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<ul><li>While overall retail auto sales grew by double digits however when compared to the pre-pandemic month of September 2019, sales were down 4%.</li><li>The two-wheeler segment is yet to show signs of full recovery due to rising prices of vehicles and <keyword id="15161814" type="General" weightage="20" keywordseo="pricier-vehicle-loans" source="Orion">pricier vehicle loans</keyword> post RBI rate hike.</li><li>FADA believes that while the <keyword id="7744922" type="General" weightage="20" keywordseo="auto-retail-sales" source="Orion">auto retail sales</keyword> will be better than the last two festive seasons, it will still remain below pre-Covid levels of October 2019.</li><li>Overall, FADA continues to remain optimistic for the month of October due to the ongoing festive season.</li></ul>Retail auto sales in September rose 11% compared to a year ago thanks to an early start to the festive season, monthly sales data from the <keyword id="1692051" type="General" weightage="20" keywordseo="Federation-of-Automobile-Dealers-Associations" source="Orion">Federation of Automobile Dealers Associations</keyword> (FADA) showed. However, when compared to the pre-pandemic month of September 2019, sales were down 4%, FADA said. “Auto retail for the month of September’22 saw an overall growth of 11%. September witnessed both, the inauspicious period of Shradh (a.k.a Pitru Paksha) from 10-25th September and festive period, which began with Navratri on 26th September. Due to this, the full potential for the month was not realised as it should have been,” FADA President Manish Raj Singhania said. Two-wheeler segment remains a drag; dealers anticipate best festive season this year The two-wheeler segment is yet to show signs of full recovery. Sales for September fell as much as 14% from pre-Covid times despite a growth of 9% from September 2021. Rising prices of vehicles due to increase in input costs along with pricier vehicle loans post RBI rate hike have impacted sales. “Due to increased input costs, 2W companies raised prices by 5 times in the past one year. Apart from this, RBI’s fight with inflation saw rate hikes, which continued to make vehicle loans expensive. While India is showing revival signs, Bharat is yet to perform. 2W, especially entry- level vehicles, are finding extremely less buyers thus dragging the entire segment,” said the FADA statement. Going ahead, due to the festive season there is demand build up for premium bikes. “The 2-W space also witnessed healthy double-digit growth led by innovative offerings in (the) premium segment by Royal Enfield brand at Eicher Motors and channel inventory build-up before the festive season by the industry leader,” FADA said. FADA believes that while the auto retail sales will be better than the last two festive seasons, it will still remain below pre-Covid levels of October 2019. “The enquiry level in (the) 2W segment is showing positive movement. If this segment, especially entry-level 2W, also performs well improving its growth to low double digits, overall auto retail will see higher growth compared to last 2 festivals but may still lag pre-Covid numbers of October’19,” said FADA in a statement. The passenger vehicles segment continues to show extremely healthy figures by growing 44% since pre-Covid times. Sales of three-wheelers, tractors and commercial vehicles also rose – registering an increase of almost 6%, 37% and 17% respectively from September 2019. All India vehicle retail data for September’22 <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Category </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sep 2022 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% change on year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% change since pre Covid (Sep 2019) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Two wheeler </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10,15,702 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">9.02% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-14.05% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Three wheeler </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">63,915 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">71.94% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.53% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">PV </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2,60,556 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">9.17% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">44.47% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tractor </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">52,595 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.49% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">37.06% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CV </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">71,233 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">18.87% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">16.89% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">LCV </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">43,076 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">14.76% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12.24% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">MCV </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4,847 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.55% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">16.43% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCV </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21,318 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">39.60% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23.11% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">14,64,001 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.94% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-3.80% </td></tr></tbody></table> “Better availability due to easing semiconductor supply, new launches and feature-rich products kept customers glued to dealerships for getting their favourite vehicles during the auspicious period. The waiting period continues to range between 3 months to 24 months especially for SUVs and compact SUVs, which have become the absolute choice for today’s customers,” said the FADA statement. Besides, dealers anticipate this to be the best festive in a decade for the PV segment as FADA expects even higher sales in October. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/policy/economy/news/slow-recovery-of-low-income-households-slowed-down-indias-economic-recovery-kotak-report/articleshow/94639413.cms">Slow recovery of low income households slowed down India's economic recovery: Kotak report</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-5g-prices-may-be-affordable-for-now-but-expected-to-increase-after-wider-rollout/articleshow/94636173.cms">Reliance Jio and Airtel 5G prices may be affordable for now but expected to increase after wider rollout</a>

Retail auto sales grow 11% in September, but still below pre-Covid levels, says FADA

