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Average new car transaction price hits a record $48,043

• kube-system 4y ago
  > Strong luxury share – at 18% of sales – helps push the industry average price higher. I bet people who would have otherwise bought cheaper options are buying whatever they can get. In years past many of these cars probably sat on the lot for a year and sold at a healthy discount.
  • shotta 4y ago
    One of my friends had to buy a new (to him) car out of necessity. He decided to buy the only new car on the lot. He was bragging. Great deal. Here’s the catch.. it requires premium. He didn’t know that. The dealer made sure not to volunteer any extra info. He’s keeping those miles low.
    • edmcnulty101 4y ago
      The car requires premium gasoline? Is that a thing? edit: Thanks for the info. Did not know that. I've always had piece of shit cars that could probably run on McDonald's french fry oil. :)
      • burnt_toast 4y ago
        Yup, some engine's are designed for it. Usually for performance reasons if the engine is boosted or high compression.
      • bovermyer 4y ago
        Some engines require higher octane gasoline, yes. You can use lower octane in it, but you're going to hurt the engine.
      • sonofhans 4y ago
        It’s been a thing. My car is 20 years old and requires it. Engines with higher compression require higher octane fuel to reduce pre-detonation and pinging. Using low-octane fuel in one of them can cause game-ending physical damage to the engine. Many more modern cars can sense lower-octane fuel and adjust for it, at the cost of power and efficiency (i.e., mileage).
      • kelseyfrog 4y ago
        Yes, I have a car which requires premium gasoline. Though I haven't tried putting in regular, my understanding is that doing so would induce knocking.
        • Sebb767 4y ago
          A car with knock sensor will detect lower-quality fuel and pull back timing. This will usually limit your power, but not damage your car. My car manual even explicitly states that it won't affect engine lifetime. Full disclosure, I still use premium anyway because I want to keep the car for a long time and I don't fully believe this disclaimer.
        • camhenlin 4y ago
          Generally you'll get worse fuel economy due to the ECU and knock sensor detecting the lower grade fuel and pulling ignition timing out. It's unlikely you'd even save money at the pump
      • zdragnar 4y ago
        The octane rating you see on gas indicates the pressure at which gasoline will combust. Engines tuned to a higher compression to ignite require higher octane level gasoline. Using something other than what the engine is tuned to might put a lot of extra wear or degrade performance of the engine.
        • datavirtue 4y ago
          The gasoline will ignite before it is supposed to, forcing the piston back down before it has travelled all the way to the top of it's stroke. The engine will destroy itself. You can hear "knocking" coming from the engine when this is happening. It's worse than it sounds.
          • zdragnar 4y ago
            I know this is definitely true of older engines that aren't controlled by fancy software, but I suspect at least many consumer cars are capable of adjusting to the difference. I could be wildly wrong here though, and wouldn't want to test it myself.
            • kube-system 4y ago
              Knock sensors are standard on every car made by a global automaker since the early 90s when fuel injection became universal
      • dumptruk 4y ago
        Some vehicles, especially ones with OEM performance tuning, run high compression ratios or forced induction. Higher octane gas allows for more compression within the piston before ignition. I had a 2003 Toyota Matrix that redlined at 9100 rpm and used their fancy Toyota variant of VTEC that would dynamically swap the camshafts on the engines past a certain RPM. Although the engine was naturally aspirated (no turbo), it had the compression ratio of 11.5:1, which is pretty high for an economy vehicle (1.8L)
      • jakear 4y ago
        All the comments are giving unequivocal yes’s, I’ll note that some cars (my buddy’s Subaru) will say they require premium but work just fine without. Currently going 240k miles still strong.
      • deleted 4y ago
        [deleted]
      • fragmede 4y ago
        In case you're being facetious, old Mercedes diesel cars can literally run in old MacDonalds french fry oil with a tiny bit of modification.
    • deleted 4y ago
      [deleted]
    • pc86 4y ago
      I like how you say "the dealer made sure not to volunteer any extra info" as if this was a secret and the dealer somehow scammed your friend into buying a brand new car at the height of a chip shortage and record high car prices. The lifetime difference of premium gas financially is next to nothing.
