Amid reports of rising car prices, it turns out that consumers seem to understand that there’s no way around that if they want to buy a new car today. In a study to examine just how receptive buyers are to higher prices, Cox Automotive found that 40% would not shy away from being charged a 12% premium.

Given that the average new-car MSRP in the U.S. is almost $42,000, that means four in 10 people would accept a price that’s $5,000 more than what the sticker says. Despite the higher expected prices, only 37% said they’d wait to buy a vehicle, with 70% of those saying they’ll wait at least three months to purchase and 23% saying they’ll look at used vehicles instead. 

"The current auto market, with low inventory and high demand, is anything but normal. And we know it’s driving people away," Cox Automotive spokesman Mark Schirmer said.

 

Cox’s research shows that 87% of consumers recognize the issue is impacting both domestic and import nameplates. 

As the issue is industry-wide, 73% of consumers are expecting to face higher prices at dealerships, and nearly 60% believe they will find lower incentives. One main reason for this non-sticker shock is the limited supply times that are upending the industry. Cox’s survey, conducted in May, found that 75% of car shoppers knew about the global semiconductor chip shortage and that it was wrecking havoc on new-car production. Almost as many, 73% said they expected to see higher prices at the dealership, and almost 60% said they expected that any incentives they might find would be lower than before.

However, Cox’s Schirmer also said: "Our recent research shows nearly 40% of buyers who were considered ‘in market’ for a vehicle are now dropping out or deciding to delay their purchase. High prices and limited selection likely are the cause.

"For the most part, car-buying in America continues to be driven by the deal," he said, noting that even under current conditions, "Older shoppers — and specifically older male shoppers — [are] less willing to pay over sticker. These older buyers are a cohort we call ‘Straight Shooters,’ and they are experienced vehicle buyers, with plenty of good deals in their past. Paying above sticker is an unnatural act for this group."