<ul class="summary-list"><li>The seller's market for <keyword id="11939507" type="UNKNOWN" weightage="60" keywordseo="used-cars" source="Orion">used cars</keyword> and vehicles is starting to wobble.</li><li>Prices for <keyword id="13913914" type="UNKNOWN" weightage="60" keywordseo="used-vehicles" source="Orion">used vehicles</keyword> fell 0.4% in April, marking a third consecutive month of declines.</li></ul>The seller's market for used cars just celebrated its one-year anniversary, yet it's already on its last legs.Used vehicles were hit hardest by rising <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> as the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> reopened and spending boomed in early 2021. Pent-up demand for cars slammed into the global semiconductor shortage, crimping supply for both new and previously owned vehicles. That powered a massive price spike. Used car and truck prices <a href="https://www.businessinsider.com/used-car-prices-inflation-gas-shortage-stockpiling-drivers-slammed-reopening-2021-5">rose more than 10%</a> in April and June of last year and counted for roughly one-third of overall inflation throughout last spring.Headline inflation has since soared to levels not seen since the 1980s, but the used vehicle prices that powered the initial surge are now falling back to earth. Used car and truck prices fell 0.4% in April, according to government data published Wednesday. That follows a 3.8% decline in March and a 0.2% drop through February.After months of extraordinarily large price hikes, it might finally be a good time for car buyers.Prices for used cars and trucks now sit about 48% higher than pre-pandemic levels, Insider calculated with data from the Bureau of Labor Statistics. While that's still a hefty price hike for a 28-month period, it's down significantly from the January peak when prices were about 54% higher.Other measures show the market continuing to cool off through April. The <a href="https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html">Manheim Used Vehicle Value Index</a> fell to 221.2 last month, down from the March reading of 223.5. That's the lowest level since September 2021. The measure also shows used vehicle values peaking in January, signaling the recent slump is likely a prolonged downtrend.Several factors stand to extend the cooldown. Spending on durable goods — think vehicles, furniture, and appliances over food and medicine — declined through February and March, alleviating some of the demand that's boosted inflation. The pandemic-era drop in new vehicle inventories <a href="https://fred.stlouisfed.org/series/AUINSA">has also slowed through 2022</a>. If the supply of new cars recovers, that will likely alleviate supply pressures in the used-vehicle market as more cars are resold.To be sure, rising interest rates present a new hurdle for buyers looking to take advantage of falling prices. The Federal Reserve <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">lifted its benchmark interest rate</a> by half a percentage point in May, doubling the size of its typical rate hikes in a bid to more aggressively ease inflation. The central bank's rate increases affect borrowing costs throughout the economy, and while most auto loans have fixed rates, the higher rate will make loans pricier in the months ahead.Fed Chair Jerome Powell hinted earlier in May that more double-sized rate hikes are "<a href="https://www.businessinsider.com/federal-reserve-interest-rate-hikes-double-sized-future-meetings-powell-2022-5">on the table</a>" for the Fed's summer meetings, meaning vehicle financing will only get more expensive through 2022.Still, the decline in headline prices will bring much-needed relief for buyers after months of double-digit price increases and widespread shortages. Used vehicles might not completely be a buyers' market just yet, but it's moving in that direction.

It's finally a better time to buy a used car

The offers and details on this page may have updated or changed since the time of publication. See our article on <a href="https://www.businessinsider.com/china-blacklisting-debtors-trains-hotels-bankruptcy-2024-4" target="_blank">Business Insider</a> for current information.<ul class="summary-list"><li>China is punishing citizens who can't repay their debts by cutting off access to social services. </li><li>So-called deadbeat debtors are blacklisted, facing travel restrictions and government jobs.</li></ul>China wants its citizens to repay their debts — and it is willing to punish those who don't.That means that delinquent debtors are restricted from accessing some services in the country, like high-speed trains and air travel. Some, according to a Wall Street Journal <a target="_blank" href="https://www.wsj.com/world/china/chinas-punishment-for-people-with-bad-debts-no-fast-trains-or-nice-hotels-bde24da2?mod=hp_lead_pos7">report</a>, are forbidden from government jobs and denied pricier insurance policies, vacations, and even nice hotels.Outstanding debtors are placed on a <a target="_blank" href="https://www.businessinsider.com/china-phones-have-dial-tone-encouraging-you-to-make-debtors-pay-up-2019-5">government delinquency blacklist</a>. Informally, these people are referred to as "laolai" — roughly translated, "deadbeat debtors." And the number of names on the list is about 8.3 million, according to the Journal — <a target="_blank" href="https://www.businessinsider.com/china-economy-blacklisted-borrowers-debt-defaults-consumers-fed-rates-inflation-2023-12">a jump of nearly 50% since 2019</a>.It's not just formal restrictions they face; some phone companies in China have gone as far as <a target="_blank" href="https://www.businessinsider.com/china-phones-have-dial-tone-encouraging-you-to-make-debtors-pay-up-2019-5">assigning special ringtones to debtors</a> to warn other people that they are talking to someone on the brink of insolvency.However, procedures for personal insolvency in China are few and far between. Unlike most other countries, China doesn't allow most people to write off their debts with bankruptcy, per the Journal.Instead, the Chinese government can take steps like seizing a debtor's income as restitution, leaving them with a small allowance so they can cover living expenses.That isn't always enough, though, as one man found when he petitioned to raise his monthly income allowance to help pay for a newborn child. Rather than approving the increase to 12,000 yuan, or approximately $1,600, the Journal reported that the court cut his allowance by nearly 40%. In China, a country that traditionally values saving, some consider <a target="_blank" href="https://www.ft.com/content/bb3166ea-8b1f-11e8-b18d-0181731a0340">borrowing money to be taboo</a>. That's backed by <a target="_blank" href="https://brooklynworks.brooklaw.edu/cgi/viewcontent.cgi?article=1975&amp;context=bjil">a 2021 study,</a> which noted that in Chinese society, "many still view bankruptcy as a vehicle for feckless shirkers to escape their debts."That's left many debtors feeling trapped by the system, which can make it increasingly difficult for them to pay off seemingly insurmountable liabilities.China's debtor blacklist is technically separate from its "<a target="_blank" href="https://www.businessinsider.com/china-social-credit-system-punishments-and-rewards-explained-2018-4">social credit system</a>," but both have similar functions — namely, tracking individual behavior and rewarding or punishing people for it.The system, which is not yet fully implemented, has penalized citizens for everything from social media posts to <a target="_blank" href="https://www.businessinsider.com/china-social-credit-system-things-you-can-do-wrong-and-punishments-2018-4">jaywalking</a>. The worst offenders may face trouble getting loans and travel restrictions — similar to the experience of blacklisted debtors.The Chinese economy <a target="_blank" href="https://www.businessinsider.com/china-economy-us-trade-markets-investors-policy-beijing-finance-outlook-2024-1">has slumped after exiting the pandemic</a>. Researchers have warned of a <a target="_blank" href="https://www.businessinsider.com/china-economy-housing-market-risks-debt-deflation-spiral-stocks-investors-2024-2">"debt-deflation spiral"</a> that could make the situation for Chinese households even worse.