  • lijogdfljk 4y ago
    Yea, the climate has me concerned if i need to buy. My current is a 2014 Toyota Prius, bought new and drive little. I had wanted to get another 10 years out of it, but now i feel like i need to get another 10 years out of it. This climate is crazy. I love this car though. $24k with no interest, been fully paid off for a long time - was a great buy and has been rock solid. I hope i can get a deal this good in the future..
    • haliskerbas 4y ago
      I went to every Toyota dealer near me a few months ago. They only had one or two of each model of car in stock. They had random colors and expensive packages (the extra extra ones like random trunk hardware, not just the tech package for sensors) and then after all this up specced with no color choice, they wanted 10-15k USD on top just cause “someone else is ready to buy it if you aren’t”
      • localhost 4y ago
        I'm waiting on a Corolla right now. Found a dealer who will sell for MSRP. But ... there are no cars. Every Corolla that you see on Autotrader as new right now, with few exceptions, was sold months ago and they're using the listing as an ad to attract folks like me to go on a waiting list. Crazy.
      • lijogdfljk 4y ago
        Oof. Yea and when i bought mine, the 0% interest indicated that they were trying like mad to get rid of them.
    • francisofascii 4y ago
      I have a 2012 Prius with high mileage going strong. Bought used in 2013 for $17K when gas prices were over $4/gallon. A year later, gas prices plummeted and hybrids lost their value. Now finally they are in high demand again, along with everything else. It is crazy how I see the same car being advertised at around the same price I paid back in 2013.
    • tomg 4y ago
  • Spooky23 4y ago
    I think you’re on to something. A colleague got into a car accident and ended up spending way more than he needed to on a luxury car he didn’t want. He has 4 kids. Getting a minivan or suv is difficult unless you are patient or can buy the “Elite Super Touring Edition with Gold Sprinkles”. Car companies are adverting incentives for ordering cars, so I think this is the new normal. They’ve learned from Tesla’s shenanigans that you can get away with anything.
    • corrral 4y ago
      Current minivan market is batshit crazy. We've had dealerships call us up offering thousands more than we paid for our (used) minivan three or four years ago, with 1/3 the mileage it has now. It's basically gone up in value by about as much as it should have dropped in value, in a normal market. I assume they expect to make a profit, so must be pretty sure they can sell it for even more than that. WTF.
      • Spooky23 4y ago
        I was offered $27k in January for a 2016 Odyssey with lowish miles when I got an oil change. It’s wacky. The guy was legit bummed - he told me they were at the point where legit dealers are buying wrecks and cars that need new engines. At the time, they were ordering new cars with projected delivery dates in August.
  • zdragnar 4y ago
    We had the opposite- we had to buy a cheaper trim level than we'd wanted, but even after visiting several dealerships, we ended the day at one that had exactly two new cars available on the lot. There was no point in buying used, because retail prices on used cars was approaching MSRP on a new car.
    • newhotelowner 4y ago
      I think people are getting whatever they can. Specially when they don't have an option.
  • zemvpferreira 4y ago
    I'm in Portugal which has a completely different 'personal economic structure' from the US, so this might not apply: Transaction values and the luxury segment both keep rising here as well. Loking around me it feels like people disregard savings so much AND are take such large loans to buy homes that spending 50k on a new car feels sensible, possible and not a big deal. This in a country where take-home salaries are routinely under 20k/year (net of taxes and health expenses). Money's been so cheap and credit so easy that we seem desensitized to total amounts. Who cares what anything costs as long as you can pay the balance at the end of the month?
• josefresco 4y ago
  This makes sense given that I just read dealerships now make more money from loans than from the car itself. This has driven the industry to make more loans to unqualified buyers and are now starting to see them default. This would partly explain the jump in avg selling price as consumers might not be scrutinizing the cost as closely. I can't find the link now, but basically the advice was to wait (until next year?) to purchase a used car as prices will drop.
  • encoderer 4y ago
    I bought a car in April 2020 when the dealerships were reeling from closures and there were no shortages yet. I knew I had a good bargaining position as one of the few people buying, and I shopped around and tried to get the best deal I could. In the end i drove the car away 20% under the sticker price, but despite coming in with all cash I was asked to finance about 33% of the cost through the manufacturer and keep the note open for 6 months before paying it off. We didn’t go into it, but it was obvious the dealership was getting a healthy commission for that loan, enough that they didn’t mind selling me the vehicle at what I presume is close to their own cost.
