Americans are switching to more affordable cars as prices, insurance costs rise nationally: report
Boyden Gray PLLC partner Michael Buschbacher discusses concerns about the electric vehicle mandate on ‘The Bottom Line.’
A growing number of affordable cars are entering the American market, with the cost of a typical car in the US seemingly out of reach for many buyers as inflation remains stubborn.
The average pre-2020 car sold in America is about 20% below the current 2024 average of $47,000.
American consumers are moving from luxury models to affordable cars when other costs of living like groceries and rent are still painfully high.
HONDA IS RECALLING OVER 720K VEHICLES BECAUSE OF INSERTS THAT MAY COME TOGETHER IN THE FUEL PUMPS, POSSING A FIRE HAZARD.
GOP ally and Ohio Senator JD Vance said inflation was the cause of the price hike during a campaign rally in Michigan this summer, saying “thanks to Kamala Harris’ spending policies, the average new car costs about $50,000 a year.”
Newly released data from Edmunds paints a different picture: among new car buyers surveyed, 48% shared that they would like their car to cost $35,000 or less, while another 14% reported a total budget of $20,000 for their car purchase.
The new 2024 Chevrolet Trax will be unveiled at the 2022 Los Angeles Auto Show in Los Angeles, California on November 17, 2022. (Frederic J. Brown/AFP via Getty Images/Getty Images)
Models like the Chevrolet Trax, which are below the market’s average cost, start around $20,300 on Chevrolet’s website and sales are very high according to GM Authority.
The September release from AAA revealed that there was a $115/month jump in the average cost of owning a car in America, citing “Your Driving Cost (YDC)” at $12,297 or $1,024.71 monthly.
STELLANTIS RECALLS OVER 21,000 PLUG-IN HYBRID SUVS OVER PEDAL BRAKES
Insurance costs are also high: according to a report from Reuters using data from the Bureau of Labor Statistics, car insurance premiums now reach a total annual gain of 22.2% by 2024. The auto insurance premium rate was only higher in the US in December 1976. , when it was 22.4%.
Auto insurance rates have increased by 50% since the beginning of 2021, when inflation began under the Biden administration.
“We’re hearing from a lot of buyers that they’re refusing to buy a car — or return it — because they can afford the car, but not the insurance,” Kelley Blue Book senior editor Sean Tucker told Reuters.
Electric car Kia Corp. EV3 during a media preview in Seoul, South Korea, Wednesday, May 22, 2024. Kia’s new electric vehicle, the EV3, will be available in South Korea from July and in Europe at the end. 2024. (SeongJoon Cho/Bloomberg via Getty Images/Getty Images)
Kelley Blue Book cites Electric vehicles or EVs are “closing the gap” in cost between the latest traditional gasoline-powered vehicles, with Tesla leading the market as the most popular brand. In September, Kelley Blue Book reported that EVs cost an average of $56,351 versus gas-powered vehicles at $48,397. However, the popular Tesla Cybertruck model has increased that number as the average cost is $116,706.
Kia plans to release an EV next year that meets this market demand for affordable vehicles with “the most affordable EV yet,” according to Electrek. Kia plans to release the EV3 SUV sometime in 2025 and the cost will vary anywhere between $30,000-$35,000.
The House of Representatives recently voted to repeal an EPA regulation that would reduce tailpipe emissions from 2027 to 2032, with 207 Republicans voting for repeal.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Kelley Blue Book did not immediately respond to FOX Business’ request for comment.
Source link
