This browser does not support the Video element.
New car prices may start coming down soon, analysts say
Average new and used car prices dropped slightly in September. FOX 26 Consumer Reporter Heather Sullivan speaks with experts for some Smart Sense on what to expect from this trend.
HOUSTON - After two years of climbing car prices, automotive analysts say the market may finally be starting to turn the corner. Meantime, some buyers have been taking on $1000 monthly payments.
Auto analyst firm Edmunds says the average monthly payment for a new vehicle is now more than $700. And 14% of borrowers are paying $1,000 or more, mostly for large trucks and SUVs.
RELATED: Time is running out to get historically high-paying savings bonds to fight inflation
Analysts say new car prices may finally start coming down soon, but don't expect much lower monthly payments for car loans due to high-interest rates.
JD Powers reports the average price for a new vehicle went from a record $46,259 in August, down to $45,622 in September. The average interest rate on a new car loan hit 5.7%.
Auto insurance: Is inflation leaving you underinsured?
High inflation is keeping more buyers on the sidelines. Therefore, experts expect dealers to start offering more incentives.
"You’re going to see a lot of manufacturers' rebates and I do think that’s going to bring pricing down," explained Grant Feek, CEO of TRED.
This browser does not support the Video element.
Rental car prices up over 50%
One company says rental car prices have gone up over 50%. FOX 26 Consumer Reporter Heather Sullivan has some smart sense on ways you can save a little money for that rental vehicle you may need this summer.
When it comes to used car prices, Kelly Blue Book reports dealers saw the biggest one-month drop in prices paid at auction since the pandemic began. And on the market, used cars sold for an average of $28,061 in August, that's down 1% or $158. However, analysts expect used car prices to remain high through the end of the year.
Some drivers who purchased cars at higher prices may find themselves underwater if prices come down. And speaking of underwater, experts are warning buyers to watch out for flood-damaged cars from Hurricane Ian.
"What happens in these situations, you’ll get thousands of cars that are flooded. Dealers all over Houston and Dallas are going to be sending droves of cars to that market, which will not be good for car pricing either," said Feek.
This browser does not support the Video element.
Moves you can make to fight inflation costs
FOX 26 Consumer Reporter Heather Sullivan has some smart sense on what you can do to help fight inflation costs.
If you need to buy a car, experts say now may be a better time to buy than when prices come down, as the Fed is expected to continue raising interest rates.
"If you’re sensitive to interest rates, you might think about buying sooner rather than later," said Feek.
Nerdwallet offers this calculator to help you determine what your car payment might be.