DRIVERS are choosing to buy smaller and cheaper cars as the average cost of a new vehicle has soared.
In a worrying trend for manufactuers, pricier cars are being overtaken by the likes of compact SUVs with more affordable price tags.
Many drivers are choosing to buy smaller and cheaper cars as the average cost of new vehicles soar[/caption]
Cars like the Chevrolet Trax have risen in popularity due to their lower price than many rivals[/caption]
The recent trend has caused issues for some car brand who have excess stock of pricier trucks and SUVs[/caption]
In a report by the Associated Press, many Americans, like Michelle Chumley, a 56-year-old from Oxford, Ohio, have chosen to downgrade their wheels in recent times.
In Chumley’s case, having previously owned a Chevrolet Blaze, she now drivers a Chevrolet Trax.
She said: “I just don’t need that big vehicle and to be paying all of that gas money.”
This comes as a new vehicle in today’s market sells for an average price of more than $47,000 – which is a rise of 20% from the pre-pandemic average.
According to Edmunds.com, that means a new car buyer would be forced to spend $737 a month if financed at today’s average rate of 7.1% for a loan lasting under six years.
Curiously, a large majority of buyers could potentially manage the finances of a long-term deal such as this – yet decide it isn’t worth the cost.
Ken Roberts, director of market intelligence at online car retailer CarGurus, said: “Consumers are becoming more prudent as they face economic uncertainty, still-high interest rates and vehicle prices that remain elevated.
“This year, all of the growth is happening in what we would consider the more affordable price buckets.”
According to data from Cox Automotive, this has seen sales of compact and subcompact cars and SUVs grow faster than in any other year since 2018.
While the Ford F-Series remains the best-selling vehicle in the US – an accolade it has held since 1981 – and the Chevrolet Silverado sits just behind it, others like the Ram pickup have been overtaken in the figures charts by cheaper, compact SUVs, such as the Toyota RAV-4 and Tesla Model Y.
Keith McCluskey, CEO of the dealership where Chumley bought her Trax, said: “The public just wants to be a little more frugal about it.”
What’s more, General Motors’ Chevrolet brand recently revealed that their redesigned Trax, which came out in the middle of 2023, has become hugely popular after they simply lowered the price.
In fact, Trax sales in the US have risen by 130% this year, making it the nation’s top-selling subcompact SUV.
For other brands, like the ones owned by Stellantis such as Chrysler, Jeep, and Ram, the recent shift has left them overstocked with pricey trucks and SUVs.
This comes as Stellantis recently put their massive test track – located in the middle of the desert – up for sale as it fights to save its struggling business.
Located around 100 miles south of Las Vegas, the massive facility was first owned by Ford back in 1955, before it was purchased by Chrysler in 2007.
The Ford F-Series remains the best-selling vehicle in the US[/caption]
However, compact SUVs such as the Tesla Model Y are growing in popularity[/caption]
