EDMUNDS SHOCKS The Auto Industry (SCARY NEW DATA!)

Introduction

In a recent report from Edmunds, the state of car affordability in America has become increasingly concerning. As more consumers grapple with the financial burden of purchasing vehicles, it's clear that the industry is disconnecting from buyers’ reality. This article delves into the shocking statistics revealed by Edmunds and examines how expectations differ drastically from the current market situation.

Affordability Crisis

According to Edmonds’ research, a staggering 73% of Americans believe they cannot afford to buy a car. Many respondents indicated that buying a new vehicle might require them to take on a second or third job or make significant sacrifices in other areas, such as vacations or medical treatments. This sentiment stems from the reality that manufacturers continue producing cars that the majority of Americans cannot afford, leaving consumers anxious and confused as the average transaction price of new vehicles surpasses $ 47,000.

Adding to this crisis is the revelation that over 50% of individuals polled stated they would need to work additional hours or secure another job to afford a new vehicle purchase.

The Surreal Data

What's particularly shocking is that although new vehicle affordability improved in August to the best level in nearly three years, the figures still don’t resonate with the average consumer. The average price point for a new vehicle remains an obstacle, and the majority of market participants are shocked to learn that their buying power has drastically diminished compared to six years ago. The average consumer's expectation to spend under $ 30,000 contrasts sharply with the reality that less than 15% of new cars are available under this price point.

For used vehicles, 50% of respondents indicated a preference to spend below $ 15,000, but only 15% of transactions occur in that range. With prices shooting up and interest rates soaring—now averaging around 11.4%—the gap between expectations and reality has never been more pronounced.

Interest Rates and Consumer Response

The research indicates that many respondents are unaware of the actual interest rates they would face when financing a vehicle. While most consumers expect to pay no more than 5% interest for a used vehicle, the reality shows that the average APR is nearing 14.5%. This misalignment leads to potential confusion and frustration for buyers, making the car-buying journey feel even less attainable.

Encouragement for Potential Buyers

Despite some bleak statistics in the auto industry, there are still opportunities for potential buyers—particularly among electric vehicles (EVs). This sector has experienced dropping prices and significant depreciation, making it an appealing option amidst the affordability crisis. With many EVs losing value rapidly, they represent one of the few bright spots in the current market.

Conclusion

The report from Edmunds paints a grim picture of the auto industry today, highlighting a significant rift between what consumers can afford and what is available to them. As manufacturers continue to produce higher-priced vehicles, many potential buyers are left with limited options and greater difficulty securing financing, indicating urgent changes are needed to address the affordability crisis facing American consumers.

Keywords

affordability crisis, Edmunds report, new vehicle prices, used vehicle prices, interest rates, consumer expectations, EV depreciation

FAQ

Q: What percentage of Americans feel they cannot afford to buy a car?
A: 73% of Americans believe they can't afford to buy a new vehicle.

Q: What is the average transaction price for new vehicles?
A: The average transaction price for new vehicles has exceeded $ 47,000.

Q: What percentage of respondents would consider spending under $ 15,000 on a used vehicle?
A: 50% of respondents indicated they want to spend under $ 15,000 on a used vehicle, yet only 15% of transactions occur at that price point.

Q: What is the average APR for used car loans currently?
A: The average APR for used car loans is approximately 11.4%, which is significantly higher than the consumer's expectation of around 5%.

Q: Are electric vehicles losing value?
A: Yes, electric vehicles are depreciating rapidly, creating potential buying opportunities for consumers.