Attention, Plebs: New Cars Are Becoming Prohibitively Expensive

As new vehicle prices continue to climb, many wonder how high MSRPs can go before the public decides to take a pass — assuming they haven’t already. Sales growth is slowing, even in seemingly bulletproof markets like China. Even before this ominous backdrop unfurled, dealers were making noise about new car prices that had grown overly ambitious, claiming they couldn’t endure another period of sustained economic hardship.

Edmunds estimates that the average transaction price of a new vehicles reached $36,495 in December 2018 — a 3 percent increase compared to December of 2016 and a 13 percent increase compared to December of 2012. Taking that knowledge, Road & Track compiled a broader picture of the new-car market and where it might be going.

Spoilers ahead if you don’t want the unpleasant non-surprise ruined.

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Damn: Used Cars Are Getting More Expensive

Ever since the end of the recession, new car prices have crept up steadily while used vehicle values remained comparably low. In fact, compact cars actually became less expensive between 2013 and 2017 as the crossover craze left a glut of small, economical vehicles that could be purchased for little more than a smile.

Unfortunately, the tide is turning. A sudden influx of end-of-lease vehicles was supposed to continue suppressing used vehicle prices for 2018. However, things have not played out that way. Despite there being so many gently used vehicles saturating dealer lots, average used-vehicle prices reached $20,153 in the second quarter of this year — making it the first time the market has ever broken the $20K threshold. According to research firm Edmunds, the 3.3-percent increase over 2017’s second quarter was also a record.

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Tax Refunds, Easy Credit Boost Used Car Prices
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  • ToolGuy "I caught a little bit Saturday, but Sunday it seemed impossible to find on my cable. I think it was streaming on Peacock, which I have, all weekend, so I could've watched it that way. I'm not complaining, to be clear, since I could've popped Peacock on and yet I chose to watch something else."Being you sounds like a real chore. 😉
  • ToolGuy If it is the longer-wheelbase version, good. (If not, it isn't.)
  • ToolGuy "circumvent(ing) dealerships" should be illegal.Does "circumventing" mean spending my money there?
  • ToolGuy If my head gets flatter I might consider this.