car

Kelley Blue Book says average new car monthly payments almost doubled from 2019 to a record $777

Unusual Whales

Mar 7, 2023 • 1 min read

Per Bloomberg

Recently, it was revealed that new vehicle average prices have increased by 30% since 2019, costing buyers almost $50,000. Now, Kelly Blue Book says that the average new car monthly payments almost doubled from 2019, reaching a record $777.

Aside from the prices of new vehicles increasing, even the average monthly prices of used vehicles have also seen an increase of up to $544. The $777 average monthly payments for new cars represent almost a sixth of the median after-tax income.

The higher prices are evident in cases like those of Sercy Sanders, 48, a single dad of two high schoolers and a customer service representative who frequently rode the bus in Pittsburgh since early January. Because of this, Sanders wanted to get a used vehicle as a form of commute and was pre-approved for a loan.

The problem was that Sanders wanted a 2016 Honda Acord at under $17,000 but couldn't find any. Sanders found that the prices for this vehicle didn't go below $19,000.

Sanders: “That’s just the way it may have to be if I want to stay in my price range and not have too high a monthly car bill... With an older used car, you just never know what you’re going to get.”

This comes at a time when Americans are also struggling to buy real estate amid the high-interest rates and the higher prices of properties. Although interest rates have started to soften, they are still high, making it difficult for first-time homebuyers.

Housing is still at an almost four-decade-high unaffordable level, with first-time homebuyers needing to earn up to $90,000 in 2022. This was a $20,000 increase from the $70,000 supposed requirement in 2022, with the median buyer age also increasing from 29 in 1981 to 36 last year.

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