Vacations, planes, and high-speed trains are off limits if you're in too much debt in China

<ul class="summary-list"><li>Used-car prices have increased by 52% over the last three years, far outpacing growth in American wages. </li><li>Popular cars like the Toyota RAV4 and Ford Mustang aren't affordable to buy used anymore, according to a new study. </li></ul>Beloved cars like the Toyota RAV4 and Ford Mustang have become out of reach for regular Americans, according to a <a href="https://www.iseecars.com/car-affordability-study#v=202210">new study</a> from the automotive search engine iSeeCars. A shortage of new vehicles and other pandemic-related factors have driven car prices through the roof in recent years. iSeeCars compared skyrocketing vehicle costs to <a href="https://www.businessinsider.com/what-is-quiet-fleecing-wages-pay-productivity-economy-recession-inflation-2022-9">relatively stagnant median American wages</a> and found that dozens of models that would have been affordable in 2019 are now unattainable in 2022. "From August of 2019, well before the pandemic lockdowns started, to August of 2022, new car prices increased by almost 29 percent, and three-year-old used car prices increased by 52 percent, but incomes increased by only 13%," said Karl Brauer, executive analyst at iSeeCars.<div type="image" title="The 2022 Toyota RAV4 Prime XSE plug-in hybrid SUV." height="1667" width="2500" msid="95119860" hostid="261"></div>To calculate if something is affordable or not, the study considered today's typical rates for car loans and assumed that yearly payments shouldn't exceed 10% of a household's income. It identified 33 used models that were affordable in 2019 but aren't anymore. Here are the top 10, ranked in descending order of list price for a three-year-old model. A three-year-old used car needs to cost $25,542 or less to be affordable under iSeeCars' criteria. <div type="image" title="Used car affordability chart from iSeeCars.com" height="778" width="1052" msid="95119864" hostid="261"></div>Other popular models that made the list include the Honda CR-V ($30,193), Subaru Forester ($29,759), and Toyota Camry ($27,404). High-volume models like these would typically be relatively inexpensive on the secondhand market, since there should be plenty of them available. But not in today's upside-down car market. The rising costs have forced buyers to enter longer loan terms with less money down or choose older, less desirable vehicles, iSeeCars said. For much of the pandemic, carmakers around the globe have struggled with supply-chain issues (like a shortage of computer chips) that have severely limited their ability to make new cars. Although the supply of used and new vehicles at US dealers has been recovering gradually, it's still <a href="https://www.coxautoinc.com/insights/">significantly lower than historic levels</a>, according to Cox Automotive. Car companies have <a href="https://www.businessinsider.com/will-car-prices-drop-back-to-normal-or-stay-high-2022-5">leaned into their pricier models</a> and reduced incentives, pushing the average transaction price for a new car to $48,000 in September. With new cars expensive and in short supply, buyers have flooded the used market, driving prices up there as well.

Some of America's favorite cars, like the Toyota RAV4 and Prius, are now vastly unaffordable thanks to flat wages and astronomical prices

<ul class="summary-list"><li>Elon Musk has blasted the Fed's interest-rate hikes more than 20 times in the past seven months.</li><li>The Tesla CEO has argued they're unnecessary, dangerous, and harmful to companies.</li></ul>Elon Musk has <a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-stock-federal-reserve-interest-rates-dollar-2022-10">called out</a> the Federal Reserve more than 20 times in the <a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-federal-reserve-interest-rates-inflation-deflation-recession-2022-9">past seven months</a>, as he continues to rail against the US central bank for hiking interest rates too aggressively.In a bid to curb historic inflation, the Fed has raised its benchmark rate from virtually zero to about 5% within the past 14 months. Musk — the CEO of <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a>, Twitter, and SpaceX — has complained the hikes aren't needed, they're <a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-twitter-economy-federal-reserve-recession-interest-rates-2022-11">boosting the risk</a> of a recession, and they're <a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-bargain-stock-price-fed-inflation-recession-rates-2022-12">hurting Tesla</a> by making its vehicles pricier and pulling down its stock price. The tech billionaire has also <a href="https://markets.businessinsider.com/news/stocks/elon-musk-fed-interest-rates-banking-crisis-inflation-recession-ackman-2023-3">warned</a> that higher rates are heaping pressure on banks, and might contribute to a <a href="https://markets.businessinsider.com/news/stocks/credit-crunch-us-bank-crisis-stock-corporate-earnings-recession-svb-2023-4">credit crunch</a>. He's blasted the central bank in tweets, on Tesla's earnings calls, and during media interviews.<h2>Here's a roundup of Musk's criticisms of the Fed during the past 7 months:</h2>1. "A major Fed rate hike risks deflation." (<a href="https://twitter.com/elonmusk/status/1568383953370767365" target="_blank" rel="noopener">September</a>)2. "The Fed is raising interest rates more than they should, but I think they'll eventually realize that and bring it back down again. The Fed is not listening because they're looking at the rearview mirror instead of looking out the front windshield." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-twitter-warren-buffett-q3-earnings-fed-buyback-2022-10">October)</a>3. "Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-twitter-economy-federal-reserve-recession-interest-rates-2022-11">November</a>)4. "If the Fed raises rates again next week, the recession will be greatly amplified." (<a href="https://twitter.com/elonmusk/status/1601298737984249857" target="_blank" rel="noopener">December</a>)5. "Tesla is executing better than ever! We don't control the Federal Reserve. That is the real problem here." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-stock-price-federal-reserve-interest-rates-hikes-2022-12">December</a>)6. "I keep saying that Fed rate is insane, because data I'm seeing says we're already in deflation." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-bargain-stock-price-fed-inflation-recession-rates-2022-12">December</a>)7. "At risk of stating obvious, beware of debt in turbulent macroeconomic conditions, especially when Fed keeps raising rates." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-stock-sales-twitter-debt-inflation-recession-fed-2022-12?utm_medium=ingest&amp;utm_source=markets">December</a>)8. "At the risk of being repetitive, these Fed rate increases might go down in history as most damaging ever." (<a href="https://twitter.com/elonmusk/status/1605955144000032768" target="_blank" rel="noopener">December</a>)9. "It's blowing my mind that the Fed has raised rates so high. The economy right now is like a car driving around on a cliffside road, and the Fed is driving it by looking at a video taken of the rearview mirror that's three months old. This is not a good way to drive a car on a windy cliff road. I think we're in for a hard landing." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-stock-market-tesla-sales-buybacks-twitter-fed-recession-2022-12">December</a>)10. "I wonder what would have happened in 2009 if the Fed had raised rates instead of lowering them." (<a href="https://twitter.com/elonmusk/status/1614105828205760513" target="_blank" rel="noopener">January</a>)11. "The higher the rates, the harder the fall." (<a href="https://twitter.com/elonmusk/status/1614119750627459074" target="_blank" rel="noopener">January</a>)12. "Fed rate increases make cars more expensive for consumers, increasing the difficulty level for automotive companies." (<a href="https://twitter.com/elonmusk/status/1616134378064859136?lang=en" target="_blank" rel="noopener">January</a>)13. "Every time Fed raises rates, they're increasing monthly payments for anything bought with debt." (<a href="https://twitter.com/elonmusk/status/1619052945483632643" target="_blank" rel="noopener">January</a>)14. "Maximum skill with monetary policy is extremely important in this role! A bad Fed decision affects the lives of everyone." (<a href="https://twitter.com/elonmusk/status/1628845480628355073" target="_blank" rel="noopener">February</a>)15. "The Fed is operating with way too much latency in their data. Rates need to drop immediately." (<a href="https://twitter.com/elonmusk/status/1636928718173003776" target="_blank" rel="noopener">March</a>)16. "'Once again, we are confidently wrong' – The Fed." (<a href="https://twitter.com/elonmusk/status/1636950080979714050" target="_blank" rel="noopener">March</a>)17. "Fed needs to drop the rate by at least 50bps on Wednesday." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-fed-interest-rates-banking-crisis-inflation-recession-ackman-2023-3">March</a>)18. "A major driver of depositor flight is people moving money from low interest savings accounts to high interest money market (Treasury Bill) accounts. This foolish rate hike will worsen depositor flight." (<a href="https://twitter.com/elonmusk/status/1638614961038712833" target="_blank" rel="noopener">March</a>)19. "You're welcome, now if only you were the actual head of the Fed!" (<a href="https://twitter.com/search?q=(fed)%20(from%3Aelonmusk)&amp;src=typed_query" target="_blank" rel="noopener">April</a>)20. "Every time the Fed raises the interest rates, that's equivalent to increasing the price of a car. For most people, their ability to buy a car is a function of can they make the monthly payment or not. If interest rates are really high, like they are right now, in some cases, people can't get a loan at all." (<a href="https://markets.businessinsider.com/news/stocks/elon-musk-tesla-stock-economy-fed-rates-layoffs-credit-crunch-2023-4">April</a>)21. "The data with which the Federal Reserve is making decisions has too much latency." (<a href="https://twitter.com/elonmusk/status/1651453301639069697" target="_blank" rel="noopener">April</a>)

