INDIANAPOLIS — Vehicle prices are high.
The average transaction price for a new car in March 2023 was $47,713 according to Edmunds.
The company found that five years ago, 54% of the large SUVs sold were over $60,000. Now, 94% of the large SUVs sold are over $60,000.
Not only are car prices high, but the cost to borrow the money for the car is also high. That's why the average new vehicle payment hit a record high at $730 per month.
For about one of every six people, payments are $1,000 and up per month.
The average annual percentage rate on a financed new car is 7%, a rate that Ivan Drury with Edmunds said is not a regular average.
"We're looking (at) usually something like 4% or 5% is seen as a good or normal," he said.
Inventories are starting increase. The drone photos below show the same car lot in September 2021 versus present.
So, what can you do to try and save money? Look at automaker incentives, because they're slowly coming back.
"If you're brand agnostic, if you're willing to kind of try something new, you're going to have the best odds of getting the best deal," Drury said.
He added that while cashback offers are straightforward, APR or interest rate deals need to be researched.
"Find out what your credit score is. You want to take that number and go to the bank, go to the credit union find out what in general you could get. Compare that to some of those advertisements that you see from the automaker or from the dealer," said Drury.
Also, look at how long the car has been sitting on the lot. That's information the Edmunds' site offers. Drury said if you see a vehicle that has only been sitting for two weeks, give it some time.
"If it sits there for another few weeks, OK, you're good. You might have a little bit of negotiation power on your hands," Drury said.
Finally, if you have a trade-in, know it's worth because the values can vary from one source to another.
"Whether it's private party, online dealer, local dealer, a CaxMax, I say shop that vehicle like no tomorrow," Drury said.
Hopefully reducing your payment in a pricey market.