Price of New Vehicles

[Bob Dylan]

Watched a Story on the Evening News that said the Median Price for New Vehicles in the US is now $48,000 with the Average Payment over $1,000 a Month!.

And the Prices of Used Vehicles are at an all time High also!

 

[MARC Rider]

Unfortunately, we're now in the position of having to buy a new car. While I was available to get financing at a very good rate, the salesman at CarMax told us that some of his customers are stuck with rates of 25% or more!

At some point in the not to distant future, a large percentage of the American public is not going to be able to afford a car, new or used. I'm pessimistic and think the result will be a wave of political unrest rather than a golden age for public transportation.

 

[jiml]

The shortage of new cars has driven up the price of used resales and those cheap manufacturer finance offers seem to be a thing of the past. In past inflationary cycles excess car inventory is what prompted those low rates. Today we have the "perfect storm" of inflation, high interest rates and no inventory.

 

[Asher]

The shortage of new cars has driven up the price of used resales and those cheap manufacturer finance offers seem to be a thing of the past. In past inflationary cycles excess car inventory is what prompted those low rates. Today we have the "perfect storm" of inflation, high interest rates and no inventory.

Plus the cost of fuel is enough to make a grown man cry.

 

[BCL]

The primary reason for low inventory is the lack of automotive semiconductors. There's actually a pinch with all semiconductors given strong demand and staffing shortages at the fabs needed to make the parts. And there's really no going back to less electronics.

 

[MARC Rider]

Plus the cost of fuel is enough to make a grown man cry.

Except that in our area, the price of gas has dropped over 50 cents per gallon over the past 2 weeks.

 

[jis]

Except that in our area, the price of gas has dropped over 50 cents per gallon over the past 2 weeks.

We are well below $4 now somewhere between mid $3.80s and mid $3.90s

One thing driving up median price of new cars is that whatever chips are available are being used in manufacturing higher margin more expensive cars at the expense of cheaper models, and it is those that are coming on the market.

 

[Asher]

Except that in our area, the price of gas has dropped over 50 cents per gallon over the past 2 weeks.

Yeah I’m lovin that decrease in price, we’re down to $6.50 or so for diesel and close to $6 for gas.

 

[Metra Electric Rider]

I've noticed the price of gas coming down as well. Not a lot but down.

Another issue is that there is a huge increase in repossessions of cars at the moment - a lot of people apparently bought too much car for the their financial situation. Doesn't bode well for anybody other than used car shoppers...

(can't readily find a good, non-paywalled article)

 

[Bob Dylan]

Unfortunately, we're now in the position of having to buy a new car. While I was available to get financing at a very good rate, the salesman at CarMax told us that some of his customers are stuck with rates of 25% or more!

At some point in the not to distant future, a large percentage of the American public is not going to be able to afford a car, new or used. I'm pessimistic and think the result will be a wave of political unrest rather than a golden age for public transportation.

Look into getting a Hybrid Joe.

I know full Electrics are " The Hot Thing" but most of the Asian Owned Manufacturers make really good Vehicles that are semi-reasonable .

Totota and Hyundai ( Best Warranty by Far)are the Highest Rated, and everyone I know who has one or more Loves them.

 

[Exvalley]

As others have mentioned, the shortage of cars is the perfect storm of supply chain issues. As a result, discounting has all but stopped. This will not last forever, but it will last at least several more months. Even when production returns to normal, it will take a year or more to get back to previous inventory levels.

If you need a car right now, your best bet is to find a dealership that is not charging over MSRP. Those dealers are out there. You may get lucky and qualify for a small incentive, but forget negotiating beyond that.

Some cars are very backordered. The Volkswagen ID.4, for example, is backordered a year or more. If you want one of those popular cars, get your name on a list ASAP.

Keep in mind that volume is way down. Dealerships are not discounting, but they are also selling fewer vehicles. It's also why Tesla has raised prices so much in the past year.

 

[BCL]

As others have mentioned, the shortage of cars is the perfect storm of supply chain issues. As a result, discounting has all but stopped. This will not last forever, but it will last at least several more months. Even when production returns to normal, it will take a year or more to get back to previous inventory levels.

If you need a car right now, your best bet is to find a dealership that is not charging over MSRP. Those dealers are out there. You may get lucky and qualify for a small incentive, but forget negotiating beyond that.

Some cars are very backordered. The Volkswagen ID.4, for example, is backordered a year or more. If you want one of those popular cars, get your name on a list ASAP.

Keep in mind that volume is way down. Dealerships are not discounting, but they are also selling fewer vehicles. It's also why Tesla has raised prices so much in the past year.

Traditionally dealers would often put an additional markup on the window but rarely charge anything unless it was some specific vehicle with limited stock. Think early Miata or cars that were made in limited quantities. I think for my first car there was a label that said the dealer wanted $2000 over MSRP. I negotiated and got it for about $2000 less than MSRP, and that was with dealer financing, which the finance manager said he hated because "dealer participation" (in the fine print) meant he made no commission unlike what he's get with bank financing.

It's a weird market now.

