In this Liberty Nation article, Andrew Moran reports that buying a new car has become dramatically more expensive, with record prices, high interest rates, and stretched-out loans pushing ownership further out of reach.
- The average price of a new vehicle sold in September topped $50,000, according to Kelley Blue Book, and buying a new car now costs about 30 percent more than it did in 2020.
- Bankrate estimates the interest rate on a 60-month new-car loan sits firmly above 7 percent, while Edmunds says the average monthly payment on a financed new automobile reached a record $787 in the third quarter.
- The New York Federal Reserve reported that auto loan debt surpassed $1.71 trillion in the second quarter.
- A record 26 percent of new-car buyers took out a seven-year loan in the third quarter, up from 22 percent a year earlier; Edmunds noted borrowers paid almost $10,000 in interest over the life of the loan, a new record, while financing nearly $45,000.
- Edmunds director of insights Ivan Drury said a longer term may be the only way some shoppers get the vehicle they need, but warned against using it to justify a car that does not make sense for the total cost.
- New-vehicle sales still rose almost 5 percent year-over-year in September to more than 1.3 million units, with full-year sales projected near 16 million; Edmunds head of insights Jessica Caldwell said buyers are allocating more of their budgets, stretching terms, and shopping financing more aggressively.
- Moran notes that as vehicle, insurance, gas, and maintenance costs rise, younger Americans are increasingly forgoing licenses and ownership altogether.
Read the full story:
https://www.libertynation.com/even-buying-a-car-requires-an-arm-leg-and-kidney/
