Americans shift to more affordable cars as prices, insurance costs increase nationally: report
Published On Oct 22, 2024, 7:05 PM
As inflation affects consumer spending, Americans are increasingly opting for more affordable cars, shifting away from luxury models. The average car price has climbed to $47,000, prompting nearly half of new-car shoppers to seek vehicles costing $35,000 or less. The rising cost of vehicle ownership—including a significant increase in auto insurance—has exacerbated this trend. Affordable models like the Chevrolet Trax are seeing strong sales, and car manufacturers are responding by introducing lower-priced vehicles, including Kia's upcoming EV4, priced between $30,000 and $35,000.
Stock Forecasts
GM
Positive
The shift towards affordable vehicles indicates increased consumer price sensitivity, which could negatively impact the sales of higher-end auto manufacturers. Companies emphasizing lower-cost production and sales, like GM with the Chevrolet Trax, may benefit from this trend.
F
Negative
The rise in auto insurance costs may deter some consumers from purchasing new vehicles altogether, leading to a slower growth trajectory for the auto industry overall. This could negatively impact stocks in the wider auto manufacturing sector.
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