 

[BCL]

We are well below $4 now somewhere between mid $3.80s and mid $3.90s

One thing driving up median price of new cars is that whatever chips are available are being used in manufacturing higher margin more expensive cars at the expense of cheaper models, and it is those that are coming on the market.

I'm not sure it necessarily works that way - or at least not at the point where parts can only reserved for the most expensive models. A lot of these ICs are not going to be interchangeable. It's really a lot like the way other electronics are made. I work in semiconductors, and if the specific parts a company needs are unavailable, they're basically screwed because there's no second source like is possible for auto parts like oil filters or relays. They might have unique pinouts and have been qualified for specific chips. I think of it like iPhones, where Apple can't go to Qualcomm asking for processors. They've already baked in their own parts.

Automakers will choose their electronic parts early in the design phase and there really won't be a lot of flexibility if that specific part has supply chain difficulties. I could imagine the same part is used in different vehicles at various price points, since a lot of these do pretty basic things that are needed for all cars.

 

[west point]

There has been talk that Russia is taking chips in domestic and hosehold equipment for use whenever possible into military hardware. Find that as somewhat suspect.

Drove by local Nissan dealer yesterday.. Number of autos compared to 2 months ago appeared as a WAG about 45% of 2 months ago However, we have had solid consists of auto carriers going and comming from the KIA factory in West Point, Ga. KIA dealer near the Nissan dealer seemed to have about same numer of cars.

 

[jis]

I'm not sure it necessarily works that way - or at least not at the point where parts can only reserved for the most expensive models. A lot of these ICs are not going to be interchangeable. It's really a lot like the way other electronics are made. I work in semiconductors, and if the specific parts a company needs are unavailable, they're basically screwed because there's no second source like is possible for auto parts like oil filters or relays. They might have unique pinouts and have been qualified for specific chips. I think of it like iPhones, where Apple can't go to Qualcomm asking for processors. They've already baked in their own parts.

Automakers will choose their electronic parts early in the design phase and there really won't be a lot of flexibility if that specific part has supply chain difficulties. I could imagine the same part is used in different vehicles at various price points, since a lot of these do pretty basic things that are needed for all cars.

I know very little about the details of how these things work. I was merely para phrasing a reputed Auto Industry Analyst's view as he presented on Bloomberg Business.

I am sure you know more than me.

 

[BCL]

I know very little about the details of how these things work. I was merely para phrasing a reputed Auto Industry Analyst's view as he presented on Bloomberg Business.

I am sure you know more than me.

Well - it's like a lot of things where parts are selected well in advance, and there's a smorgasbord of different parts that could work, but become part of the design. But once they're chosen, boards are designed, certifications are given, etc. - then there's little that can be done that deviates from it. The manufacturer is now subject to parts shortages and manufacturer allocations.

Think of it like when NASA seemed to be desperate to get spare parts. They have to be specific parts and there was no substitute. I heard they had employees searching for those parts on eBay.

 

[Dakota 400]

There has been talk that Russia is taking chips in domestic and hosehold equipment for use whenever possible into military hardware. Find that as somewhat suspect.

Drove by local Nissan dealer yesterday.. Number of autos compared to 2 months ago appeared as a WAG about 45% of 2 months ago However, we have had solid consists of auto carriers going and comming from the KIA factory in West Point, Ga. KIA dealer near the Nissan dealer seemed to have about same numer of cars.

Today was time for an oil change for my Buick. The dealer did have more cars on the front lot than were there several months ago when I drove by. Most of the cars were GMC vehicles with just a few Buicks.

 

[Just-Thinking-51]

Cross country I am seem more cars on dealer lots, and less sitting in fields. However it does seem the higher end one are available, not the cheapest. I am not sure how this will work out. Some plants have taken vacation and stop production, but it seem a lot of cars are sitting around still waiting for that chip. What happens when they hit the market. Are we going to have a bust, and see price drop?

I get the dealers not given a discount, but when the fields get cleared of cars and truck then what will happen. Is there a market for all these cars?

 

[Just-Thinking-51]

About the fuel price drop, pretty sure it was price speculation, but US is still try to send more products (crud and finish) to Europe, not sure what this winter will look like.

 

[MARC Rider]

Watched a Story on the Evening News that said the Median Price for New Vehicles in the US is now $48,000 with the Average Payment over $1,000 a Month!.

And the Prices of Used Vehicles are at an all time High also!

This seems to be sensationalizing. First, how do they calculate "median price?" Is it a case of counting every car model on sale and taking the median value, or is the "true" median somehow sales-weighted? It's possible that the auto manufacturers are marketing a disproportionate amount of high-end and "loaded" cars, but if one, looks, there are still a lot of new cars around for considerably less than $48,000. Also, monthly payments depend on mode than the interest rate, as the length of the load term has a very strong effect.

I myself just gulped and subjected myself to purchasing a new car. The car was a small SUV (Toyota Corolla Cross), mid trim, for $33K. This price included the evil dealer "market adjustment." I'm not happy, but our 21 year old Honda has a lot of rust on the undercarriage and the A/C is definitely flaky, so I'd rather replace the car now while I can still at least drive the old car to the junkyard. I was able to borrow $20K for 60 months (5 years) at a monthly payment of $360. Maybe people with really bad credit who are stuck with 25% APRs deal with monthly payments approaching $1,000.

