The Future of Cars

The price of purchasing a new car has increased in recent years. A recent report indicated that the average price of buying a car is out of reach for Americans from medium-income households in 25 of the country’s major cities. The report, which was published by Interest.com indicates that the average price of purchasing a new car was $32,086 in 2013. Based on a twenty percent down payment, 48-month financing, and principal, interest, and insurance fees, average monthly payments for this car would total $633, a figure which is out of reach considering the average income for middle-class American households.

History

In 1908, $32,085 would have been enough to buy forty cars at an average price of $700 each. While cars were seen as more of a luxury and less of a necessity back then, they were actually more affordable. Even once the effect of inflation is taken into consideration, cars in 1908 were roughly half the price of today’s new vehicles. While the price of purchasing a car has risen steadily as opposed to rising in large increments, along the way cars have become less and less affordable for the average American.

Factors That Affect Pricing

Cars have changed in recent years. New technologies that are either on the market or currently in development will revolutionize the car industry in years to come. These technologies include electric cars, plug-in hybrid cars, battery-powered electric cars, hydrogen cars, and cars that run on biofuel or alternative fuels that have a less discernible impact on the environment than gasoline. These technologies are generally more expensive than traditional diesel and gasoline-fuelled cars, although there is the potential with some of them for drivers to save money on the cost of fuel. In addition, the materials used to build cars are rapidly changing and may determine the cost of the car. Carbon fiber, duraluminium, and fiberglass are new materials that have driven up the price of cars.

Predictions

The cost of cars will continue to rise. While consumers wait for the price of new vehicles to become more affordable, more reasonably-priced car sharing programs are already infiltrating the market. Car sharing programs are perfect for people who have access to public transportation or use a bicycle to commute but require a car sometimes. Car sharing programs are more likely to be found in urban centers and allow users to pay per minute or mile. They have various pricing structures, with some more flexible than others. Membership fees may include a joining fee or monthly flat fee. As the cost of ownership slips out of reach for middle-class Americans, those that can will resort to this option.

Quick Wrap-Up

The price of purchasing a new car reached an all-time high in 2013. Some studies have indicated that the monthly cost of owning a car is not in line with the income reported by average Americans living in a number of the country’s urban centers. Although this doesn’t stop Americans from buying cars, many more Americans are questioning whether they actually need a car. Those that live in cities may have access to car sharing memberships, which are a more affordable option for those who want the flexibility of owning a car but not the cost.