    • jaclaz 4y ago
      This could be also due to some (marketing) "target". The manufacturer might impose to a dealer (say) 1000 loans per year, if they meet the target they get an additional discount or a prize, not unlike the targets imposed for sales. At least here (Italy) the so-called "km.0"[0] are very common (of course rarely for models that sell well) the dealers have often some convenience to buy a few cars themselves (they are "sold" vehicles to all effects as seen by the manufacturer) and then re-sell them at a discount (the 20%-30% less than sticker price is not unheard of). Years ago these "internal sales" were driven by fiscal year reports, so you could find the "km.0" only in January/February, nowadays the manufacturers have moved to reports avery 3, 2 or even one month so you can find some discounted cars in every period of the year. [0] these are cars that were registered but never driven
  • treyfitty 4y ago
    They said to wait last year. People who need a car can’t wait forever
• avgDev 4y ago
  The current car market is unsustainable. 96 month loans are becoming common place. It is just a matter of time until people who purchased their cars during chip shortage are massively underwater on their cars. If they have long loans and the cars start having major problems they won't be able to roll negative equity into their next car loan. People are extremely irresponsible with money and cars with high, long time loans are a great wealth destroying 'vehicle'. I think the social media helped fuel the 'I want NOW!' culture. This gave life to scalpers and $10k mark up on cars. I'm interested how all this is going to unfold.
  • HPsquared 4y ago
    I don't know, modern cars have longer and longer lifespans.
    • denimnerd42 4y ago
      Do they? Modern cars are using 0W-20 or lower weight oils solely for MPG/emissions purposes and pushing service intervals on that oil to 1 year for cost of ownership purposes. Then many people are not in the habit of changing their oil due to such long intervals so make that 2 years. Compounding that modern cars tend to burn a small amount of oil due to low friction rings for MPG purposes. I don't think you get long engine life with that recipe. That's not even counting the type of fancy things they are engineering into their engines like turbos, special valves, selective cylinder ignition (reduce V8 to V6 or V4) All that stuff breaks before 100k. It's a modern miracle a turbo last just 100k miles. In the aughts and nineties the extra emission equipment (mostly gas tank vapor emissions) would break after 100k miles, but it wouldn't stop the engine from running. Now it's even crazier stuff that definitely will.
      • verall 4y ago
        Oh come on my '12 Odyssey has all that stuff besides the turbo and is happily approaching 200k miles. I see older Odysseys like '04-'08 on the road approximately all of the time. That stuff does not "all break before 100k". It would be interesting to see MTBF info for these new features, complexity _is_ typically the enemy of reliability, but handwaving based on your feeling isn't it.
• tims33 4y ago
  It would be helpful to see the median price and how that has grown as well. When we got our Subaru repaired recently the dealer said he had 20-30 new Subarus on the lot and normally it is closer to 200.
• yanderekko 4y ago
  As someone who's in the market for a new car but has been put off by "market adjustments" at dealerships, I wish there was better information out there about what sort of price spikes are likely to be transient vs. permanent. Although it seems like the estimates of how transient these price shocks will be have been too optimistic... I did appreciate that the article at least highlighted the segments of the market where there's less inflation.
  • aperson_hello 4y ago
    You can definitely still find dealerships without market adjustments, but you're likely to have to travel inland to do so if you're on a coast.
• newaccount2021 4y ago
• honkycat 4y ago
  I consistently see all of these giant trucks owned by urban portlanders, and all i think is: Wow, what an expensive minivan. I bought a house recently. People were shocked. How can you afford it? Easy. I didn't own a car for years. I took the bus an hour each way. I fought off lifestyle creep, and the 80k they spent on fancy cars over the last decade I socked away waiting for the market to be favorable.
• ab8 4y ago
  Used cars are so expensive that it makes sense to spend a bit more and buy new.
  • nemo44x 4y ago
    Right now is a weird time where buying a used car may be a worse financial decision than buying a new car. Used cars are marked up so high right now that when this corrects later this year, the owner of the used car will have lost so much value from it. Best bet is to stay away from the market all together for awhile, until it all comes crashing down. Then scoop up the bargains.
