As we look ahead to a new model year, it’s becoming increasingly clear that car buying isn’t as straightforward or affordable as it used to be. Car prices have risen steadily for the last few years. Much of the blame can be laid at the feet of supply chain shortages, pandemic lockdowns, and increasing demand.
To put it in perspective, a recent study by iSeeCars found that new cars are now an average of 29% more expensive. In addition, the incomes and wages of the average American consumer increased by only 13%, making the affordability gap even more prominent.
iSeeCars studied the situation by calculating its Car Affordability Index (CAI) to identify cars that were no longer affordable. The CAI compares the price of a new car to average wages and incomes over the past few years and flags any vehicles whose prices have risen above what was considered affordable. According to the results, below are four.
1. Nissan Frontier
Squaring off against the Ford Ranger and Honda Ridgeline, the midsize pick-up truck has seen its price increase more than any other vehicle studied. Between April and December 2019, the Nissan Frontier’s affordability was only $12,687 more than starting MSRP registered in early 2019. By August 2022, the price had ballooned to $39,833. According to iSeeCars, this made the Frontier top the list earning 10% above its affordability index, with the national affordable new car price currently being $36,221.
2. Chrysler 300
The American-made luxury sedan, once a popular choice for celebrities, has seen its price skyrocket in the past three years. At the end of 2019, the Chrysler 300 price was only $9,621 more than its affordability index. By August 2022, the price had increased to $39,767, making it 9.8% more expensive than the affordable car price. In addition, the Chrysler 300 is almost twice its original cost since it first hit the market in 2005.
3. Kia Sorento
The midsize crossover SUV has become increasingly popular with suburban families and millennials. As the demand for SUVs continues to rise, so has their cost. In April 2019, the Kia Sorento was already higher than its affordability index by $9,094. By August 2022, the price of a new Kia Sorento had increased to $39,570, which is 9.2% higher than the affordability index. That’s too much for most consumers, even with the Kia’s long list of features.
4. Jeep Cherokee
The SUV/crossover hybrid has seen its prices soar over the last three years in response to increased demand for SUVs and crossovers. The original rugged SUV has been steadily increasing in price since 2019, when it was already $9,714 above the affordability index. By August 2022, the sticker price of the Jeep Cherokee had skyrocketed to $39,030, making it 7.8% higher than the affordability index.
Ways to find a deal on New Cars despite the Challenging Market
While it may seem like car buying is now out of reach for the average consumer, there are still ways of finding a good deal. Car dealerships and manufacturers often offer incentives such as cash-back opportunities, low-interest financing, or discounts on parts and service packages. If you’re willing to shop around, you can still find a great new car that fits your budget.
In addition, some states, like New Hampshire, have the most affordable cars than other states, with only 1% of new cars being higher than the affordability index. That means there could be a great deal on a new car right in your backyard.
Also, automakers are going electric, and many of these new models are more affordable than their gas-powered counterparts. And with tax credits and state incentives for EVs, there’s a good chance you can find a new electric car that fits your budget.
So, even though new cars may not be as affordable as they used to be, there are still ways of finding a good deal. Car dealerships, automakers, and state incentives can all offer you the chance at a great car without breaking the bank.