Car prices now show it’s one of the worst times to buy


It has almost never been more difficult to buy a new or used car in the United States than it is today, despite improve supply issues And inflation begins to stabilize.

Vehicle transaction prices — the price you end up paying after dealer discounts or markups — have climbed higher and faster since 2020 than any other point in more than 35 years, according to recent data from the Bureau of Labor. Statistics.

Consumer price indices for new and used cars – the average changes in the transaction price of vehicles over time – are much higher than they were four years ago in 2019.

There is a silver lining. BLS data shows that used car inflation has fallen just as dramatically since December 2022 as it has risen in previous months. But used cars still have a long way to go before they approach 2019 sale prices, and new car prices have yet to slow.

The average transaction price for a new car has jumped nearly $12,000 over the past five years, according to data from automotive website For used cars, the average transaction price is still nearly $9,000 higher than it was in February 2018.

“[Prices are] goes down a bit, but not as fast as one would hope,” said Ivan Drury, chief information officer at “If you look back, or if you’ve ever made a transaction before in your life, all of those numbers are bad.”

Car buyers haven’t seen such price increases since the 1970s and 1980s. What makes the 2020s unique is the increase in car prices in a short period of time. In the worst 12 months of the pandemic in the used car market, the index rose 45%. There has never been a 12 month period since the BLS began keeping records in 1947 when used car prices inflated further.

Recent price trends have been similar across all regions of the United States, although in some regions starting prices may be higher than in others. Preferences for more expensive vehicles in certain regions drive these regional differences, Drury said.

There’s a big market for pickup trucks and SUVs in the south, he said, where BLS data shows new car transaction prices have risen the most since 1987.

The national average price for a large pickup truck was $62,430 in 2022, according to The average price for midsize cars was just $31,381.

The road to more reasonable prices for new and used cars remains littered with potholes.

Consumer tastes have shifted towards larger and more expensive pickup trucks and SUVs. New car buyers are stock up on options, compared to the more stripped-down models available a few years ago. Both of these trends drive up prices and also incentivize automakers to produce more expensive vehicles. The second-hand market is still affected by the decline in leasing repossessions and car rental companies competing with consumers for the same limited supply of three to five year old vehicles.

“We have a few things that are really hampering the US market,” Drury said. “I don’t see those leaving any time soon.”

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