Answer: More than $40,000; monthly payment of $581

Questions:

• Why do you think that people are spending so much on new cars?
• What happens to the value of a car once you drive it off the dealer's lot? 
• Do you think about cars as an investment? Explain. 

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Marketplace audio):

"New car and truck sales were down 15% last year. That may not be surprising, considering the shutdowns and high unemployment in the spring. But what might come as a surprise is that the average price of new vehicles that did sell was $40,000 in the fourth quarter. That’s the highest ever."

However, for those who turned to the used car market, prices also soared, "The prices of those vehicles were also pushed higher, according to Kristin Dziczek, with the Center for Automotive Research. She said, “We really saw skyrocketing prices in the used-car market.”

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Wondering what the average car payment is by state? Here's a map. 

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 More car-related Questions of the Day here:

• What's the average monthly payment for a new car purchased in 2019?
• You purchase a new car and a year later sell it back to the dealer. What is the loss in value you should expect, as a percentage of the original purchase price?
• What's the cost (in $s) of not shopping around for an auto loan?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.