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FILE – A price tag hangs on the rearview mirror of a car being sold at a car dealership. (Photo by Justin Sullivan/Getty Images)
Some Americans are starting to move toward more affordable cars in conjunction with rising vehicle prices and insurance premiums. Research shows that consumers in the new car market are willing to spend $35,000 or less on their next vehicle. Car insurance premiums are likely to continue rising in 2024 based on costs associated with car ownership, such as maintenance and taxes.
With rising inflation and rising insurance premiums, consumers are looking for more affordable cars.
In a September Edmunds report, 73% of consumers said they had delayed buying a new car because of rising prices.
Additionally, 48% of new car buyers surveyed by Edmunds said they were willing to pay less than $35,000 for their next car. Additionally, 14% said they would like to spend $20,000 or less on their next car.
FOX Business reports that the average price of a car sold in the U.S. before 2020 was about 20% lower than the current 2024 average of $47,000.
Last month, AAA noted in its 2024 Operating Costs (YDC) study that the total cost of owning and operating a new car this year was $12,297, or $1,024.71 per month, an increase of $115 over 2023.
The AAA report notes that the main reasons for this change are higher depreciation and finance charges, which could impact consumer interest in purchasing new cars.
Additionally, below-market-priced model cars like the Chevrolet Trucks are sold on Chevrolet’s website starting at about $20,300, and sales are at an all-time high, according to FOX Business, GM Authority’s I mentioned it as a story.
Apart from this, rising car insurance prices may also be a deciding factor for consumers when purchasing a car.
Auto insurance premiums are currently on track to increase by a total of 22.2% annually in 2024, Reuters reported, citing the Bureau of Labor Statistics. The only time the U.S. had the highest auto insurance premium rates was in December 1976, when it was 22.4%.
According to Reuters, insurance premiums could continue to rise based on costs associated with car ownership, such as maintenance costs, taxes, car depreciation, gas prices, and insurance.
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Information for this article was provided by FOX Business, AAA, Edmunds, and Reuters. AAA released a report in September 2024 discussing the increasing cost of car ownership. Last month, Edmunds surveyed consumers about how much they were willing to spend on a car. This article was reported from Washington, DC
