The car industry is having one of its best years in history. Prices have skyrocketed, largely for three reasons. The first is pent-up demand from the time that COVID-19 kept dealerships closed. The second is low interest rates. The third is a tremendous shortage of new cars due to the lack of semiconductor chips used in car electronics systems. Some manufacturers have even been forced to shut down assembly lines.
The shortage also has hit dealers. The number of days a new car stays on the lot is an all-time low of about 35. It has triggered an inventory problem, as people wait for the cars they want that are on backorder.
According to vehicle pricing and information provider Kelley Blue Book, the average transaction price for a new automobile hit an all-time record high of $42,736 in July, an 8.2% increase from the same month in 2020.
The car shortage has not changed some of America’s car-buying habits. Pickups, sport utility vehicles and crossovers are much more in demand than they were to decades ago. Meanwhile, demand for sedans has dropped so much that Ford has eliminated most of its models in this category. However, low-end cars, which carry modest prices and get good gas mileage, still have a place in the market.
The total average transaction price is just that, an average. Despite rising prices, there are plenty of vehicles on the market right now that cost half or less than the average. To determine the most affordable car in America, 24/7 Wall St. reviewed the base manufacturer’s suggested retail price (MSRP) for all makes from major auto manufacturers selling in the United States, using data from U.S. News and World Report. Prices are for the 2021 model year.
It turns out that the most affordable car in America is the Chevrolet Spark, which has a base MSRP of $13,400.
Click here to read about all the most affordable cars in America.
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