Economics expert explains factors behind high car payments

Updated: May. 10, 2023 at 3:00 PM EDT
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ROANOKE, Va. (WDBJ) - Auto loans are costing consumers more, with new car owners paying an average of $730 a month, which is an 11 percent increase from last year, according to industry experts Edmunds.

To understand the shift in costs, Here @ Home spoke with Roanoke College Associate Professor of Economics Michael Enz.

The increase is related to supply and demand in new and used cars and the recent increase in interest rates, Enz said.

The pandemic disrupted the new and used car markets with supply chain issues, causing a drop in inventory at dealerships.

Plus, the Federal Reserve raised interest rates a quarter of a point to sit between 5 and 5.25 percent this month.

Listen to the conversation to understand more about the trends.