New cars are crazy expensive but, if you’re careful, they don;t have to be

New York
CNN
 — 

After years of parts shortages, the average price people paid for a new car in America only recently dropped back below sticker. But this ignores a larger issue: Even pre-pandemic, sticker prices were steadily ticking higher as buyers load up on options.

Two decades of historic data from auto website Edmunds.com indicates that options are the biggest driver in rising vehicle prices — and that it’s been happening over many years.

“Overall, the average price gap between base models and vehicles as optioned up by customers has soared, rising from 24.6% in 2002 to 38.1% in 2022.”

The average sticker price of a new vehicle, as purchased, was about $30,000 in 2009 and reached almost $40,000 in 2019, before Covid hampered parts supply and vehicle production, according to Edmunds. Last year that figure reached almost $46,000, according to data from Edmunds.com.

Yet the average sticker for base models, adjusted for inflation, has actually gone down a little — even as consumers have shifted from sedans to more expensive SUVs. The difference is the cost of options buyers added on.

Steve Reed, an economist with Bureau of Labor Statistics, a government agency that measures inflation, concurred with what Edmunds’ historic pricing data indicated.

“According to our measures, the real cost of cars relative to other things has declined,” he said.

That’s good news for drivers willing to go no-frills: If you don’t want to pay lots of a new car, you don’t have to. Don’t dip heavily into the options list, and cars are actually relatively cheap.

Consider the Nissan Versa, the cheapest car available for the 2023 model year.

It has a base price of $15,730. Adjusted for inflation, that’s barely different from the base price of a Hyundai Accent in 2002, the cheapest new car available that year. This is despite the fact the 2023 Versa is loaded with standard features — including push-button start, blind spot monitoring and a touchscreen — of which many weren’t even available two decades ago.

For lots of different types of vehicles, gaps between the lowest base price and the average sticker price as sold to customers have grown over the past two decades, according to Edmunds.com…