Elon Musk has called out the Fed more than 20 times for hiking interest rates too much. Here's a roundup of his attacks on the central bank.

<ul class="summary-list"><li>US <keyword id="11931579" type="UNKNOWN" weightage="60" keywordseo="retail-sales" source="Orion">retail sales</keyword> unexpectedly fell 0.3% in May as <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> accelerated again.</li><li>The print landed below the median estimate of 0.2% growth and showed a slowdown from April's pace.</li></ul>Americans' <keyword id="11909676" type="UNKNOWN" weightage="60" keywordseo="spending" source="Orion">spending</keyword> at stores, restaurants, and bars unexpectedly tumbled through May as inflation accelerated to an even faster pace.Retail sales fell 0.3% last month to $672.9 billion, the <a href="https://www.census.gov/retail/marts/www/marts_current.pdf">Census Bureau</a> announced Thursday. Economists surveyed by Bloomberg anticipated an increase of 0.2%. The print reflects slower spending growth than the 0.7% gain seen through April.The April sum was revised to $674.7 billion from $677.7 billion.Core retail sales, which strip out spending on cars and vehicle parts, gained 0.5% through the month. That still landed below the median estimate of a 0.8% gain.The report shows Americans starting to ease their spending activity as inflation runs even hotter. Prices for common goods and services <a href="https://www.businessinsider.com/inflation-report-cpi-may-gas-prices-federal-reserve-rate-hikes-2022-6">surged 8.6% in the year through May</a>, according to data out Friday, marking the fastest inflation since December 1981. The retail sales data suggests those soaring prices are finally starting to erode Americans' demand.Spending eased the most at car dealerships and parts stores, with the category posting a 3.5% decline in sales through May. Electronics and appliance stores followed with a 1.3% decline in sales. Health and personal care stores, nonstore retailers, and furniture stores also saw sales decline last month.Gas stations notched the largest jump in sales, with spending up 4% in May. Higher gas prices powered at least some of the uptick. The national average price for a gallon of gasoline hit multiple record highs throughout the month as strong demand continued to outstrip supply. When adjusted for price growth, sales at gas stations declined slightly throughout the month.Spending at grocery stores rose 1.2%, and department stores followed with a 0.9% gain in sales.Spending was relatively unchanged at general merchandise stores, clothing shops, and building material and garden stores.The slight decline in broad spending could mark the start of a longer cooldown of consumer demand. The inflation problem was borne out of too much demand chasing down too little inventory, and with supply chains far from operating at full capacity, the Federal Reserve has prioritized weakening demand to slow price growth. The central bank has already lifted interest rates twice and is expected to issue another larger-than-usual rate hike Wednesday afternoon. Those increases lift borrowing costs throughout the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>, making mortgages, car loans, and credit card debt pricier.Cooling inflation by easing demand is a risky venture, however. Raising interest rates too slowly can allow inflation to continue climbing. Yet acting too quickly can slow the economy too much and bring growth to a heel. With prices surging at the fastest pace in four decades and demand only just starting to show signs of slowing, all eyes will be on the Fed as it takes its next step to curb inflation.

