Did you buy a new car this year? If you answered “yes”, chances are good that you paid around $34,077 for it, when all was said and done.
That figure is the average transaction price for new cars sold in 2016, and it marks an all-time high according to Edmunds.com.
In worse news for shoppers, the upward trend shows no sign of slowing. Average prices have climbed 2.7 percent since last year and a whopping 12.6 percent since 2011. Edmunds expects the figure to climb by roughly $1,000 over the course of next year, hitting $35,000 by December 2017.
Why such a sharp increase? It’s largely because of strong demand for pickups and SUVs, which now make up 62 percent of the U.S. market. Customers have flocked to those bigger, pricier models in recent years for at least three reasons:
1. Low fuel prices, which means that filling up the tanks of those less-efficient vehicles isn’t as painful as it was just a few years ago, when the average price of gas hovered around $4.00 a gallon.
2. The gradually improving U.S. economy, which has driven up demand for work vehicles for construction, deliveries, and such.
3. Lower interest rates, longer loans, and increased interest in leasing, all of which have encouraged consumers to buy as much car as they can afford (or possibly more).
The news doesn’t get much better for used-car shoppers. Today’s prices have soared so high that people who might’ve previously bought new vehicles are now entering the used-car market, and that’s put the squeeze on supply–which has, of course, driven up prices.