Car shoppers have had it with price increases
Car shoppers have had it with price increases
Hamza ShabanFri, October 16, 2026 at 10:00 AM UTC
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More car buyers are exercising their most powerful negotiating tool: walking away.
It probably has something to do with the idea of an $800 car payment, the painful result of near-record prices for new vehicles and stubbornly high interest rates.
Affordability is the key constraint facing publicly traded dealerships, according to Bank of America analysts led by Alexander Perry, in a note on Thursday. In parts and service too, customers are pushing back on pricing and putting off repair work.
Ahead of earnings, BofA is lowering earnings estimates on five major dealers, including Asbury (ABG), AutoNation (AN), and Group 1 (GPI), because of weaker demand for new units and more deferrals on recommended work.
The average transaction price for a new vehicle is now above $50,000, according to a recent analysis by Kelley Blue Book. And it's not just because Americans love their trucks and large SUVs. Two of the most popular, more affordable segments are also driving up the average price. Price increases on subcompact SUVs and compact cars means there is no escape from car inflation.
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BofA's survey of 70 dealers found that vehicle pricing was the most cited constraint on new vehicle sales, at 66%. Financing costs came in as the second most popular reason, at 47%. Inflation and high interest rates, clear as day.
More than half of the dealers reported seeing some pushback on pricing as customers delayed work. And another 11% of dealers said they are losing repair orders altogether as customers balk at the cost.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
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Source: “AOL Money”
