When COVID struck, it disrupted the world’s supply chain, resulting in a chip shortage and an all-time high in car prices. People started paying more for used cars as there were fewer available to buy, and anyone wanting a new car was required to pay a high premium.
After almost three years, the average cost of a new car has reached its highest point ever. Figures from Cox Automotive data suggest that the average cost of a new luxury vehicle in November was $67,050, and the record-high new car price was $48,681. According to Cox, the typical dealer markup in November was $410.
In order to avoid paying more than the sticker price, Cox Automotive advises avoiding Honda and Kia dealerships. According to reports, these brands typically sold for 6% and 8% more than the MSRP. “The only good news is that new non-luxury car buyers may now finally purchase them for prices closer to MSRP”, continues Cox Automotive. Buick, on the other hand, offered lower, discounted prices.
Having said that, finding dealers prepared to sell you a new car without charging you a hefty markup does not guarantee that the vehicles available will fall within your budget. With only so many chips to go around, automakers are reportedly choosing to focus on building higher trim levels to increase profits. So the fact that there is a base model, doesn’t mean it will be able at your local dealer.
Kelly Blue Book reports, “Strong sales of luxury vehicles have been a major factor in new car prices generally rising”.
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