One reason people can hold their vehicles for increasingly long periods is that auto manufacturing has improved over time. It doesn’t mean that most owners of older vehicles are necessarily stuck with constant repair bills. They’ve just been doing the (routine) service.” “They haven’t been really having major work or anything. “You see cars all the time in here with 250,000, 300,000 miles,” said Jay Nuber, owner of Japanese Auto Professional Service, a repair garage near downtown Ann Arbor, Michigan. With an average loan rate having reached 11%, the typical monthly used-vehicle payment is now $563.įaced with deciding between making a jumbo payment and keeping their existing vehicles, more owners are choosing to stick with what they have, even if it means spending more on repairs and maintenance.Īuto mechanics have been struck by the rising ages and mileages of vehicles that now arrive at the shop in numbers they’d never seen before. Used vehicle prices, on average, have surged even more since the pandemic hit - up 40%, to nearly $29,000. household income can no longer afford the average new car payment and still cover such necessities as housing, food and utilities.
Experts say a family earning the median U.S. It’s all pushed the national average monthly auto loan payment to $729 - prohibitively high for many. Typical loan rates on new-car purchases have ballooned to 7%, a consequence of the Federal Reserve’s aggressive streak of interest rate hikes to fight inflation. Since the pandemic struck three years ago, the average new vehicle has rocketed 24% to nearly $48,000 as of April, according to. And though they’ve eased somewhat, the cost of a vehicle still feels punishingly expensive to many Americans, especially when coupled with now much-higher loan rates.
The shortage drastically slowed global assembly lines, making new vehicles scarce on dealer lots just when consumers were increasingly eager to buy. Blame it mainly on the pandemic, which in 2020 triggered a global shortage of automotive computer chips, the vital component that runs everything from radios to gas pedals to transmissions.
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