Autoline on Autoblog with John McElroy

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Car Prices Will Climb For Years

Have you’ve been watching car prices lately? They seem to go up every month. Forget everything you’ve been reading about sales incentives, bargain leases or low-cost financing. They just mask the fact that automakers are quietly bumping up MSRP’s every chance they get.

In other words, they quietly raise the price of a car and then loudly announce the deals they’re offering. Sure, you get a discount. But that discount comes off an ever-higher price.

I’ve said it before and I’ll say again. By 2015, the average new car in the American market is going to cost about $35,000. I’m not talking about the MSRP, which is already at an average of $33,000. I’m talking about the transaction price, what people actually pay for a car.

There are a variety of reasons why this is happening. But it basically comes down to this: even though car sales are very weak, we’re actually in a seller’s market. The planets are in alignment for automakers to raise their prices, especially for General Motors, Ford and Chrysler. And it’s only going to get worse.

John McElroy is host of the TV program “Autoline Detroit” and daily web video “Autoline Daily”. Every week he brings his unique insights as a Detroit insider to Autoblog readers.

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Autoline on Autoblog with John McElroy originally appeared on Autoblog on Fri, 30 Jul 2010 16:32:00 EST. Please see our terms for use of feeds.

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