Is it me, or has anyone else noticed how expensive new cars and trucks have gotten? According to a study done by USA Today, the average price of a new car in the US is now almost $35,000. That price has been steadily increasing by more than 2% year-in and year-out for quite some time now. So why have new cars become so expensive to buy?
There are several likely reasons why this has happened. For starters, the economy is better now than it was between 2007 and 2011, which means more people are buying automobiles. When demand goes up, supply goes down, and the price increases follow suit. Though the FED has raised interest rates this year, they remain historically low, and that encourages people to borrow money for big purchases like automobiles. It’s simple economics.
Another reason that vehicle prices have increased is that more expensive luxury items are now being offered on automobiles across the entire price spectrum. It used to be that goodies like navigation systems, heated and ventilated seats, HID headlights, adaptive cruise control, and parking assist were only to be found on expensive luxury models. But you can now obtain those cool gadgets on entry level cars and trucks, for an additional fee of course. And all those premium upgrades drive up the cost of the new vehicle.
My car is 10 years old and has 120,000 miles on it. To be honest it has more wrong with it than right with it. But with the cost of buying a new car going up every year, and the damage my kids do to the backseat and doors, I think I’ll hold onto it for as long as I can.