NEW YORK (Reuters) – Justin Soffer always enjoyed the car-buying process, with the typical back-and-forth negotiations that led to good discounts.
But seven dealers and three months later, the marketing consultant from the Berkshires emerged shellshocked last year – and a lot lighter in the wallet.
Along the way were several scenes from a classic farce, involving running to dealerships when cars arrived, salespeople scrambling to get keys and jacked-up prices.
Welcome to car buying in the pandemic era.
“It’s unusual and dysfunctional,” says Soffer, who ended up buying a Toyota RAV4 in December – at the Manufacturer’s Suggested Retail Price, which he considered a win. “I gave up on the idea that I would get a good deal.”
Wheeling and dealing on car prices is an American tradition, but lately the dealer is in the driver’s seat. Blame a mix of chip shortages, supply-chain slowdowns and consistently high consumer demand.
The result: The average new car price in the United States hit $47,077 in December, a new record, according to Kelley Blue Book. That is $5,742 more than the previous December – and up over $800 in a single month.
“The average price people are paying for cars is well above sticker at this point,” says Jessica Caldwell, executive director of insights for car shopping and research site Edmunds.
That lack of negotiating power filters down into auto loans. The average loan balance on new cars for 2021’s third quarter was $37,746, a new high that carries a monthly…
