The average monthly payment for a new car now exceeds $700

A new car comes with all kinds of improvements and cool features, but costs are on a steep rise.Americans are now paying more than $700 dollars a month, on average, for a new car. That's according to the financial website, Bank Rate.University of Iowa Business professor, Jennifer Blackhurst, says there are two main factors fueling the rise in car prices."It started with COVID when we were having issues with making the cars and later on, and we're still experiencing it, a shortage in microchips," said Blackhurst. She says the microchip issue won't be resolved until 2024 or 2025.Add that with climbing interest rates and you get high monthly payments.Financial Website Bankrate says the average new car payment is $716 dollars a month."It could be a budget buster," says financial advisor, Guy Leman. Leman says there are a few ways to ease the pain when it comes to shopping for a new car. "We don't like people to spend more than 8% of their take-home pay on car payments," said Leman. He says car payments normally last around 6 years, so don't buy something that's going to make you tight on cash in the long term.Also, think about the costs surrounding a new car.Insurance, registration and maintenance are all more expensive with new cars, so consider buying a used car."If you buy a 3-year-old car, you're essentially buying that car with a 40% off coupon. If you buy a 6-year-old car, you're essentially buying that car with a 60% off coupon," says Leman. Leman also says you make your money on a car, with how long you drive it after it's paid off. So do your research, stay within your budget and buy a reliable vehicle. If you still want a new car, Blackhurst says there will be a decline in prices when more cars become available.