Are Car Prices High Right Now

Car prices, especially for SUVs, remain elevated due to supply chain issues, high demand, and inflation. While prices have slightly eased from 2022 peaks, they’re still well above pre-pandemic levels. Buyers should research, negotiate, and consider timing to get the best deal.

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Are Car Prices High Right Now? A Look at the Current SUV Market

If you’ve been thinking about buying a new or used SUV lately, you’ve probably noticed something: prices are still pretty steep. Whether you’re browsing dealerships online or walking the lot, the numbers on the window stickers might make you do a double-take. So, are car prices high right now? The short answer is yes—especially when it comes to SUVs.

Over the past few years, the automotive market has gone through major changes. The pandemic, supply chain breakdowns, and shifts in consumer behavior have all played a role in driving up costs. While there have been small improvements, the reality is that buying a vehicle today still feels more expensive than it did just a few years ago. For SUV shoppers, this trend is even more noticeable. SUVs dominate new car sales, and their popularity means manufacturers can keep prices high.

But it’s not all bad news. Understanding why prices are where they are—and knowing how to navigate the market—can help you make a smarter, more confident purchase. Let’s break down what’s happening with car prices today and what it means for you as a buyer.

Why Are Car Prices Still So High?

Several key factors are keeping car prices elevated, even as the market begins to stabilize.

Supply Chain Challenges Continue

One of the biggest reasons car prices remain high is the ongoing impact of supply chain disruptions. The global shortage of semiconductors—tiny chips essential for modern vehicles—has slowed down production for years. Even though the worst of the shortage has passed, manufacturers are still playing catch-up.

For example, a popular midsize SUV like the Honda CR-V or Toyota RAV4 might have a waiting list or limited trim options. With fewer new vehicles hitting the lots, dealerships have less incentive to offer big discounts. This scarcity drives up prices across the board.

High Demand for SUVs

SUVs are the most popular vehicle type in the U.S., and that demand shows no sign of slowing. Families love their space, safety features, and versatility. Off-road enthusiasts appreciate their capability, and city drivers enjoy the higher seating position.

Because SUVs are in such high demand, automakers can charge premium prices—especially for top trims and hybrid or electric models. A new Ford Explorer or Hyundai Santa Fe can easily cost $45,000 or more, and that’s before adding options like all-wheel drive, advanced safety tech, or premium interiors.

Inflation and Rising Production Costs

It’s not just cars—everything costs more these days. Inflation has driven up the price of raw materials like steel, aluminum, and lithium (used in EV batteries). Labor costs have also increased, and automakers are passing some of these expenses onto consumers.

Even if a vehicle’s MSRP hasn’t changed much, the total cost of ownership—including insurance, fuel, and maintenance—has gone up. This makes the overall affordability of owning an SUV more challenging for many buyers.

New vs. Used SUV Prices: What’s the Difference?

When it comes to pricing, there’s a noticeable gap between new and used SUVs—but both categories are affected by the same market forces.

New SUV Prices: Still at a Premium

New SUV prices have come down slightly from the record highs of 2022, but they’re still well above pre-pandemic levels. According to industry reports, the average transaction price for a new vehicle in 2024 is around $48,000—and SUVs often exceed that.

For instance, a base-model Toyota RAV4 starts around $28,000, but fully loaded trims can push past $40,000. Luxury SUVs like the BMW X5 or Mercedes-Benz GLE easily start above $60,000. Add in destination fees, taxes, and dealer markups, and the final price can be even higher.

Used SUV Prices: Stabilizing but Still High

The used car market saw a massive spike during the pandemic, but it’s begun to cool. However, used SUV prices remain elevated due to strong demand and fewer trade-ins. Many owners held onto their vehicles longer during the chip shortage, reducing the supply of used cars.

A 2021 Honda CR-V with moderate mileage might still cost $28,000–$32,000—close to what a new base model costs. While that’s better than the $35,000+ prices seen in 2022, it’s still a significant investment.

Certified Pre-Owned (CPO) SUVs: A Smart Middle Ground

One smart option is to consider a certified pre-owned SUV. These vehicles are typically 1–3 years old, have low mileage, and come with extended warranties and thorough inspections. While they cost more than regular used cars, they offer peace of mind and often better financing rates.

For example, a CPO 2022 Subaru Outback might cost $30,000 but include a 7-year/100,000-mile warranty. That’s a solid value compared to a brand-new model at $38,000.

How Interest Rates Are Affecting Car Buying

Even if car prices don’t go up further, rising interest rates are making monthly payments more expensive.

Auto Loan Rates on the Rise

The Federal Reserve’s efforts to combat inflation have led to higher interest rates across the economy—including auto loans. As of 2024, average auto loan rates for new cars are around 7–8%, and used car loans can be even higher.

