Five years ago, there were a dozen models of new cars that sold for less than $20,000. Today, there’s only one. If you’re will to spend over $100,000, there are 32 models to choose from.
And if you think the answer is to buy a used car, think again: the average listing price for a used car on a used car lot is about $27,000. That up more than 30% from pre-pandemic prices.
The average monthly payment for a new car loan is over $750 and the average interest rate for a used car loan is above 13.7%!
We know why interest rates are so high. That’s because the Federal Reserve has been hiking interest rates over the last year or so. But why are car prices so high? That can be partially be explained by the “supply chain” disruptions during the pandemic. The other reason: car manufacturers focused on producing more expensive, higher profit margin cars. So it’s not your imagination. Car prices really are higher!
What to do? If you can get by with your current ride, hold tight. Prices will start coming down soon. Inventory is increasing and the more cars there are for sale, the lower the prices will go.
If you’re having trouble making those sky-high payments, we can help. A bankruptcy can allow you to re-write your car loan, often with a lower interest rate and a lower payment. We can also cancel those expensive add-on contracts and, under certain circumstances, we can even reduce the amount that has to be paid back based on the current value of your car.
Don’t wait until your car is repossessed. Call us today to schedule an appointment to discuss your options.
Ralph Guenther