New Car Prices Get Jacked

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Despite the availability of new vehicles for less than $12,000, the average cost of a new car or truck is up significantly from last year.

Car shoppers spent, on average, about $29,217 on a new vehicle in January through May of this year. That's more than $1,000 higher than what buyers spent during the same period last year, Edmunds.com told The Detroit Free Press.

The Ford Focus, for instance, which was rated the best compact car by J.D. Power and Associates in its Initial Quality Study, costs about $16,290 for the 2010 base model according to the automaker's website. Last year, the sedan had a base price of $15,520, according to Carseek.com

Meanwhile, the Cadillac Escalade, rated the best full-sized luxury SUV, costs at least $62,495 now, only slightly higher than last year's model, which sold for a base list price of $62,205, according to Carseek.

Pricing for the Volkswagen Jetta is also going against the grain, as the Associated Press previously reported.  The 2011 Jetta is expected to be sold for just $16,000 compared with $17,735 for the 2010 model, the AP says. 

The reason for the overall rise in the average new car price, however, could be that automakers have been cutting the number of cars they manufacture so they don't have a backlog of vehicles to get rid of at the end of the year, suggests the Free Press.

How much you put down for a brand new vehicle is still negotiable, however. After you read up on a car you may want to purchase and you've taken a test drive, find out how it's usually priced, coolly negotiate a lower price and hold your ground without paying attention to any salesperson's attempt to ellicit your sympathy or intimidate you, suggests IntelliChoice, a car consumer education group. 

If you’re looking to buy a new ride but can’t decide whether to go with a  new or used car, check our recent Q&A “Should I Buy a New or Used Car?”  And if you decide to go with a used car, you’ll want to read “Buy a Car On Craigslist? Do This First.” Or to learn about how do a lease swap, read "Smart Buy: Second-Hand Car Leases."

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