Payments for new cars squeeze buyers amid inflation, high interest rates
Slatestone Wealth chief market strategist Kenny Polcari reacts to wholesale inflation rising more than expected in July on Varney & Co.
People looking to buy a car are feeling the sting of inflation and high interest rates brought on by the Federal Reserve’s push to restore price stability in the economy.
The average car payment for a new vehicle has risen from $650 in 2022 to a record high of $725 in 2023 – a year-over-year increase of 11.5% according to an analysis by LendingTree using Experian data. For comparison, that increase is more than triple the most recent inflation reading, which came in at 3.2% year-over-year in July.
«It doesn’t sound like a lot of money, but the truth is that most Americans have pretty limited wiggle room in their budgets anyway, so an extra $75, $80 a month isn’t nothing,» LendingTree chief credit analyst Matt Schulz told FOX Business. «And then when you factor in the cost of everything else rising, it just makes for an even more difficult situation.»
INFLATION FORCING AMERICANS TO SPEND $709 MORE PER MONTH THAN 2 YEARS AGO: ECONOMIST
Payments on new cars are at a record high after rising more than 11% year-over-year amid high inflation and elevated interest rates. (Photo by: David Paul Morris/Bloomberg via Getty Images / Getty Images)
Schulz noted that low inventory stemming from supply chain disruptions has contributed to the rise in auto prices, while inflation and rising interest rates have put borrowers in the position of facing higher monthly payments on a more constrained household budget.
«The combination of high sticker prices and high interest rates is really making things tough on folks who are looking for a car,» Schulz said. «And it’s a shame because so many times when
Read more on foxbusiness.com