• mulderc 4y ago
  Looks like I am never going to buy a car.
  • Minor49er 4y ago
    Buy a used car. Rental car companies like Hertz are making this easy because they have a business of buying up new cars, then selling them off after a year or two for a discount. You can get a lightly used car that probably still has a couple of years of warranty life on it without having to destroy your savings
    • CubsFan1060 4y ago
      At least for while this changed. Not sure what things are like now though. https://www.kbb.com/car-news/rental-car-shortage-has-hertz-and-enterprise-buying-used-cars/ https://www.kbb.com/car-news/rental-car-shortage-has-hertz-a...
    • Sebb767 4y ago
      Be careful with ex-rental cars. These things have been abused to hell and back; think full throttle on a cold engine, the cheapest fuel available and a lot of unavoided potholes. On the other side, you know they have been maintained, but expect a lot more wear. You can buy one, but you should know why they are as cheap as they are.
      • kube-system 4y ago
        The worst part about rentals is that they simply get used more than personal cars. They're always being driven by different drivers, in unfamiliar places, loading and unloading a full load of people and baggage. All the knobs and adjustments repeatedly adjusted. Every threshold scraped and scuffed by repeated shuffling of passengers and bags. And while they have a policy of maintaining vehicles, nobody who touches the vehicle has any personal investment in it. Due for an oil change, and it's booked out? Out it goes! I can't imagine how many tires people pop by running into stuff. When I rent with one of the big brands that lets you pick a car off the lot, I usually try to find the car with the best set of tires. It's amazing how many rental vehicles with ~10k miles on them already have 3 or 4 different brands of tire on them. Usually they're the cheapest of cheap brands too.
• mulderc 4y ago
  My decision to only live and work in a place that doesn’t require a car is looking better and better.
  • Someone1234 4y ago
    What places are those where sky-high rent doesn't offset the benefit? I can think of a few places, but rents are $500 more than a mortgage here, let alone rent. The US public transport is shambolic generally, so you're forced to use cars, and the few places that buck that trend (typically major cities), are too popular for their own good. That isn't really a critique, being too popular is a good thing, but in terms of dollars and cents driving might be cheaper than living in a HCOL.
    • mulderc 4y ago
      I live in Eugene Oregon and haven’t needed a car yet. Previously was in Portland and also didn’t need a car even though I lived fairly far from the city center.
    • jlmorton 4y ago
      You're certainly right that there has been major housing inflation in almost all major urban areas with good transit in the US. Still, there are several cities that are still relatively affordable with good transit and walkable neighborhoods. Chicago. Philadelphia. Portland. Pittsburgh.
    • acdha 4y ago
      > What places are those where sky-high rent doesn't offset the benefit? I can think of a few places, but rents are $500 more than a mortgage here, let alone rent. What are average salaries like, though? Cities are complicated because while rent is higher wages are often massively higher to compensate, although telework has complicated this a bit lately. Since cars aren’t any cheaper in low cost of living areas, that baseline cost is often harder to swing on lower income. Not spending the U.S. average of $11+k/year to own a car also gives you an extra thousand a month for rent, which goes a long way even in the most expensive cities, and not needing to pay for parking often allows a hefty reduction in housing expenses in many cases, too, especially with more employers offering cash alternatives to their parking spaces.
• iso1631 4y ago
  Supply and demand. Supply of new cars is constrained due to chip shortage, this increases the price, leading to inflation.
  • acdha 4y ago
    Especially because the chip shortage means the car companies are favoring making more of their highest margin vehicles - you can buy a $60k vanity truck easily because they get way more markup on those compared to their economical choices.
• natch 4y ago
  A good way around this for people who absolutely want a new car is to buy electric and enjoy the fuel and maintenance savings. Inflation has hit EVs too, but at least the other costs are a lot lower, bringing the TCO to on par or better.
