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Monthly car payments hit record high as vehicle costs soar

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Average monthly car payments hit a record high in May as the cost of new vehicles soared, thanks in part to higher interest rates and a dwindling supply chain.

The average monthly car payment last month hit $712, roughly a 1.7% increase compared to the month before, according to data from Moody’s Analytics. Additionally, the average price of a new vehicle rose to $47,418 during the same month, vastly outpacing income growth.

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As a result, it would cost the average consumer 41.3 weeks’ worth of a median income to buy a new vehicle in the month of May — a 19% increase from the same time period last year.

The higher vehicle costs affected both luxury and nonluxury cars, with the former being sold roughly $1,030 more than the sticker price on average and the latter going for $1,071 above sticker price, according to Kelley Blue Book. However, some experts predict prices may begin to drop for the remainder of the year and indicate some brands, such as Mazda, Hyundai, and Buick, might be able to provide lower-than-expected prices.

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“Although prices are up for May, it’s only 1%, and so that indicates … we may be headed toward a place where the prices will start to decrease,” Brian Moody, executive editor for Kelley Blue Book, told ABC.



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