Sales of new cars in the U.S. have been dropping in the past three months and analysts believe April's sales results will be much the same. But why are sales falling? It comes down to prices of new cars going up and up.
According to data from ALG True Car, the average new-car price rose two percent when compared to last year. Kelly Blue Book reports that the average transaction price in March increased 1.7 percent to $34,342 when compared to the same time last year. There are a number of factors as to why consumers are balking at larger prices; credit not being as easy to attain, younger buyers being saddled with debt, and inflation.
“It’s not just the price of the cars -- it’s the price of everything else. The price of things like health care, shelter -- all of that is fighting for the budget,” said Michelle Krebs, a senior analyst with Cox Automotive.
Automakers are trying to stem this decline by increasing the amount of incentives available. J.D. Power reports incentive spending reached a new high in the first half of April with an average of $3,499.