New Car Prices: I don`t get it?!?

[SwedishRider]

I`ve considered (on and off) upgrading my wife`s car to a new 5-7 seat SUV, but I haven`t priced out vehicles in some time. I was thinking about being in the $25,000-$30,000 mark, but had an open mind and didn`t know what to expect. Well, I checked out the prices.. and I just don`t get what the heck is going on with modern car sales...

I first looked at a 2013 Ford Explorer with about 20K miles on it. It looked really nice and still had factory warranty left on the vehicle. There was no sticker price on the car, so I used my phone to look it up on the dealership`s website (dealership closed on a Sunday). For a 2-year-old Explorer with 20K miles, they wanted $41,000!!!

So next to it was a brand new 2015 model... MSRP`d for about $49,000!!!

And the local Chrysler and Kia dealerships weren`t much better. Kia Sorrento`s were going for $41,000 new, and Durangos and Cherokees going for over $30,000 (and some over $40,000). Just stunning amounts of money IMHO.

And that`s just the sticker price, not the taxes, reg, conveyance fees, and financing (and any other ridiculous add-on costs to jack up the price). It was incredible to see prices that high. I don`t remember it being this bad even a few years ago.. but in fairness I wasn`t looking that hard at that time either.

But here`s what I don`t get... who the heck is buying these obscenely priced cars? A quick Google search pegs the average American household income at $50,500. So how are dealers moving cars? Only things I can think of are:

1) coming way down off MSRP?
2) creative financing, including 84 month payments?
3) leasing?
4) um, maybe they aren`t moving cars? (though seems unlikely since they are still in business)

I get that there will always be wealthy folks that will drive in, buy the exact car they want, write a check and drive out. But with the average income at $50,500, the majority of folks out there are definitely NOT in or near that position.

So, anyone have any insight into what is going on? I am genuinely stunned at how crazy car prices are right now. Or am I doing something wrong (or thinking wrongly)? Something just seems out of whack when a Kia SUV tops the $40K mark... are people really paying that?!?!?

[Oldfordisbetter]

I think most people lease. Then they have creative financing to make people buy vehicles thst they cant afford. 70 k for a new pickup? There is still old guys around that bought nice big farms with that much money. And dont even get me started on the quality of these new vehicles. Oops, I put quality and new vehicles in the same sentence. I dont get it either, but then again I don`t have to have the latest and greatest like most people do.

[rlmccarty2000]

I have found that the best way to get a car is to look online for something one or two years old, preferably certified, and you will find substantial savings. I bought my 2014 370Z, that was 9 months old with 8000 miles for $15,000 less than sticker price. There are many cars like this. Check the Blue Book prices for used cars before you shop. This is a good guide of what cars are actually worth. Or you could go to a local auction, used car lot owners go there to replenish their stock, but there may be no warranty. Others may chime in on their best ways to get a bargain while car shopping. Good luck.

[tropicsteve]

I don`t get it either. they even talk like 20-30k is nothing, but to me that`s still a lot of money. I guess they are just pushing 72 months or more financing to make payments appear more affordable.

[SwedishRider]

I`ve been watching some videos on how to detail cars, and taking notes from you folks here on this board. I`ve been buying a few tools to help with that process, and I hope I`ve been good enough that Santa will be bringing some more this December.

I think I`m going to continue to detail and maintain the cars I have now. They are 8 years old with about 100K miles on them. I`ve taken good care of them, both bodywise and mechanical. I could detail both and get them to shine better than the dealership`s lot cars... and I have no payments on either of them.

I am just speechless as to what they are getting for new (and used) cars right now. Just ridiculous realy..

[bswombaugh]

I don`t get it either. they even talk like 20-30k is nothing, but to me that`s still a lot of money. I guess they are just pushing 72 months or more financing to make payments appear more affordable.

I know a guy that got his car financed for 96 months through the dealership. I couldn`t believe that someone would finance a car for 8 years !

[House of Wax]

I`ve just recently been discussing this with my wife since we`re doing some vehicle shuffling. This is why we ended up with a used Expedition several years old. I just can`t believe how many new Tahoes, Expeditions, etc...you see all over. We sure as hell don`t have 50/60k to spend on a new vehicle.

[20115.0]

Rebates are the key. Bought a new 12 f150 xlt crew when the were starting to get the 13`s in .....$10k in rebates. About 25% off window

[ShawnF350]

Good luck on your hunt for a great price.
My new vehicles obviously before being married were a `89 F150 4x4 $13200
`97 F350 4x4 $25182.
both standard cabs
a few other cars but my wife always got the new ones.

To buy an F250 4x4 I looked Dec of 2014 was like 48,000
and the Explorers and F150s are close to that.

I`m happy with my wife`s old 02 explorer and my 98 Mercury Grand Marquis I got for $900.

Even if I spent $3000 in detailing tools and supplies since 2012.... it`s better than a car payment.
You don`t have to worry about a scratch or dent either. I do still park far away from others though.

[ca.detailchick]

I know a guy that got his car financed for 96 months through the dealership. I couldn`t believe that someone would finance a car for 8 years !

Yup thats what I did more or less. It seems like a very long time to make payments. Then I tacked on an alarm and extended warranty that makes more then 8 years of payments!

I was sick of very high unexpected auto repair bills though and it seemed to make better sense to have something reliable. So far my extended warranty paid for itself after needing rack and pinion replaced for 1,100.00 at only 30,000 miles.

Im hoping this is my last vehicle,well unless Prius comes out with a van! LOL!

[XxBoostinxX]

I don`t understand how people afford new cars either. I think there is just a ton of people living in debt.

[RaskyR1]

I don`t put more than 10,000 miles on in a year so I lease. I shop around online to find the best deals and even flew out of state to get my previous vehicle. The sticker on my new truck was just shy of $40k, but after all the rebates it was closer to $30k. Lease was advertized $269 a month with only $269 due at signing.

[RaysWay]

I`m finding out the same things as the OP with motorcycle shopping. New liter bikes or larger (1000cc`s and up) are now around $13-14k, but you can pickup a used bike with super low miles for close to half that price. Every once in awhile you can find a bike that someone purchased brand new and it sat in their garage for a couple years and now they want to get rid of it at a great deal with super low miles.

[Migue]

It`s insane seeing all these new vehicle prices (especially trucks and SUVs).

I had a co-worker who was always switching cars by either leasing something new or buying then selling. He said that a car Payment along with a Mortgage is just something that we have to live with for our entire lives..... i thought "ummm no you don`t" and it was sad to hear someone accept that as their reality. The only reason i`m strongly considering getting a brand new vehicle is to have something reliable for Mobile Detailing and that`s it. Otherwise i`d be buying another of what i currently drive but with better paint and call it a day.

[Bunky]

For a significant number, car buyers focus on the monthly payment (dealer can lots of profit in it) so leasing is always attractive. I just do not like having car payments for life as some must do.

Our vehicles: 1997, 2001, 2007, and 2009. I am not spending $1200 ($100 month) each a year to maintain. I have seen the ROI but no payment and having something you own appeals to me/

Prices are high including trucks so one can see how Ford lives off F150 sales. There are so many tacked on features plus technology that did not exist previous. They come with larger tires so even that can be $800-$1000 for a new set.

I may buy one that is 1 - 2 years when I get another one.