Americans' spending at stores and restaurants unexpectedly sank in May amid even higher inflation

<ul class="summary-list"><li>The May <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword> report showed prices soaring at the fastest pace since 1981.</li><li>The <keyword id="11894209" type="UNKNOWN" weightage="60" keywordseo="fed" source="Orion">Fed</keyword> will now have to act even more aggressively to slow that price surge.</li></ul>Friday's release showing inflation <a href="https://www.businessinsider.com/inflation-report-cpi-may-gas-prices-federal-reserve-rate-hikes-2022-6">at a 41-year record in May</a> dashed all hopes that rising prices had peaked in March.It means the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> is under more pressure than ever to rein in inflation by hiking <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates" source="Orion">interest rates</keyword>, a practice that reverberates through almost every aspect of the average American's finances. The central bank has long been expected to raise rates at each of its next two meetings, with one coming up next week. Now it's facing calls to get even more aggressive.The form that aggression could take is still up for debate, but one thing is clear: Inflation is getting worse at a time when it's already supposed to have peaked, and the Fed will have to be even more stringent if it's to solve the problem.A tougher stance, however, is bad news for many of the elements that precede a <keyword id="12460783" type="UNKNOWN" weightage="60" keywordseo="recession" source="Orion">recession</keyword>, ranging from stock prices to mortgage rates and credit cards to car payments.<h2>Investing is going to be a rollercoaster</h2>Markets don't like uncertainty. A murky future breeds volatility, and investors prefer clear outlooks.It's no wonder, then, that the Friday inflation report sparked a wave of selling on Wall Street. The higher-than-expected print confirmed many investors' biggest fear: that the Fed will have to slow the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> even faster if its to get a handle on inflation.That process will begin in earnest on June 15, when the central bank reveals its latest policy move. Yet uncertainty around the path of inflation, future Fed actions, and whether policymakers will slow the economy too much will weigh on markets for months. Brokerage accounts and 401k balances are already well off their 2021 highs. As the Fed ramps up its efforts, stock moves will likely get even frothier.Stocks also fare better when interest rates are low, as alternatives like Treasury bonds don't offer the same appeal in a low-rate environment. As the Fed takes action, many of the names that thrived when rates sat near zero will encounter new scrutiny.Riskier assets could face an even larger plunge. Cryptocurrencies broadly declined on Friday as well, pulling valuations even further from their 2021 peaks. As investors prioritize safe-haven assets and brace for slower economic growth, they're likely to pull cash from crypto and other uncertain markets.<h2>Mortgages, car loans, and credit card debt will get much more expensive</h2>The Fed's benchmark rate affects borrowing costs throughout the economy. With inflation jumping to new highs, interest rates on all kinds of products are poised to soar.For one, potential homebuyers hoping for a break will be out of luck. The housing market was practically inaccessible through much of the pandemic, as bidding wars and a nationwide inventory shortage <a href="https://www.businessinsider.com/housing-market-bubble-pop-outlook-home-prices-spike-sales-slow-2022-4">boosted prices at a historic pace</a>.The Fed is set to cool that rally with its rate increases, but that doesn't mean homes will be affordable. The average rate on a 30-year fixed-rate mortgage is up more than 2 percentage points from the end of 2021. For potential buyers, that means financing a purchase will be much more expensive.Car loans will show a similar trend. Since most vehicles are bought with financing plans, rate hikes will directly translate to pricier rates for auto purchases.Even credit card debt <a href="https://www.businessinsider.com/credit-card-debt-accounts-climbing-interest-rates-making-accounts-expensive-2022-5">will be harder to pay down</a>. The average card rate sits at about 16.4%, and could rise to a new record high above 18%, according to Ted Rossman, senior industry analyst at Bankrate. Paying off a balance could then take longer and cost more in interest, especially for those only making minimum payments on their credit cards.<h2>A recession grows more likely</h2>Higher consumer costs are one thing, but the bigger fear in economic circles is that the Fed is stuck. Doing too little to counter inflation could allow price growth to accelerate further. Today's inflation could even become permanent if long-term inflation expectations swing higher.Conversely, acting too aggressively could slow economic growth to a standstill. Demand could evaporate, leaving companies with diminished revenue. That would spark layoffs and quickly undo much of the pandemic-era recovery.Fed Chair Jerome Powell has signaled the Fed will prioritize cooling inflation over the labor market's recovery. It is "essential" to bring inflation lower, and the Fed "can't allow inflation expectations to become un-anchored," Powell said in a May 4 press conference.Whether the Fed can achieve a so-called "soft landing," in which inflation slows and unemployment remains low, <a href="https://www.businessinsider.com/recession-outlook-debate-inflation-economic-downturn-forecast-federal-reserve-recovery-2022-6">has been the subject of intense debate</a> for months. The May inflation reading, however, shrinks the target the Fed is trying to hit. The central bank must now hit the brakes on demand with even more force, and doing so comes with a fair amount of recession risk."The Fed's price stability resolve is going to be really tested now," Seema Shah, chief strategist at Principal Global Investors, said. "Policy rate hikes will need to relentlessly aggressive until inflation finally starts to fade, even if the economy is struggling."

The fight against eye-popping inflation could hurt everything from retirements to mortgage rates — and possibly trigger the next recession

