(CNN) It’s never been nearly as difficult to buy a new or used car in the United States as it is today, after all improving supply issues and inflation is starting to stabilize.
Vehicle transaction prices — the price you actually pay after any dealer discounts or markups — have risen higher and faster since 2020 than at any other point in more than 35 years, according to recent data from the Bureau of Labor Statistics.
Consumer price indexes for new and used cars — the average changes in vehicle transaction prices over time — were higher than they were four years ago in 2019.
There is a silver lining. BLS data shows that inflation for used cars has cooled significantly since December 2022 when it rose in the months before that. But used cars have a long way to go before approaching 2019 sales prices and new car prices aren’t slowing down.
The average transaction price of a new car has jumped nearly $12,000 in the past five years, according to data from the auto website Edmunds.com. For used cars, the average transaction price was nearly $9,000 higher than in February 2018.
“[Prices are] going down a little bit, but not going down nearly as fast as one would expect,” said Ivan Drury, the director of insights at Edmunds.com. “If you look at the past, or if you’ve done a transaction before in your life, all these numbers are bad.”
Car buyers haven’t seen price increases like this since the 1970s and 80s. What makes the 2020s unique is how high car prices have been in such a short period of time. In the worst 12 months of the used car market pandemic, the index rose 45%. It had been less than 12 months since the BLS began keeping records in 1947 when used car prices rose even more.
Recent trends in prices are similar across regions of the United States, but in some areas, starting prices may be higher than others. Preferences for more expensive vehicles in some areas are driving regional differences, Drury said.
There’s a big market for pickup trucks and SUVs in the south, he said, where BLS data shows new car transaction prices rose the most since 1987.
The average price of a large pickup truck nationwide will be $62,430 in 2022, according to Edmunds.com. The average midsize car price is just $31,381.
The road to more reasonable prices for new and used cars remains full of potholes.
Consumer tastes have shifted to larger and more expensive pickup trucks and SUVs. New car buyers are loading in options, compared to the more stripped-down models available a few years ago. Both of these trends drive up prices and also create an incentive for automakers to make more expensive rides. The used market is still affected by the decline in leasing trade-ins and rental car companies competing with consumers for both limited supply of three- to five-year-old vehicles.
“We have some things that are really holding back the US market,” Drury said. “I don’t see those leaving anytime soon.”
