topped $50,000<\/a> in September for the first time, before slipping back under that level in October.\n <\/p>\n\n But now, automotive experts say, car prices are headed back over that level. And this time, they might stay there.\n <\/p>\n
\n Ivan Drury, director of insights at Edmunds, and Erin Keating, executive analyst at Cox Automotive, say cars are nearing that mark.\n <\/p>\n
\n \u201cIt\u2019ll edge up, even as much as the consumer doesn\u2019t want to pay that amount,\u201d said Drury. \u201cIt\u2019s just the cost of everything on a car is going up, and $50,000 is just not that far away.\u201d\n <\/p>\n
\n The higher prices for cars \u2013 a necessity in many transit-starved cities and towns \u2013 are part of a larger affordability crisis that\u2019s squeezed Americans, leaving many living paycheck to paycheck just to get by.\n <\/p>\n
\n President Donald Trump, alongside top auto executives, announced a \u201creset\u201d of federal fuel-economy standards for vehicles during a White House event on Wednesday.\n <\/p>\n
\n Trump said his action, which rolls back emissions standards set by the Biden administration, will lead to lower car prices by reducing the costs automakers accrue to meet tougher emission rules.\n <\/p>\n
\n \u201cToday my administration is taking historic action to lower costs for American consumers, protect American auto jobs and make buying a car much more affordable,\u201d Trump said.\ufeff \u201cThese policies force automakers to build cars using expensive technologies that drove up costs, drove up prices.\u201d\n <\/p>\n
\n Trump also claimed that this move should save consumers $1,000 off the price of a car.\n <\/p>\n
\n The CEOs of Ford and Stellantis, the European automaker that produces the Jeep, Ram and Dodge brands in the US, issued statements in advance of the event that praised the administration\u2019s actions. But the change will do little to lower the cost of building cars.\n <\/p>\n
\n All automakers plan their models and features years in advance, and many buyers look for improved fuel economy when shopping for cars.\n <\/p>\n
\n Automakers also have to meet tougher mileage rules in other countries, and even some individual US states. Despite facing legal challenges from the Trump administration, many states follow strict emission rules set California.\n <\/p>\n
\n Lastly, Wednesday\u2019s action likely will not provide additional savings since mileage rules were essentially gutted earlier this year when legislation ended financial penalties for automakers for exceeding emission standards.\n <\/p>\n
\n General Motors CEO Mary Barra, who was not at the White House event, said earlier Wednesday that GM would continue improving fuel efficiency even if the mileage rules are rolled back. Speaking from the New York Times\u2019 Dealbook conference in New York, Barra added that GM would also continue to invest in electric vehicles.\n <\/p>\n
\n No matter what changes are made to fuel-efficient rules, here\u2019s why Americans will likely shell out more for a new car next year.\n <\/p>\n
\n Car buyers often shop based on their anticipated monthly payment, with 80% of car sales financed, according to Experian.\n <\/p>\n
\n Nearly a fifth of new cars now have monthly payments of $1,000 or more, Experian said, a result of a 30% increase in car prices and sharply higher interest rates since October 2019.\n <\/p>\n
\n If the Federal Reserve keeps cutting interest rates, buys could face less in interest costs. But, perversely, that could give dealers room to increase their prices, keeping total monthly payments the same or even higher. (Anyone who\u2019s ever bought a car likely knows the negotiating process at the dealership that ultimately determines how much a car costs.)\n <\/p>\n
\n \u201cMost consumers do shop by a monthly payment,\u201d said Keating. \u201cSo I think that the monthly payment is far more impactful than anyone is giving it credit for. While affordability will still be an issue, they may feel a lot better about that monthly payment as rates go down.\u201d\n <\/p>\n
\n Wealthier households have also prospered in the K-shaped economy, in which higher- and lower-income households see diverging fortunes.\n <\/p>\n
\n Stock market gains, fatter paychecks, rising home prices and anticipated tax refunds from Trump\u2019s massive domestic policy bill could all fuel demand from richer buyers, driving sales of costlier models and pushing up average prices overall.\n <\/p>\n
\n \u201cThis is why we believe the spring selling season is likely to be better than it\u2019s been in typical years,\u201d said Keating.\n <\/p>\n
\n The end of the electric vehicle buyer tax credit in Trump\u2019s tax and spending bill in July got a lot of attention. But the bill also quietly removed financial penalties for automakers that exceed emission regulations.\n <\/p>\n
\n That means automakers now have greater freedom to concentrate on sales of larger, more profitable pickup trucks and SUVs \u2013 which also happen to be more expensive, again lifting average car prices in general.\n <\/p>\n
\n Automakers have so far been reluctant to raise car prices too much and risk angering Trump, as well as potentially losing buyers to rivals.\n <\/p>\n
\n But the average sticker price, after rising less than 3% compared to a year earlier in all but one month through August, rose about 4% in September and October, according to Edmunds. That\u2019s because the model-year 2026 vehicles are hitting the lots, typically with higher sticker prices. Those newer models will make up an increasing share of sales going into next year as the remaining 2025 model-year vehicles are cleared out.\n <\/p>\n
\n But there\u2019s at least one scenario in which prices could fall \u2013 although it might be worse than higher price tags.\n <\/p>\n
\n If the job market softens further and people increasingly lose their jobs, the bottom can fall out of the demand. Sales plunged thanks to the job losses of the Great Recession, with General Motors and Chrysler ending up with bankruptcies and federal bailouts.\n <\/p>\n
\n No one is predicting anything that catastrophic this time. But job losses and a recession would be one very painful way to keep prices in check.\n <\/p>\n
\n \u201cI don\u2019t think the headwinds predict that much of a fall,\u201d said Keating. \u201cI don\u2019t think it\u2019s waving warning flags just yet that say, \u2018Hey, we\u2019re in for a big dip.\u2019\u201d\n <\/p>\n
\n \u2013 This story was updated with additional reporting. CNN\u2019s Alayna Treene and Alejandra Jaramillo contributed to this report.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Prepare for automotive sticker shock next year \u2013 again. Average new car prices briefly topped $50,000 in September…\n","protected":false},"author":2,"featured_media":167429,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-167428","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/167428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=167428"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/167428\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/167429"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=167428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=167428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=167428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}