<ul class="summary-list"><li>The 2022 Maverick is <keyword id="6355174" type="UNKNOWN" weightage="60" keywordseo="ford" source="Orion">Ford</keyword>'s brand-new compact pickup. It's the cheapest new truck you can buy.</li><li>The bare-bones Maverick XL hybrid lacks creature comforts like cruise control and power mirrors.</li></ul>Editor's note: This review was originally published in January 2022. The first time I hopped into the new <a href="https://www.businessinsider.com/ford-maverick-pickup-analyst-reaction-competition-sedans-crossovers-2021-6">Ford Maverick pickup</a>, I did what any driver would do in an unfamiliar vehicle. I strapped in, adjusted my seat, and fiddled with the rearview mirror. Then, I went to tweak the side mirrors. But I didn't find the usual buttons or joystick on the driver's side door. "Strange," I thought. "There's got to be a knob here somewhere." I searched and searched for some way to adjust the mirrors. The knob, I'd soon learn, was me. <div type="image" title="2022 Ford Maverick XL pickup truck." height="1573" width="2500" msid="88842090" hostid="261"></div>I stared blankly at the area by the window switches, certain that the answer was right under my nose. I wondered whether I was being oblivious or just plain stupid. As it turns out, it was the latter. I rolled down my window, reached out, and gave the driver's side mirror glass a poke. Sure enough, the Maverick comes with manual mirrors — the kind you have to tilt with your hand to find the right position.This came as a surprise to me, a person who normally test-drives <a href="https://www.businessinsider.com/volkswagen-vw-id4-awd-affordable-electric-crossover-suv-review-2021-12">new cars</a> in the $30,000-plus category. But once I remembered the Maverick's whole reason for being — to offer buyers a brand-new truck at a bare-bones price — it all made perfect sense. <div type="image" title="2022 Ford Maverick XL pickup truck." height="1875" width="2500" msid="88842092" hostid="261"></div>The 2022 Maverick is Ford's newest pickup. It aims to provide a more compact and budget-friendly alternative to today's trucks, which have ballooned in both size and price over the years. The base Maverick XL, which Ford loaned me for a weekend in December, costs $20,000 before fees, which makes it the cheapest model in Ford's lineup. It's 200 inches long, roughly the size of a big SUV like the Honda Pilot, but about 1 foot shorter than a midsize pickup like the <a href="https://www.businessinsider.com/ford-maverick-vs-ranger-pickup-trucks-comparison-price-towing-bed-2021-6">Ford Ranger</a>. The Maverick is available in three trim levels, all of which come with a hybrid powertrain and front-wheel drive. Note these prices are from January 2022. The cheapest 2023 model now starts at $22,595<ul><li><keyword id="12932995" type="UNKNOWN" weightage="60" keywordseo="ford-maverick" source="Orion">Ford Maverick</keyword> XL ($19,995 MSRP): comes with manual seats, steel wheels, and an 8-inch touch screen. </li><li>Ford Maverick XLT ($22,360): adds cruise control, a nicer interior, power mirrors, an in-bed storage cubby, and other features. </li><li>Ford Maverick Lariat ($25,860): adds power driver's seat, dual-zone climate control, push-button start, ambient lighting, and other features.</li></ul><div type="image" title="2022 Ford Maverick XL pickup truck." height="1875" width="2500" msid="88842094" hostid="261"></div>It's a great option for people who want pickup capability, can't spend too much, and live in an area where parking isn't exactly kind to a 20-foot-long Ford F-150. As someone who lives in New York and sometimes needs to carry bulky things like bikes and camping gear, the Maverick is right up my alley and I was eager to try it out for my own selfish reasons. But to own the cheapest version, you need to compromise on more than just mirrors.During my time with the Maverick XL, I debated whether the stripped-down truck would be worth the sacrifices I'd have to make.<div type="image" title="2022 Ford Maverick XL pickup truck." height="1875" width="2500" msid="88842096" hostid="261"></div>As I drove the Maverick around, the surprises kept coming: The XL trim lacks cruise control. It doesn't have blind-spot monitoring to help with lane changes. Its bed is made of bare sheet metal without any plastic lining. There's no push-button start. The 191-horsepower truck is sluggish getting up to highway speed, and there's plenty of wind and engine noise once you get there. Its seats aren't particularly comfy on long drives, and its interior isn't fancy by any stretch.<div type="image" title="2022 Ford Maverick XL pickup truck." height="1784" width="2500" msid="88842098" hostid="261"></div>But in a lot of ways, the Maverick XL manages to make "cheap" appealing — especially when you remember that it costs only $20,000, less than half the price of <a href="https://www.businessinsider.com/used-new-car-prices-surging-chip-shortage-2021-10">the average new car</a>.The truck's interior is more pleasant to be in than you might expect from a brand's bottom model. Instead of the usual hard black plastic everywhere, the Maverick uses fun patterns, textures, and molded pieces that make things interesting. The door pulls are these cool floating rectangles, instead of something plucked from the Ford parts bin. There are plenty of useful storage nooks, including bins under the rear seats. The infotainment system is basic but comes standard with Apple CarPlay and Android Auto.<div type="image" title="2022 Ford Maverick XL pickup truck." height="1875" width="2500" msid="88842100" hostid="261"></div>Outside, the Maverick looks cute and muscular all at the same time — like a miniature F-150 or Tom Holland. And I was a big fan of the XL's steel wheels, even if they're a sign of a cheap truck. The Maverick's <a href="https://www.businessinsider.com/ford-maverick-xl-truck-bed-size-review-hybrid-2022-1">4.5-foot bed</a> is basic but functional, complete with a series of notches meant to accommodate do-it-yourself improvements like bike racks and dividers. What's more, the smallish pickup offered good visibility and was easy to maneuver around city streets. Its standard hybrid engine, though underpowered, delivers a stellar 33 miles per gallon on the highway and 42 mpg around town, according to the Environmental Protection Agency. <div type="image" title="2022 Ford Maverick XL pickup truck." height="3025" width="2500" msid="88842102" hostid="261"></div>In its cheapest form, the Maverick exists to drive places, carry people and things, and not much else. It isn't particularly quick, can't tow all that much, and leaves out a laundry list of features that many would consider essential. But that may be perfect for some buyers. Whether the bargain-bin price justifies the sacrifices is between you and your wallet. To me, it feels worth it to spring for a pricier trim and some options. Since the Maverick has such a low base price, you can pile on extras and still get a truck that's cheaper than most. Adding on all-wheel drive and the more powerful engine, for example, costs about $3,300. <div type="image" title="2022 Ford Maverick XL pickup truck." height="1875" width="2500" msid="88842104" hostid="261"></div><keyword id="12670252" type="UNKNOWN" weightage="60" keywordseo="pickup-trucks" source="Orion">Pickup trucks</keyword> have gotten bulkier, fancier, and more expensive over the years, and buyers can't get enough: The F-150 and Chevy Silverado are two of the most popular vehicles on the market, and either truck costs nearly $80,000 fully loaded.But new entrants like the Maverick and <a href="https://www.businessinsider.com/hyundai-santa-cruz-pickup-truck-2022-review-price-ford-maverick-2021-12">Hyundai Santa Cruz</a> — smaller, cheaper, and more maneuverable than their rivals — show that, sometimes, less really is more. For many buyers, Ford's little pickup may be all the truck they need.

