COUNCIL BLUFFS, Iowa. (KMTV) — If you need a car the odds are it will cost more than you expect.
Cox Automotive/Moody's Analytics reports that average monthly car payments are at a record high: more than $700 a month. It's a shocking amount to the people who were in downtown Council Bluffs on Tuesday.
"It's a lot of money, especially on top of everything else that folks are spending on their budgets," Christina Jackson said.
"I don't know how young people can even afford a car to go to work and old people that are senior citizens pay for something like that," Bonnie Williams said.
"We take each day into accordance: we plan out our monthly statements, we plan out all the different bills so to have to accommodate a car payment of that much, it's ridiculous," Harold Boltinghouse said.
The monthly car payments do not surprise Joshua Rybin who owns a used car dealership, Real Value Auto.
"From a percentage standpoint, they are significantly higher than what they're used to be. Supply chains, it kind of trickles down from the new car stores: getting vehicles in, getting trade-ins, us being able to get vehicles, the quality of vehicles," Rybin said.
These hefty car payments stem back to the computer chip shortage during the pandemic. Fewer cars were manufactured, which led to more demand for used cars and a hike in prices.
The Bureau of Labor Statistics reports that used car prices have gone up 16.1% compared to a year ago while the prices of new cars have gone up more than %12.
Rybin admits he's lost some customers due to high prices and is noticing a shift in customer patterns.
"I think we've sold some motorcycles specifically because of gas price in general because they get twice to three times as much as cars or SUVs get," Rybin said.
Boltinghouse, who calls himself a working-class guy, knows you need a car in Southwest Iowa to get around.
"You need reliable transportation. If we take away our transportation by raising costs too much, what are we gonna do now?" He said.
The average cost of a new car is now $47,000. Monthly payments vary depending on the down payment and interest rate offered.