The cost of new and used cars is expected to remain above average throughout 2022.
The increase in prices is attributed to strong demand for automobiles, coupled with inventory constraints.
President Biden said in a speech this week that he is working to reduce the bottlenecks that drive up costs.
Soaring prices for new and used cars show no signs of slowing down, and experts say higher-than-average costs are expected to continue through 2022.
The cost of cars has soared globally in recent months in response to increased demand and inventory constraints, exacerbated by a shrinking supply of chips that are integral to automotive production. Labor shortages have also had an impact on the speed at which automakers can produce vehicles, further increasing costs.
Tyson Jominy, head of data and analytics for JD Power, told CNBC that about 89% of car buyers pay above or less than 5% of the sticker price, noting that consumers should expect to see higher prices throughout the year.
“The typical dealership experience that consumers are used to – walking through dealership lots with rows and rows of cars, negotiating prices and getting lots of incentives – probably won’t return this year because there are. 4.5 [million] to 5 million consumers on the sidelines waiting for cars, ”Jominy told CNBC.
With the increase in demand for cars, many auto sellers have also cut back on sales or traditional deals, contributing to rising costs, CNBC reported. According to data from Edmunds, an online database for automotive inventory and information, the average selling price of a new car is $ 45,872, higher than the manufacturer’s suggested retail price. average of $ 45,209.
In a speech on the December 2021 jobs report on Friday, President Joe Biden said his administration was working to reduce bottlenecks to bring down car prices, focusing its efforts on construction better factory infrastructure and stimulation of national production.
“I’m not an economist, but I’ve been doing this for a long time,” Biden said. “But here’s the way to look at it. If car prices are too high right now, there are two solutions: you increase the supply of cars by making more, or you reduce the demand for cars by depleting them. Americans. It’s the choice. “
Read the original article on Business Insider