I drove the $20,000 Ford Maverick and found the bare-bones truck proves that less can be more

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Bryan Logan/Business InsiderVolvo XC40.</div></div></div><ul><li>The Volvo XC40 is the newest and smallest addition to the Swedish automaker's SUV lineup.</li><li>It arrives at the perfect time for Volvo, as the luxury compact SUV segment evolves in the US.</li><li>The XC40 is a tasteful, high-quality and exceptionally well-packaged small SUV for a starting price of around $33,000. It's also available via subscription through the Care by Volvo program, which lumps the car payment, insurance, and scheduled maintenance into one monthly fee.</li></ul>The Volvo XC40 is the newest addition to the Swedish automaker's SUV lineup and it joins a growing segment of compact sport-utility vehicles and crossovers currently dominating the market.Now eight years into its relaunch as a luxury brand under the Chinese automotive conglomerate, Geely Holding Group, Volvo has launched seven new models, three of which are SUVs: the XC90, XC60, and now the XC40.The 40 is built on Volvo's proprietary small-car skeleton, denoted as the Compact Modular Architecture (CMA) platform which was co-developed with Geely.As automobiles go, being the smallest and least expensive model in a lineup usually means you'll have to make some compromises - the evidence of which might manifest itself in lower-quality materials and fewer options than the pricier models.That is not the case here. The XC40 feels nearly every bit as premium as a compact luxury four-wheeler should.From the moment you pull open its hefty doors, plant yourself into the sculpted, leather and Alcantara-wrapped driver's seat, and grip the thick-rimmed steering wheel with the stoic chrome-plated Volvo badge planted dead-center, you realize you're about to pilot a very capable, exceptionally well-built machine.At the same time, it's also quaint. And comfortable.Unlike its larger siblings, the XC40 has no plug-in hybrid variant yet. It can only be had with one of two versions of the company's four-cylinder, turbocharged, gas-powered engines - available with 187-horsepower, or a more energetic 248-horsepower variant. An all-electric version is currently in development.Volvo recently loaned us a fully loaded XC40 R-Design for a weeklong drive in Los Angeles. These are our impressions:

The 2019 Volvo XC40 hits a sweet spot in the compact luxury SUV segment - and it's already bringing a new generation of customers to the Swedish automaker

Justin Sullivan/GettyAmericans love to buy cars. Incentives are surging. But transaction prices are also high. Carmakers don't want to lose sales as the US market share situation tightens.Automakers are reporting May US sales throughout Thursday. The pace is expected to run a bit lower than May 2016, when it was over 17 million; May 2017 should come in just below that figure.After record sales years in 2015 and 2016, when 17.5 and 17.55 million vehicles respectively rolled off dealer lots, there's been a lot of chatter in 2017 about sales plateauing as demand flatlines and used cars return to the market, moderating new car sales. However, against those trends, we currently have an economy at full employment and abundant credit, as well as low gas prices.So the market is actually pretty hard to call. It could actually beat 2016's record in 2017, if the summer selling season is robust and the carmakers finish the year strong.For now, automakers are playing a game of chicken with the inevitable downturn. Incentives have surged, prompting negative comparisons with past sales booms when car companies frittered away their profits in an effort to capture and maintain US market share."While demand for new vehicles is still relatively strong, it's a bit of smoke and mirrors," Jessica Caldwell, Executive Director of Industry Analysis at consumer auto site Edmunds.com, said in a statement."Dealers and OEMs really pushed the deals over the holiday weekend to prop up their May numbers. Incentives were up sharply, and it seems automakers are putting more cash on the hood to nudge car shoppers to buy versus lease. Finance incentives were up 33 percent year over year in May, compared to a 28 percent rise in lease incentives and an 18 percent lift in cash incentives."Business InsiderAgain all that cash, automakers have a countervailing trend: transaction prices. "Transaction prices continue to climb at a steady rate, driven by the weakening sales mix of cars which is estimated at 38 percent in May, down from 41 percent one year ago," Tim Fleming, an analyst for Kelley Blue Book, said in a statement.The average price being charged for a new car was $33,261, KBB reported. Ford owns the highest transaction price in the broader business - $38,428 in May, down slightly from April - driven by the F-150 pickup the country's bestselling vehicle. Volkswagen Group's transactions are higher, more than $40,000, but high-end Audis and Porsches distort that number.Automakers such as Ford who are selling pickups and SUVs can afford to incentivize sales, given that they're raking in so much money on their bread-and-butter vehicles, which Americans have been snapping up in droves.This probably can't last forever - the "bad" incentives being offset by the "good" transaction prices. Consumers have been willing to accept pricier vehicles because of extended loan terms (well beyond the traditional five years), appealing leasing terms, and the overall macroeconomic environment, especially the disappearance of pain at the pump.If the market does begin to see sales erosion, automakers with solid balance sheets and a good mix of vehicles - crossover SUVs in particular - will be in good shape to ride out the downturn. But the situation shaping up to be gnarly in a competitive sense across the board, as the market-share numbers are tightening in the US: General Motors, Ford, and Toyota - the top three - each controls less than 20%.Get the latest Ford stock price<a href="http://markets.businessinsider.com/stock/f-Quote"> here.</a> <h3>NOW WATCH: <a href="http://www.businessinsider.com/henry-blodget-ford-replacing-ceo-mark-fields-short-termism-on-wall-street-2017-5">Ford replacing its CEO points to the short-termism on Wall Street</a></h3> Please enable Javascript to watch this video

