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Car buyers left with few options as difficult auto market persists

Federal Reserve Rate Hikes Impact
Posted at 4:48 PM, Sep 15, 2022
and last updated 2022-09-16 07:24:38-04

Whether new or used, buying a car is tough these days. If you do find one, chances are the cost is sky-high.

"The price of a used car was the price of a new car, pretty much," potential car buyer Yesenia Maura said.

A new report shows consumers paid an average of $44,559 for a new, non-luxury car in August. And the average used car went for just under $32,000 in July.

Stubborn inflation coupled with supply chain issues made the auto market impossible for consumers.

Now, many are holding on to the cars they already have for longer.

"It used to be people would keep their cars eight years. Then it was 10 years. Now, it's 12-14 years the average person is keeping their car for," Ron Katz with Midas said.

But it's not just a problem for your average car buyer. Even police departments are having a hard time.

"This past Monday, we were notified that Ford canceled all of our orders for 2022 police interceptors," said Robert L. Ruxer III, law enforcement services division commander for the Colonial Heights, Virginia, police department.

The department was then given the chance to buy 2023 models instead. But that came at an extra cost of $7,500 per vehicle, which the city government ended up covering.

It's the latest example of automakers prioritizing their more expensive models at a time when potential buyers have fewer options. For example, Cadillac will soon debut a $300,000 electric vehicle.

It's a move that's paying off for luxury car makers. Porsche, which is expected to go public by the end of the year, is expecting to see $39 billion in sales for 2022, up 20% from 2021.

Meanwhile, consumers are left with fewer and more costly options.

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