Experts fear rising vehicle prices may crimp industry rebound
Since 2008, Ward's notes that the average new-car transaction price has increased by more than $3,000 – 13 percent in the last year alone – to a current price of $28,831. To help make these higher prices less of a burden, almost a third of all new loans are for 72 months or longer, but fortunately for consumers, interest rates are at record lows right now. The article points out that higher prices and longer-term loans could lead to more owners finding out they have negative equity when it's time to trade their vehicle in, a worrying thought that suggests the real negative impact of this trend may be deferred. For the automakers, on the other hand, rising transaction prices are likely a welcome sign – especially when factoring in that incentive spending is down as well.
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