According to a recent study, the average price of a new car in February was $45,296 as opposed to the average manufacturer’s suggested retail price (MSRP) of $41,637.
A joint prediction from J.D. Power and LMC Automotive showed 31% of new automobiles were sold above MSRP last month. Which is lower than the peak of 48% in July.
In terms of which vehicles cost the most over MSRP; majority of them are luxury models. For example, the Genesis GV70 commands the largest premium, with an average price of $56,476 that is 27.5% higher than the MSRP of $44,299.
The Jeep Wrangler comes next, with a price of $44,396, or 23.9% more than its MSRP of $35,821. The only other non-luxury car in the top 10 costs $55,347, which is the Jeep Wrangler Unlimited, 21.9% more than the MSRP of $45,386.
However, not all automobiles have a significant price premium. For instance, the average price of the Chevy Silverado 1500 is $50,116, which is $1,09 below the MSRP. Priced at $27,887, the Malibu, another Chevy, is just 1.1% more expensive than the MSRP of $27,597.
In addition to new car price increases, interest rates have been continuously rising over the past year, which raises the cost of financing a car.
According to Statista, the typical interest rate for a 60-month loan on a new car is 6.3%. Which is an increase from 4% a year earlier. The J.D. Power and LMC Automotive research states that monthly payments often amount to $722. An increase of $59 since last year.
Despite the fact that these prices may appear excessive, buyers who take the time to compare shops may be able to acquire a vehicle at a more affordable price.
According to Edmunds’ Joseph Yoon, a consumer insights expert, “You might be able to locate a deal if you have the time to shop around or travel outside of your neighborhood dealership.”He adds that difficulties arise when people require cars right quickly because they are unable to apply patience in those situations.
