straight talk

The Average Price of a New Car



Posted: Monday, August 10, 2009

by straight talk

I decided to write to the new car market because of all the fuss over the clunker incentive. Now it is true people are buying new cars now. Most of them in the "mid size range" and a proportion in the small economy class. In fact as reported today many of the smaller economy vehicles gone since these were not popular among those that have but who moved down a notch to mid size.The large gas guzzler SUV and trucks still an abundance of.  The real question when reviewing this market is, who is buying? Now I wrote to this before, I never got many readers but that was before this great recession. According to Supercom know it all the average price of a new entry level vehicle in 2008 is between $14,500 and $16,500 depending on make and model. These prices slightly lower then now. Now these are base models with limited options I am looking at herein. So, let's assume a person is interested in purchasing a $15,000 vehicle, without tax, tag and title that financed for 60 months would be just about $300.00 a month. Interested does not mean they can buy. No only those with excellent credit, good beacons over 750 and cash on hand can do.

Now another aspect many do not "see" after all the figures are run up is any manufacturer rebates or discounts. You need to make sure these are qualified up front. Are you getting them or just the money from the clunker, tax payer money? If not then perhaps there is ectra money you are missing and significant money. Ask them to explain why your not getting that? Now if true you got all then perhaps some "average" citizens would qualify based on the wholesale value of the car and the finance amount and their credit? Don't hold your breath though. So before you sign on that botten line ask about this. The other thing is know the value of your gas guzzler, what range it is in because there are ranges for that money. You may think you got $4500 but didn't.

So the question is, assuming some lower end buyers can qualify for finance can they can afford the minimum $300.00 a month? That is correct and like I said only the few who are in the upper "middle class" making between $90,000 and up and if their debt to income ratio can support the loan and a beacon score over 750. This is the challenge of this decade for auto manufacturers. So even while discounts and rebates are present they just can't do the job because of a lack of credit worthiness. No, not tight money, tight lenders, fact. yes don't think it is about tight money, they just no longer care to lend to the low end populace and that in my opinion is the nail in the coffin for everyone.

Now why is this significant? Well it seems those who have credit, have a high beacon score, have money can drive" the recovery. However, those who are struggling, no not those making $280,000 a year who spent theirs on toys and houses, I'm talking the little guy, working class people making well under $50,000 a year gross mind you, they're out of the picture. Dead and gone for a long time if forever?

So what is taking its place? Well the used car market is in full bloom with buy here pay here becoming popular by necessity. Of course high interest, roll the dice on the car all too prevalent. Now if we are going to look at this industry to make a rebound then we really need to see cars priced under $10,000 and even then the word qualifies steps in. That $4500 for clunkers did nothing, nada, squat for people who couldn't qualify; it just made it easier for those that have it all to buy and buy they could have at any time they wanted to. This was too good a chance to use tax payer money, theirs and ours, that is those who pay taxes, I don't, to buy that car. Yes and it will all come back to Uncle Sam in a few years. It has to so what did they gain? In effect a loan for a few years. Yes and when that buyer source dries up then what? Well ask the Europeans who are experiencing that now. Also those "clunkers" are supposed to be scrapped, really. Many find their way back onto the used car lots to be sold to those who are really struggling. It is a win; win all the way around for those who have.

Now I don't expect any reaction form this site because it is made up for the very vast majority of people who have money, fact. I do write however for the history books. Yes 10, 15 twenty years up the road there will be people looking back at what happened and they will have is a slanted view, an incomplete story, truths. Hopefully someone will latch onto one of my articles and see it for what really took place. No this bunch does not like fact even when it is glaring them right in the face. You see they do not experience it. so they just have trouble comprehending it. They lump everyone into an Obama hater or Bush hater and nothing could be further from the truth, to use a spin. No until we all recognize just what is reality that this recovery will be, but for just that 20% who has, we will continue to face hard times in this nation.

Now I am quite the opposite of what people label me, I hope for a full recovery. After all I have family who are suffering even as I am. With all due respects I have been writing to this "storm" long before anyone else and they laughed then as well. It isn't about ego no it is all about trying to stimulate people into thinking about this recovery and that it really is for just a select group.

Now here is my prediction. I look very soon for that Indian and Chinese cars to hit our shores soon and this is the hope of our government, that these vehicles will provide a market for the low wage and poor American. What we don't see is more of our future going off shore. Buy American, really. Check the label on the inside of your door Parts, rarely if every made here. No for the most part it is all gone. Yes and what they continue to forget is, who can qualify? No the buying market for a large segment of the population is gone and for these manufactures to survive they will need to depend on foreigners.

2009 Robert T. Melaccio, Sr. All Rights Reserved Worldwide.

I can also be read on realconsiderations.blogspot.com and webgazine.com



Robert Melaccio Sr. has worked in the computer industry for 40 plus years in a diversified business and managerial environments. He enjoys freelance writing, giving seminars for young adults and teen groups as well as being an accomplished award winning poet of published poetry. He has worked teaching and as a youth minister. He is married and has three children and three grandchildren.

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