The market for automobiles is the least affordable in modern history, according to CoPilot CEO Pat Ryan in an interview with CNBC. Jessica Dickler reports:
By nearly every measure, buying a car has become extremely expensive.
Not only are new vehicle prices near an all-time high, but the interest rate to finance a purchase has also jumped dramatically. Now, fewer affordable new cars even hit the market, according to recent reports.
Today, new cars priced under $30,000 make up just 8% of the market’s supply, down from 38% pre-pandemic, car shopping app CoPilot found.“It’s the least affordable car market in modern history,” said CoPilot’s CEO Pat Ryan.
Well before the Covid-19 pandemic, consumer tastes had started to steadily shift away from sedans toward more expensive SUVs and trucks. Then, car buyers piled on options, such as high-tech touch screens, ambient lighting, 360-degree cameras and heated and cooled seats.
“There’s a war of features,” said Ivan Drury, Edmunds’ director of insights.
In response to increased demand, dealers began stocking more cars with all the bells and whistles, he said, and carmakers upgraded their lineups with high-end packages, or trim levels, and scaled back on less-expensive cars.“It only makes sense to continue to ratchet up the price to offer more features and increase the size of the vehicle with each redesign,” Drury said.
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