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Recent price increase also affects people buying new or used cars

“We don’t expect prices to go down."
Posted: 4:47 PM, Feb 04, 2022
Updated: 2022-02-04 22:00:09-05
Retail Sales

BAKERSFIELD, Calif. (KERO) — Prices of homes, grocery items, and gasoline have risen as a result of inflation, but the impact has also carried over into the auto-shop market, causing issues for buyers.

As we find ourselves in the midst of inflation, low inventories have driven sticker prices high, and the actual prices people pay for new cars are even higher.

“There’s record high prices for both new and used cars. If you can wrap your head around this, the average cost of a new car just went over $47,000.”

Matt Deged, Editor at Kelly Blue Book added that supply chain issues are heavily affecting the prices of vehicles. He said that one of the reasons new car prices are so high is due to the microchip shortage.

Without those, new cars can’t be built, which constrains the choices consumers have. This leads more people to used cars, which causes prices to rise.

“We don’t expect prices to go down anytime soon so just be aware that it's challenging. There’s limited inventory so you may not get the exact features you want, [or] the exact color you want just be flexible,” said Degen.



Be aware, car buyers can lose thousands of dollars if they're not careful in making the transaction.

From misleading ads and deceptive sales pitches to the small print in the contract, Degen told 23ABC that people should be proactive even before stepping foot on a dealership lot.

“Research, research, research. Knowledge will really be your friend here. Go to a website like KBB.com and get all the facts and figures that you can to be smart about your car purchase long before you walk onto a dealership lot. Know a car that is going to meet your needs.”

Degen added that another way to get through the car purchasing process is a simple yet important tactic all buyers should be mindful of: “Budget. We can’t emphasize this enough especially in these times where prices of gasoline are rising, prices of everything are rising so keep all of that in mind. Try to spend below your limit.”

According to Cox Automotive, a parent company of Kelly Blue Book, America’s car dealers ended October of 2021 with more than 900,000 and 50,000 new vehicles in stock.

But that number is still just 36% of what dealers had in stock just over a year ago.


23ABC In-Depth

As mentioned, car prices have gone up, but what does that exactly look like when you go to buy a vehicle?

We took a deeper dive on information released from Edmunds, a used-car database, and have a break down for you.

In 2020, under a loan financed for 70 months, a used car cost $24,000.

That monthly payment would be $437 after a down payment of just 3,200.

However, last year a used car purchase under the same financing terms would cost $29,000. Now, the monthly payment is $520 and that's after a higher down payment of $3,400.