WEST PALM BEACH, Fla. — If you're in the market to buy a car, you have some tough decisions to make.
New car prices continue to climb, according to the latest Consumer Price Index report, while used car prices are dropping.
WPTV looked into why there's more for buyers to consider than the sticker price.
When the latest data shows that buying a new car could cost as much as half of your monthly mortgage payment in Florida, there's increasing interest in used cars. However, every buyer still has to navigate rising interest loan rates.
Anthony Cimo is in the market for a vehicle and has his eyes on buying a new C8 Corvette.
But high-interest rates could make him pump the brakes on a purchase.
"That will play a factor if we are able to purchase another used vehicle, depending on how high the rates are," Cimo said.
The latest Cox Automotive report shows the average monthly payment for a new car is $780. New car prices continue to increase slightly month to month, while used car prices are dropping fast — 11.5 % cheaper than this time last year.
"There's been a massive correction in the used car pricing and you would think to a dealer we would hate that, but it's a great thing," John Giasullo, the owner of Classic Cars of Palm Beach, said. "We can buy at a lower price and certainly sell at a lower price, so we've seen a lot of people now moving back to the used car market."
Giasullo said the challenges come with the interest rates.
"I hate seeing the disappointment on people's faces," Giasullo said.
Typically used cars have higher interest rates than new ones.
"What I'm seeing is a range from 5.16% to 9.34%," Mark Parks, the president of Preveer Corporation, said.
Parks, a financial consultant, said some buyers could be paying $1,000 more in interest for a $30,000 car.
"If your credit is not great, you could be paying double-digit interest rates for a used car," Parks said.
Several factors impact monthly car payments: the price of the car, the down payment and car loan interest rate.
Parks said one way to pay less interest over time is to make higher payments toward your principal.
Giasullo said buyers who are flexible with the kind of car they want have more options. But it might be tougher if your heart is set on one make and model.