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New Cars Are Getting More Expensive, and You Can Guess Who Is to Blame for That

As you may have noticed this week, the average new-vehicle transaction price topped $45,000 last month. You might say that it has to do with dealer markups, and it is linked with supply and demand. And I would not contradict that, except for the fact that another study released this week showed that many new vehicle technologies go unused, despite being paid by the customers.
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Well, this is what I wanted to underline here. People are buying more expensive cars than ever before, and this has led to raising the price of the average new car, at least in the U.S., but other countries follow the trend.

The survey I mentioned above was one conducted by J.D. Power, and 61 percent of owners say they never used their in-vehicle digital market technology, and half of the respondents said they did not need it.

Half of the respondents said they have never used driver/passenger communication technology, and forty percent said they did not need it.

All respondents were owners of new vehicles that were acquired within the last two years, so they most likely bought a vehicle with numerous bells and whistles on the tech front. About half of those customers, and many others who were not a part of the survey, claimed never to need that technology. More than half of these owners have never used the technology described.

In many cases, some technological elements are sold in the form of packages, so you might end up in a car that has some things you did not want anyway, all because the automaker does not want to build said unit without one of the elements in the package. A good example of that kind of technology is gesture control, which is not something that many people want their next car to have.

However, optional equipment such as gesture control (just an example here) manages to slip through an order as it gets included with a package that has other things you might want, such as a larger infotainment screen. In other words, this means that customers do pay for technology that they do not use or need.

Now, I may have watched too many documentaries on the whole minimalism thing (I am yet to sell my possessions and retreat to the smallest apartment possible), yet I see no point in paying for things that you do not intend to use. You may have also seen that motivational poster on the Internet that goes, "we spend money that we don't have to buy things to impress people we do not even like."

While I can relate to the feeling of accomplishment when purchasing a car with all the options on the list checked (which is hard to do these days since many cancel each other out), doing so does not necessarily make the car twice as good as its bare-bones siblings. However, doing so does bring profit for the automaker selling the vehicle, and has the potential of making that vehicle more desirable when it is sold again.

Configuring a vehicle with resale in mind is probably the best possible thing you could do if you insist on buying a new car and simultaneously saving as much money as you can. I find it is also the saddest thing a person can do in the entire process of buying a new car, because they will miss out on enjoying it, and instead become a custodian of the vehicle for an owner who will love it. That is the next one.

So, I may have an unpopular opinion here, and everybody else has the right to disagree, but I think people are just as guilty as automakers for this trend. If someone is willing to pay for something they do not use or want, there will be someone else to sell that product to whoever is willing to pay.

Unfortunately, some people add the numbers on these things, and their work ends up eliminating some versions of some vehicles on the market. Those that are the first to go are those with the smallest profit margins. I would ask you to guess what those are, but I will just tell you — the most affordable versions of each model, especially entry-level ones, bring the lowest margins to any automaker.

If you are considering a volume brand, there is even a risk of losing money on the most affordable product they sell. Think about a bare-bones hatchback or sedan with manually adjustable side-view mirrors and bumpers not painted in the color of the body. There is a reason that version is so undesirable: so that people just spring for the next version in the range, and they spend more.

Fortunately, there is something you can do if your car has technology you do not use. Read the manual and find how what it is and how it works. It was supposed to be the dealer's job to show you, but do not let that stop you from enjoying what you paid for.

Who knows, maybe learning how to use everything your car is equipped with will get you to appreciate what you have more than you did. Or maybe you will figure out how to get your car to dip its passenger-side mirror when reversing and figure out why it does not do that all the time when reversing.

Editor's note: The above article reflects the author''s views on the matter.
This article was not sponsored or supported by a third party.
Tesla Model S shown in photo gallery for illustration purposes.


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