This means that even if you find a great deal on an SUV, your monthly payment could still be steep. For example, a $40,000 loan at 7.5% over 60 months results in a monthly payment of about $750. That’s a big chunk of change for many budgets.

Longer Loan Terms: A Double-Edged Sword

To keep payments manageable, many buyers are choosing longer loan terms—72 or even 84 months. While this lowers the monthly cost, it increases the total interest paid over time. You could end up paying $10,000 or more in interest on a $40,000 loan.

It’s important to weigh the pros and cons. A lower monthly payment might fit your budget now, but you could end up “upside down” on the loan—owing more than the SUV is worth—if you need to sell or trade it in early.

Tips for Buying an SUV in Today’s Market

Despite high prices, you can still find a great deal on an SUV if you’re strategic. Here are some practical tips to help you save.

Shop During Slower Months

Dealerships are often more willing to negotiate during slower sales periods. Winter months (January–March) and late summer (August) tend to have lower foot traffic, giving you more leverage. You might find better incentives or discounts during these times.

Get Pre-Approved for Financing

Before you visit a dealership, get pre-approved for a loan from your bank or credit union. This gives you a clear budget and strengthens your negotiating position. Dealers may try to offer financing, but having your own rate in hand helps you compare and choose the best deal.

Be Ready to Walk Away

One of the most powerful tools in any negotiation is the ability to walk away. If the price isn’t right or the dealer isn’t willing to budge, don’t be afraid to leave. There are plenty of SUVs on the market, and patience often pays off.

Consider Slightly Older Models

Instead of buying the latest model year, consider a 1- or 2-year-old SUV. These vehicles have already taken the biggest depreciation hit but still offer modern features and reliability. You could save thousands while getting nearly the same experience.

Watch for Incentives and Rebates

Automakers often offer cash rebates, low-interest financing, or loyalty bonuses—especially at the end of the model year. Check manufacturer websites and dealer promotions regularly. For example, Ford might offer $2,000 cash back on a 2023 Explorer, making it a better deal than a 2024 model with no incentives.

Looking Ahead: Will Car Prices Go Down?

So, what’s the future of car prices? Experts predict a gradual decline, but don’t expect a return to 2019 levels anytime soon.

Inventory Is Improving

New car inventory is slowly recovering. More vehicles are being built and shipped, which should help ease price pressures. However, it will take time for supply to fully meet demand.

Electric and Hybrid SUVs Are Changing the Game

The rise of electric and hybrid SUVs is also influencing pricing. While EVs often have higher upfront costs, federal and state incentives can help offset the price. As battery technology improves and production scales up, these vehicles may become more affordable.

Market Stabilization, Not a Crash

Most analysts expect a “soft landing” rather than a price crash. Prices may dip slightly, but they’re likely to remain above historical averages for the foreseeable future. The best approach is to focus on value, not just price.

Conclusion: Smart Buying in a High-Price Market

Are car prices high right now? Yes—especially for SUVs. But that doesn’t mean you can’t find a great vehicle at a fair price. By understanding the market, doing your research, and using smart negotiation tactics, you can make a confident purchase.

Remember, the goal isn’t just to get the lowest sticker price—it’s to find the best overall value. Whether you choose a new, used, or certified pre-owned SUV, focus on reliability, features, and long-term costs. With patience and preparation, you can drive away in the SUV that fits your life—without breaking the bank.

Frequently Asked Questions

Are car prices expected to drop in 2024?

Car prices are expected to stabilize or decline slightly in 2024 as inventory improves and demand cools. However, they are unlikely to return to pre-pandemic levels due to ongoing inflation and production costs.

Why are SUV prices higher than other vehicles?

SUVs are more expensive due to high consumer demand, larger size, advanced features, and higher production costs. Their popularity allows manufacturers to charge premium prices, especially for top trims and hybrid models.

Is it better to buy a new or used SUV right now?

It depends on your budget and needs. New SUVs offer the latest tech and warranties but cost more. Used SUVs are cheaper but may have higher mileage. Certified pre-owned models offer a good balance of value and reliability.

How can I get the best deal on an SUV?

Shop during slower months, get pre-approved for financing, compare multiple dealers, and be ready to negotiate. Watch for manufacturer rebates and consider slightly older models to save money.

Do high interest rates affect SUV affordability?

Yes. Higher auto loan rates increase monthly payments and total loan costs. Even if the SUV price stays the same, financing it over time becomes more expensive, so consider shorter loan terms when possible.

Are electric SUVs more expensive than gas-powered ones?

Electric SUVs typically have higher upfront prices due to battery technology, but they may qualify for tax credits and have lower fuel and maintenance costs over time. Prices are expected to decrease as production scales up.