Car affordability concerns won’t go away anytime soon, data shows

Published On Sep 16, 2024, 2:00 AM

Recent data highlights ongoing affordability issues for car buyers in the U.S., with many consumers delaying purchases due to rising vehicle prices and high financing costs. A study by Edmunds shows that while 73% of consumers are hesitant to buy because of prices, the average new car price is significantly higher than what many buyers expect or want to pay. Those planning to spend $35,000 or less make up a substantial portion of new car shoppers, yet the average price for new vehicles reached nearly $47,716 in July 2024. Additionally, auto financing rates have surged, with many buyers facing interest rates between 6% and 11%, far exceeding their target rates of 0 to 5%. Further complicating matters, auto insurance premiums have increased by 15% in early 2024, exacerbating financial strain for many car owners. More consumers are also struggling with car payments, with repossessions on the rise, signaling that affordability challenges are likely to persist.