It would appear that the days of lower new car prices are over. Though the global economic situation has not drastically changed with certain European countries still coming to terms with their problems, some positive indicators in markets like the US, Japan, India and to a lesser extent China have enabled car manufacturers to ramp up production to meet demand.

Consequently, the issues faced by them during the slack demand period which led to increase in inventory of cars are now beginning to disappear. During the recession, there were many who could not afford the car loans to buy new or even used vehicles and that meant new car prices had hit all time lows.

If you were one of the lucky ones to seize bargain offers made then, you can congratulate yourself for your wise decision. Not only would you have got the car you wanted at a great price, you would have also benefitted from the different incentives car manufacturers had provided then. Now the cost of new cars are up on an average of 7-10% and when you add the different taxes and levies, you are easily paying close to 12-13% more.

Other factors like increased gas prices have also led to the demand for small cars going up substantially. This is turn has made these cars too more expensive than before. The fact that car manufacturers are now providing many additional luxury features and accessories within small cars are also leading to the small new car prices going up.

Today the situation on the new car loans too has improved. The interest costs are lower than what you would have to shell out for used cars and that is also leading many to go for new cars. People want to keep their new cars for a minimum period of five years and that would also explain why they don’t mind spending on accessories and other pricey options for their cars.

The demand for new cars and the plethora of options are inducing even those already having cars to go for the latest models. However, they are not able to get a good price for their old car and many are using the charity mode to at least get some tax related benefits to dispose off their old cars.

Indeed, new car prices have gone up and by the look of things, it does not look like they would come down soon. If you are on the fence, deciding to whether go in for a new car purchase, then act quickly and book your new car before the costs go up even further. The economic situation is improving and this will only push up demand for all these consumer lifestyle products.