iSeeCars.com: Reports Inflation Hammering the Car Market, Driving Up Prices (But Not Income) Reducing American's Vehicle Affordability
AUTO CENTRAL - October 27, 2022: AIADA Online reported that new research shows that popular cars like the Toyota RAV4 and Ford Mustang have become too expensive for regular Americans.
A shortage of new vehicles and other pandemic-related factors have driven car prices through the roof in recent years, reports The Insider.
iSeeCars compared skyrocketing vehicle costs to relatively stagnant median American wages and found that dozens of models that would have been affordable in 2019 are now unattainable in 2022.
"From August of 2019, well before the pandemic lockdowns started, to August of 2022, new car prices increased by almost 29 percent, and three-year-old used car prices increased by 52 percent, but incomes increased by only 13%," said Karl Brauer, executive analyst at iSeeCars.
To calculate if something is affordable or not, the study considered today's typical rates for car loans and assumed that yearly payments shouldn't exceed 10 percent of a household's income. It identified 33 used models that were affordable in 2019 but aren't anymore.