Car prices expected to stay at record highs

Used car prices up 37%

DETROIT – If you’re in the market for a car, there’s no doubt you’ve noticed prices are up.

The cost of a new car jumped 7% last year and used car prices are up 37% It’s a trend that’s expected to continue in 2022.

It’s a supply and demand problem with the chip shortage and while things are loosening ever so slightly on that front and production is improving, prices are expected to stay at record levels for the foreseeable future.

“The economics are in place for people to buy new vehicles and there is all this pent up demand of people who just said forget it last year and now wanting to buy a new car this year,” autotrader analyst Michelle Krebs said.

LMC Automotive is saying the average new vehicle price over all vehicles is more than $47,000 and perhaps more eye-opening is the average price for a used vehicle.

Another reason for the higher prices is the kinds of cars, trucks and SUV’s we’re buying these days. Back in 2012, only 15% of all vehicles purchased were luxury vehicles and more than half cost less than $30,000. Last year more than 18% were luxury vehicles and now only 19% were less than $30,000.

One of the biggest remedies to cool down inflation is to raise interest rates. A double whammy for the consumer because it will keep car prices high and make it tougher for you to afford what you want.

Read: More automotive news coverage

About the Authors:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.

Kayla is a Web Producer for ClickOnDetroit. Before she joined the team in 2018 she worked at WILX in Lansing as a digital producer.