  • Someone1234 4y ago
    This same song gets sung no matter how much more an EV costs over an ICE vehicle. EVs likely do save $10K~ over the life of the vehicle, but EVs cost $20K more than a similarly sized/styled ICE right now. For example the Model 3 Vs. Corolla is $20K difference. If you spend $4K extra on the Corolla Hybrid instead the fuel savings advantage for the EV reduces. EV proponents always want to pretend Hybrids and Plug-In Hybrids don't exist. It is also all predicated on driving a lot. As EV prices continued to increase, proponents just increased the "assumed mileage" to make their arguments. I literally read someone's post about "cost savings" that assumed 30K miles/year. That's almost commercial usage levels. To be clear, I'm extremely pro-EV but I tire of the "just ignore the sticker" talk vis-à-vis pricing. EVs are darn expensive and the $10K savings don't magically change that and are based on a whole host of assumptions that may not apply. The next model year Bolt EV and EUV may be significant vehicles, because they're going to be priced low enough to where the $10K lifetime savings may actually make them a little cheaper than their ICE contemporaries.
    • natch 4y ago
      You start by using insulting language and talking about hybrid vehicles which do not offer the same fuel savings as EVs, do not have the mechanical simplicity and elegance of EVs, and thus do not have the lower maintenance costs of EVs, as well as having a significantly shorter expected lifetime, while also supporting intransigent auto makers and stinking. Then you agree with me by saying that upcoming EVs will be cheaper than ICE cars. (I think we can agree that in the context what is meant is a cheaper TCO). And $10k is a very conservative number which doesn’t even account for a lot of benefits, from safety, to externalities like pollution emitted by a hybrid or other ICE car, to the probable much longer lifetime of an EV relative to an ICE car, as well as being able to look at yourself in the mirror. Also your choice of a Corolla for comparison is surprising. We should compare prices of cars with similar features, not low end cars against high end cars. This pretty much invalidates your comparison which claims a $20k price difference. And even if you still believe what you think, one way to look at it is that we are all going to be paying for climate change one way or another. If we pay a little up front to save on gas, maintenance, safety, fun, reducing pollution, and supporting companies that give a shit, we will reap even more benefits later.
• rockyj 4y ago
  This is pretty crazy! New cars are out of reach for most people in the west. I work in DE and am visiting IN for holidays, I was surprised to see that smaller SUVs with decent tech and features are available here for under / around 10K. In DE, I could not even get a decent 3 year old second-hand hatchback under 10K. Something just seems off. (e.g. - https://www.hyundai.com/in/en/click-to-buy/prices?prod=VENUE https://www.hyundai.com/in/en/click-to-buy/prices?prod=VENUE, same for Renault Kiger)
  • aperson_hello 4y ago
    Generally speaking, the cars built for the Indian market are very different than the ones built for the European market. Everything from safety to features to build quality is different.
    • rockyj 4y ago
      You must be right, although I could not find any feature lacking (touch screen, Android Auto etc. it is all here). Yes, you will be hard pressed to find an engine above 120bhp but electronically it is all there. But I am no expert and am not sure about the material, build quality etc.
      • lotsofpulp 4y ago
        I imagine touch screens and android auto/CarPlay are the relatively cheap components. I can buy a basic Sony unit for $300: https://www.bestbuy.com/site/sony-6-2-apple-carplay-built-in-bluetooth-in-dash-digital-media-receiver-black/6283607.p?skuId=6283607 https://www.bestbuy.com/site/sony-6-2-apple-carplay-built-in...
  • gumby 4y ago
    There are many reasons for the price differential; two of them are safety and quality in general. Cars in Europe, and DE in particular, have a lot of safety requirements (from antilock braking to Knautschzonen) ignored in India for cost reasons. And the quality of Indian mfg is not up to German standards (few countries are!). There are other factors as well of course, some of which would work fine in Europe. Bt really, how many people would choose a Lada or Trabi today?
• aperson_hello 4y ago
  I just bought a mid-size SUV new (definitely not a frugal decision) - and if I had gotten the top-tier package with every single accessory possible to buy on that model (which I definitely did not do), I still wouldn't have reached that number!! What are people buying? And why?
  • decafninja 4y ago
    The Dealer Markup Package maybe? I don't know how true this is today, but as recently as a few months ago I knew of some people that were paying $10,000 dealer markups on Kia Telluride, but that particular vehicle seems to be especially notorious for shenanigans like this.
• bojangleslover 4y ago
  Get yourself a 4Runner and you'll be immune to such market cycles!
