Thursday, December 6, 2012

Sticker Shock: New Car Prices Are Going Up

The news from Tesla was long expected. Less than six months after delivering the first Model S, the electric vehicles maker is raising the price of the Model S by $2,500.

The base Model S will sell for $59,900 ($52,400 after the federal tax rebate) for those ordered after January 1st. (Read More: Tesla Delivers the Model S, Will It Live Up to Expectations?)

Tesla has said for some time that it would be raising the price of its first sedan, but it's not the only automaker hiking prices.

"There's no doubt you're going to see sticker prices go up," says John Humphrey, Senior Vice President of J.D. Power. "With the content going into new cars and trucks, the costs will have to be passed along to buyers."
What kind of costs? 

The biggest change is with newer more fuel efficient engines. Automakers are required to move the average fuel economy for their fleet of vehicles to 34.1 MPG by 2016 and 54.5 MPG by 2025 (currently at 29.7 MPG). Getting there will mean major upgrades in the engines and components of vehicles.

READ MORE:  http://www.cnbc.com/id/50014208

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