Ask Peter Welch, the CEO of the National Automobile Dealers Association (NADA) what worries him the most, he'll admit that it is average consumers getting priced out of new cars.
He admitted this yesterday at the Automotive News World Congress in Detroit. Welch said that the latest figures he has seen - through October of last year - reveal the average retail price of a new car climbing to a new high of $35,366. The average monthly payment is hovering at $538, and interest rates have climbed to an average of 5.76 percent (new) and 9 percent (used). Longer loan terms are becoming common, with the average length standing at 64.3 months.
"You know, people buying $55,000 pickup trucks with $1,000-a-month payments — I've never seen it. A lot of people don't think that's sustainable," said Welch.
"That is going to put a giant dent in the SAARs and it almost makes me wonder if at some point we're going to see another Henry Ford," offering new and more affordable vehicles.
Aside from more people buying more expensive trucks and utility vehicles, Welch said other reasons for the increases in prices come down to new fuel economy standards and safety equipment. He sees new car prices rising towards $40,000 with $800 monthly payments.
On a slightly positive note, NADA predicts that 16.8 million light vehicles will be sold in 2019. While down from 17.3 million in 2018, Welch notes there are some positive economic indicators "such as high employment rates, a solid GDP and a healthy economy overall."
Source: Automotive News (Subscription Required)