Carmakers are playing a dangerous game when it comes to auto sales

<div class="KonaFilter image-container display-table float_right click-to-enlarge"><div><div class="image on-image"><a title_source="Joe Raedle/Getty" title_caption="In today's world, you don't even have to take a trip to the car dealership to purchase a new vehicle - you can do it online from the comfort of your home." class="zoomin" href="https://static-ssl.businessinsider.com/image/55a80afe2acae7f4028b75b9-960/gettyimages-142379983.jpg"></a>Joe Raedle/GettyIn today's world, you don't even have to take a trip to the car dealership to purchase a new vehicle - you can do it online from the comfort of your home.</div></div></div>If you're looking to save money, big purchases can be a great opportunity to do so.Unfortunately, when it comes to big-ticket items like a new car, most of us make mistakes and end up overpaying. The experienced and crafty car salesman doesn't help our cause, either.We spoke to Scott Chesrown, who spent nearly a decade working in auto dealerships before transitioning to VP of Marketing at <a href="https://www.vroom.com/">Vroom</a>, a New York City-based car sales startup that brings the car buying, financing, and selling process online.Chesrown shared four common tricks that car dealers employ to get you to spend more:<h3>1. They start very low on the appraisal of your trade-in.</h3>The first step in buying a new car is trading in your old one. Car dealers love to price your old car much lower than it is actually worth and assume you will start negotiating from the price they suggest, Chesrown tells us.Don't get off to a lousy start by trading in your car for an unfair price. Do your research ahead of time, using resources such as <a href="http://www.kbb.com/">Kelly Blue Book</a> to determine exactly how much your car is worth. If you're armed with that information, you become the person controlling the conversation. "In today's world, buyers can hold the upper hand in the transaction," Chesrown says.<h3>2. They get you in the door by offering low prices and then sell you something different (and more expensive).</h3>Car dealers thrive on the classic bait-and-switch tactic. "Most tools online are geared towards getting you in the store because that's when car dealers have the most opportunity to sell the car," Chesrown explains. "The cars are right in front of you, it's usually a high-pressure situation, and these guys know how to sell cars. The stigma of the car dealer is still very much true in the industry."What they'll do is tell you a great deal is available to lure you into the store, knowing that they can switch you on to a different, pricier car. Or, they'll tell you the "great deal" was already sold, and proceed to selling you something more expensive.You have two options to overcome this trickery. You can call the dealership right before visiting and ask them to confirm that the vehicle is in stock. If they do, don't stop there - ask them to email or fax a signed statement indicating it's available for sale. Option two is to forego the dealership all together and <a href="http://www.businessinsider.com/guide-to-safely-buying-a-car-online-2013-4">buy online</a>, or opt for a service such as <a href="https://www.vroom.com/">Vroom</a>, which can help you find a deal online and then deliver the car straight to your doorstep.<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source="Flick via Google Images" title_caption="Car salesmen have been using the same tricks for years." class="zoomin" href="https://static-ssl.businessinsider.com/image/55a8189a371d22a40e8b6fad-960/6668676929_56bfbc9228_b.jpg"></a>Flick via Google ImagesCar salesmen have been using the same tricks for years.</div></div></div><h3>3. They try to sell you a bunch of protection services for your car that you don't actually need. </h3>"By the time most consumers get into the financing process, they're exhausted," Chesrown tells us. Dealers will use that to their advantage, and try to extract more money out of you when you're fatigued and desperate to leave with a new car."They'll start throwing on extended warranties and different types of protection you probably don't need on your car," explains Chesrown. "People end up buying a lot of things that ultimately don't protect them."To avoid this pitfall, make sure you know exactly what these additional items cover and then ask yourself if you truly need them. Most of the time, you'll find you don't need so much protection.A common trick to look out for is tire protection. Often, you'll find in the fine print that you're only covered if a nail was found in your tire - any other damage not involving a nail will not be accounted for. Also, dealers may try to sell you an extended warranty that just covers their electrical system. This doesn't necessarily make sense, Chesrown explains, as modern cars don't have a lot of electrical problems.This doesn't mean you should opt for the other extreme and forego all service contracts. "It is important to have a service contract," Chesrown tells us. "I'm a very big fan of extended warranties on cars - when they cover the right stuff."<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source=" Justin Sullivan/Getty" title_caption="Protection is good, but typically, you don't need all the protection car salesmen offer you." class="zoomin" href="https://static-ssl.businessinsider.com/image/55ae5e5c371d222e008b82d7-960/83916860.jpg"></a> Justin Sullivan/GettyProtection is good, but typically, you don't need all the protection car salesmen offer you.</div></div></div><h3>4. They mark up the interest rate on the car.</h3>When it comes to financing the car for you, dealers can make a lot of money by marking the interest rate up, and oftentimes, consumers are completely oblivious that they're getting ripped off."The perception of most consumers is that the interest rate came from the bank, which they trust" Chesrown tells us. "The interest rate did come from the bank, the car dealers just put more interest on top of it."Customers with excellent credit (780 or above) should expect an interest rate between 1.49% and 3.49%, and customers with average credit should expect between 4% and 6%, Chesrown says. The range accounts for factors such as income, debt, and the amount you want to borrow. While the best dealers will always try and get you a competitive rate, they will also typically start at a slightly higher range to hold back a percentage for profit. Chesrown's rule of thumb is that if a dealer is quoting you an interest rate for the first time, expect it to be 2% higher than what the bank is actually charging them."The best way to protect yourself is to learn what your credit is, and then talk to your bank directly about what you would qualify for and the interest," advises Chesrown. "That would then give you the ammo you need before walking into a dealership."One final tip from the expert: Don't jump the gun and tell the dealer how much you want to pay per month before you're approved. "That allows the car dealer to pack your payment full of all the products if they can beat your monthly payment, which they can usually do by extending out the length of the loan," Chesrown warns. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/song-made-using-coins-drummer-music-video-2015-7">This drummer created a whole song by only using the sound of coins</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="s1ZDM1djoe2BbhjqVRCIwkLubOlkcQgk" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

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