Prices on Automobiles Keep Going Up In America
American car prices have risen sharply over the past decade. We take a look at this CNBC YouTube video for answers as to why this is.
automobile prices rise of the suv vehicle inflationCreated: Sunday 16th of March 2025 10:38:01 PM
Modified: Monday 17th of March 2025 08:40:43 PM
American car prices keep going up. The average cost of a vehicle in the United States right now is $50,000, a 30% increase over the past 5 years. Monthly payments are also close to all time highs with many owners owing more in debt on their vehicle than it is worth. Automobile manufacturers are not deciding to make cheaper vehicles because margins are slim and input costs are high. China, however, is making cheaper automobiles, but those are being targeted with high tariffs in the United States, making them even more expensive than American made automobiles. Eventually, it is believed that American manufacturers will not be able to rely on protectionism, forcing them to cut costs and sell cheaper cars.
In America, the price of everything has gone up over the last several years but vehicle prices have outpaced the average inflation numbers. Lower cost vehicles in America have actually not done well, with sales falling for low cost vehicles. Sales of vehicles over $65,000 have skyrocketed. Therefore, it seems that there aren't that many people who want a lower cost vehicle. In fact, SUV sales have gone from about 30% of sales in 2009 to over 50% in 2019. It seems Americans love big cars. And American automobile manufacturers have changed their strategy, going after sales margins instead of volume.
There is some hope that electric vehicles (EVs) will get cheaper over time, largely because the batteries used for them may get cheaper to produce over time. The platform they are built on can easily be attributed to other vehicle types such as SUVs. And new steel manufacturing methods may mean vehicle manufacturers will be able to use less steel in production.
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