: Heated seats? Sun roof? Hitting unsubscribe. To deal with the rising costs of owning a car – including higher interest rates – our colleagues say that future car buyers may be ditching the premium add-ons to help keep car costs low. PS: The average monthly payment for a new ride is already nearly $700.
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