This <$48,000 car is not some bare-bones base model, either. In my research, I saw compact cars with MRSPs of less than $20,000, some even less than $15,000. There are plenty of cars and SUVs being offered that are way less than $48,000. Of course, in today's market, they're not on the lot, and you're going to have to order them, pay a couple of thousand over the MRSP, and wait a while before they're delivered. We had to wait about almost 2 weeks for ours, and the salesman said it "was on the train." It arrived about a week later than his estimate. Maybe it was riding Amtrak or Amtrak is consulting with the class I freight railroads on the subject of on-time arrivals.

 

[Bob Dylan]

This seems to be sensationalizing. First, how do they calculate "median price?" Is it a case of counting every car model on sale and taking the median value, or is the "true" median somehow sales-weighted? It's possible that the auto manufacturers are marketing a disproportionate amount of high-end and "loaded" cars, but if one, looks, there are still a lot of new cars around for considerably less than $48,000. Also, monthly payments depend on mode than the interest rate, as the length of the load term has a very strong effect.

I myself just gulped and subjected myself to purchasing a new car. The car was a small SUV (Toyota Corolla Cross), mid trim, for $33K. This price included the evil dealer "market adjustment." I'm not happy, but our 21 year old Honda has a lot of rust on the undercarriage and the A/C is definitely flaky, so I'd rather replace the car now while I can still at least drive the old car to the junkyard. I was able to borrow $20K for 60 months (5 years) at a monthly payment of $360. Maybe people with really bad credit who are stuck with 25% APRs deal with monthly payments approaching $1,000.

This <$48,000 car is not some bare-bones base model, either. In my research, I saw compact cars with MRSPs of less than $20,000, some even less than $15,000. There are plenty of cars and SUVs being offered that are way less than $48,000. Of course, in today's market, they're not on the lot, and you're going to have to order them, pay a couple of thousand over the MRSP, and wait a while before they're delivered. We had to wait about almost 2 weeks for ours, and the salesman said it "was on the train." It arrived about a week later than his estimate. Maybe it was riding Amtrak or Amtrak is consulting with the class I freight railroads on the subject of on-time arrivals.

Congrats,Nice car! I should have figured you would make a Smart Choice!

And you're correct about the Prices, depending on What, Where,and Who is buying!

Austin is the Capital of the Electric Car Mania, but also the Big Gas Hog Trucks still sell like Hot Cakes, some of these Amazon's are so Big you could live in them!( and they're Crazy Expensive!)

I get emails and junk calls daily wanting to "Buy your Car"( and my House too, and I live in an Apartment!)

Car Dealers and Car Salespersons have always had Reputations for being Slick, and I'm sure lots of folks get taken advantage of by them, even those of us who do their research and know how the system works,since we are pretty much stuck with Buying/Leasing from Dealers or from Private Individuals.( Used)

Enjoy the New Car, I'm happy I bought Mine in 2018, and that it's Paid For, with the Good 10 Year Hyundai Warranty!

 

[railiner]

The primary reason for low inventory is the lack of automotive semiconductors. There's actually a pinch with all semiconductors given strong demand and staffing shortages at the fabs needed to make the parts. And there's really no going back to less electronics.

Perhaps someone should come out with a modern day "peoples car", that does not rely on electronics...bet it would sell...
And as an added bonus, it might not be vulnerable to some Electromagnetic Pulse attack....

 

[Just-Thinking-51]

Perhaps someone should come out with a modern day "peoples car", that does not rely on electronics...bet it would sell...
And as an added bonus, it might not be vulnerable to some Electromagnetic Pulse attack....

Not sure if a old fashion carburetor would be able to meet modern emissions standards. But EMP blast prove car would sell to a few.

 

[BCL]

Perhaps someone should come out with a modern day "peoples car", that does not rely on electronics...bet it would sell...
And as an added bonus, it might not be vulnerable to some Electromagnetic Pulse attack....

Can't possibly sell such a car in the United States or Canada. Any new car sold has to have on-board diagnostics. California's Smog Check now pretty much only is a plug in to read the diagnostics rather than doing an actual tailpipe emissions check.

The whole EMP thing is overblown. A generator produces electricity because a moving magnetic coil generates current. An EMP does that with a magnetic wave moving instead. If you saw the movie GoldenEye, it was fairly accurate in that not only did the electronics fry, but even incandescent light bulbs blew up. But that would have to be pretty powerful. I remember another movie (Broken Arrow) that has someone turn off everything when a nuclear weapon created an EMP that took down a helicopter. That might not be a matter of overcurrent destroying electronics, but what we call "soft errors" where electronic 0s and 1s get flipped. But I think anything electrical could be damaged by EMP.

 

[BCL]

Not sure if a old fashion carburetor would be able to meet modern emissions standards. But EMP blast prove car would sell to a few.

That's what I was thinking. All new cars sold have to have OBD-II compatible systems. Part of it would be for emissions equipment, but it can also report things like failing engines or transmissions.