1. Rising Prices: The New Norm

• Average Cost: New cars now average over $48,000—an increase of nearly $6,000 from two years ago and $10,000 since 2020.
• Contributing Factors:
• Inflation and disruptions from the COVID-19 pandemic.
• Shift towards higher-priced SUVs and trucks.
• Reduced production of lower-priced models due to chip shortages and new regulations.

2. The Changing Showroom

• Fewer Affordable Cars:
• Automakers have phased out smaller, affordable models (e.g., Ford Fiesta, Chevrolet Spark) in favor of SUVs and EVs, which have higher profit margins.

• Example: Ford now offers SUVs like the Bronco (starting at $32,295) instead of sedans like the Fusion (which started at $22,840).

• Electric Vehicles (EVs):

• EV prices are dropping ($53,376 on average in August 2023, down from $65,688 a year earlier) but remain higher than gas-powered alternatives, pushing up the overall average car price.

3. Value in Today’s Cars

• Modern Advancements:
• Cars are now safer, more efficient, and packed with features, including standard safety systems and advanced infotainment.

• Fuel Economy: Improved by 30% over two decades, saving consumers $7,000 per vehicle in lifetime fuel costs.

• Affordable Options:

• Models like the Toyota Corolla (starting around $21,500) and the Toyota Camry (starting at $26,000) remain excellent values, offering reliability and efficiency without breaking the bank.
• Corolla Hybrid delivers 48 mpg overall, making it a cost-effective and practical choice.

4. Tips for New-Car Shoppers

• Do Your Research:
• Use online resources to find reliable, affordable options.

• Don’t base your budget on market averages—focus on what fits your financial needs.

• Be Flexible:

• Consider alternatives to in-demand models to avoid paying premiums.

• Look for discounts and incentives, which vary greatly by brand and model.

• Trade-In Advantage:

• Elevated used-car prices can result in higher trade-in values, helping offset new-car costs.

• Leverage Buying Tools:

• Use services like Experts' Build & Buy program to secure a fair deal.

5. The Future of Car Shopping

• More Electric Options: Prices for EVs are expected to drop further as production scales up.
• Broader Affordability: Despite rising costs, good value exists in mainstream small and midsize cars.
• Patience Pays Off: Allow more time to find the right vehicle at the right price.

Bottom Line: While car prices are higher than ever, smart shopping, research, and leveraging trade-in values can help you navigate the market and find a car that meets your needs without overspending.

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