  • decafninja 4y ago
    4Runner, along with the rest of its related family - Land Cruiser, Tacoma, Sequoia, and Lexus GX/LX, are probably the vehicle of choice for surviving the zombie apocalypse.
  • vaidhy 4y ago
    the gas bill will bankrupt you first :)
    • lotsofpulp 4y ago
      Gas is not that expensive. Even in CA, it is a few thousand dollars per year at most. And the 4Runner and other cars can get to a few hundred thousand miles easy, so compared to spending a few extra tens of thousands on a new car, gas is a negligible cost. Plus you’ll have a 4Runner. 500 cents per gallon, 15 miles per gallon, that is 33 cents per mile in fuel costs. A 35mpg car would be 15 cents per mile. At 20k miles per year (which is a lot), you’re looking at an extra $3,600 per year. But even after 10 years/200k miles, you will have massive resale value due to their reputation as being indestructible (assuming you live in a place that does not salt).
      • acdha 4y ago
        That’s ignoring the higher purchase cost, though. At the end of those 10 years you’d have a vehicle with a $13-15k KBB estimated value (assuming it’s in very good condition) but will have spent enough extra up front and on gas to buy two new efficient cars even before you consider the greater cost of a heavier vehicle like the 4Runner in parts and tires or insurance.
        • lotsofpulp 4y ago
          True, I was only considering the cost of fuel assuming you wanted that size of a car. Actually, I feel like catalytic converters thefts might make it a uneconomical compared to EVs these days, assuming you live in a state that requires emissions testing.
• lotsofpulp 4y ago
  https://mediaroom.kbb.com/2022-07-12-New-Vehicle-Prices-Set-a-Record-in-June,-According-to-Kelley-Blue-Book,-as-Luxury-Share-Hits-New-High https://mediaroom.kbb.com/2022-07-12-New-Vehicle-Prices-Set-... Why is it so hard for writers to specify mean average or median average? Why do they never provide distribution information? It would take a negligible amount of effort to list a few percentiles, or even all the deciles to give people the whole picture.
  • acdha 4y ago
    Is “median average” a term you’ve heard commonly? I’ve only heard “average” referring to mean, never median.
    • lotsofpulp 4y ago
      Maybe not commonly, but I would like to know for sure.
• taylodl 4y ago
  Meanwhile I just bought a new scooter (sit on and ride motorcycle scooter) last week. Gets 90 miles to the gallon. Admittedly, it's not as efficient as an EV, but the $3500 price tag sure beats the $48,043 average new car price, and the insurance is significantly cheaper too. It's also a blast to ride! I was able to pay cash for it so I don't have a loan to repay. Before everybody starts in on but you can't take it on vacation bit, yeah, of course not. That's what I have my paid-for 2015 Honda Civic that I bought used in 2018 for $10,500 for - and it's now paid-off. The scooter extends the life of the Civic, so I only need to drive the Civic when I actually need a car. I'll now be driving that Civic until gas is no longer sold. Want more oomph than a scooter? You can get a motorcycle. Heck, you can get a motorcycle and a scooter both brand-new and not pay much more than I did for my Civic in 2018 - right now in 2022 at your local dealer! In this era of re-thinking transportation, EV's are but one option. Scooters, E-bikes, and motorcycles are other options. Heck even electric motorcycles are starting to appear for under $10K. Edit: Add link to Ryvid Anthem - https://ryvid.com https://ryvid.com
  • moistly 4y ago
    You are much more likely to pay with your life when you’re riding two wheels. I quit riding because smartphones have made the roads much more dangerous. For sure, you do you, but there is a cost that you are not recognizing.
    • taylodl 4y ago
      Always wear a helmet, don't drink and ride, and don't ride a bike that's too big for you or too powerful for you. Beyond that, continually practice your basic riding skills - especially swerving. If you do that, which granted many riders don't, then your probability of serious injury is vastly diminished.
• cudgy 4y ago
  Not a fan of using the average for this metric. Median is far more useful.
• afrcnc 4y ago
  I don't get it. Why is the chip shortage affecting cars more than other smart devices? I have no issues buying anything else. For example, phones, fridges, computers, smart TVs, etc.