New cars now just for the rich as automakers rake in profits

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New cars are becoming more expensive with lower production and more expensive parts, meaning they're becoming limited to rich buyers only.

for under $17,000. But he found nothing for less than $19,000 and now is looking at models that are over a decade old.

“That’s just the way it may have to be if I want to stay in my price range and not have too high a monthly car bill,” said Sanders, 48, a customer service representative and single dad of two high schoolers. “It’s very frustrating. I wanted a newer vehicle that I felt would be more reliable. With an older used car, you just never know what you’re going to get.”

And for those looking for a new car at a budget price, the options are limited. Domestic automakers stopped building compact cars in the US because they couldn’t make money on them. The dearth of cheaper models means more new cars are being snapped up by affluent consumers. Nearly 30% of the market is from households with annual income of more than $150,000, up from 22% in 2016, said Mark Wakefield, managing director at consulting firm AlixPartners.

 

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