Yahoo Finance Video
New car prices held steady while used car prices ticked 2.7% higher, according to the October Consumer Price Index (CPI) data. Edmunds head of insights Jessica Caldwell joins Wealth! Host Brad Smith to discuss what the data says about the auto market and what it means for car buyers. Car buyers "have been generally pretty shocked when they are going car shopping. The average price of a new vehicle is $47,000. It's not what they remember the last time they bought [a car]. I mean, they're not following prices every month, maybe like we are, or looking at CPI, they just remember they bought a vehicle six years ago, it was probably $35,000 [to] $37,000, and now it's a lot more," Caldwell says. She adds, "The reality is, if you need a car, you're going to have to buy a car. Whether that is new, whether that is used, whether that is 20 years old because you got to get from point A to point B [in] most places in this country. And so people are having to allocate more money out of their monthly budgets to buy [a] vehicle." Heading into the holiday season, Caldwell says the "good news" for consumers is that "we are seeing on the new vehicle side, more incentives ... We are seeing a reintroduction of incentives into the marketplace, and that is definitely welcome for consumers." While prices are "still high," Caldwell says "When you look at the incentives as well, that makes them a bit more friendlier, and we're going to see a lot of deal advertising, probably as we go into Black Friday and the end of the year, you'll see a lot of advertisements thinking that now is a great time to buy a vehicle." To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Naomi Buchanan.
