Experts have cautioned that the automotive market is currently experiencing a historic lack of affordability, with just 8% of new cars priced below $30,000, compared to 38% before the

pandemic. The rising demand for expensive SUVs and trucks, coupled with consumer preferences for high-tech features, has led car manufacturers to focus on upgrading their higher-end models and reducing the production of more affordable options.

Not only are new vehicle prices at near-record levels, but the interest rates for financing purchases are also skyrocketing. CoPilot CEO Pat Ryan described it as the "least affordable car market in modern history." In May, the average cost of a new car reached $47,892, a significant increase from around $37,000 in 2019.

Data from a car shopping app, CoPilot, indicates that 10% of all vehicles sold now exceed $70,000, a 3% rise compared to five years ago. Conversely, the percentage of new vehicles priced under $20,000 has dropped from 8% to a mere 0.3% in the same period.

Ivan Drury, the director of insights at Edmunds, explained that consumer preferences have shifted towards luxury vehicles equipped with advanced features like touch screens, heated and cooled seats, and 360-degree cameras. In response, dealerships have stocked up on more expensive cars, while automakers have scaled back on the production of lower-priced models.

Elevated interest rates further contribute to the escalating costs for consumers financing their car purchases. Despite the Federal Reserve's recent decision to pause consecutive interest rate hikes, financing a vehicle remains at an all-time high. Average monthly payments reached a record-breaking $733 in the second quarter of this year. Additionally, a record-high 17.1% of customers financed cars with monthly costs exceeding $1,000.

Drury highlighted the challenges faced by car shoppers in today's market, stating, "The double whammy of relentlessly high vehicle pricing and daunting borrowing costs is presenting significant challenges." While gas prices have decreased since last year, the prices of used cars have risen by nearly 6% since February, reaching an average of $32,113 in May.

Furthermore, car insurance costs have surged, compounding the financial burden on drivers. On a positive note, gas prices have experienced a significant drop, currently standing at $3.55 per gallon compared to $4.87 at the same time last year, according to the US Energy Information Administration. Photo by Calreyn88, Wikimedia commons.