Dealers and Buyers Are Both Worried Cars Are Too Expensive

[Zorro]

Rising interest rates and weaker used-car values are keeping people on the sidelines

A sharp rise in new-car prices since the pandemic has left many buyers fretting about vehicle affordability. Now, some dealers are fretting along with them.

Some dealers say that elevated prices and a lack of affordable models already were keeping some prospective buyers away. Now, higher interest rates and falling used-car prices are making it even more difficult for customers to make the math work on a monthly payment.

In some cases, buyers are canceling orders they placed before interest rates edged higher, dealers say. Some auto retailers are trying to liquidate their used-car inventories before values fall further.

The root cause of the lack of affordable options is the supply-chain disruption that has created new-vehicle scarcity in recent years, resulting in a seller’s market. Meanwhile, auto makers have cut output of vehicles at the lower end of the price scale, choosing instead to emphasize their most-profitable models.

https://www.wsj.com/articles/dealers-and-buyers-are-both-worried-cars-are-too-expensive-11675476870?st=irhl9fd6po1wmxc&reflink=desktopwebshare_permalink

[RKP5637]

1. Prices of cars and houses (and many things) are ridiculous relative to earning power. n/t

[Zorro]

6. From the article -- average new car price is over $47k

Yikes!

[RKP5637]

7. It's incredible. I've also read you can get into the $80k plus range for some. And that's not

a super luxury car.

[ProfessorGAC]

14. Seems High

As a ragtop driver, I keep an eye on new convertible prices, so I have some idea of probable future prices, used.
The Audi A-5, which is luxury but not super-luxury is $51k.
The BMW 4 series is almost $75k, though.
The new Mercedes C Class was $59k in 2023.
And, convertibles are always a couple grand higher than sedans.
So, there are high end makers with cars way under $80k.

[GregariousGroundhog]

17. Inflation adjusted, the last time cars cost over $47k in todays money was in 1993

https://blog.cheapism.com/average-car-price-by-year/#slide=62

The average price of a car in 1993 was $24,829, which adjust to $50,286 in todays purchasing power of money.

[MagickMuffin]

2. Well Automakers proceed, stop making more affordable vehicles

And people who can’t afford them won’t be buying them!

Take that to the bank. Poorer people can’t afford luxury cars. So, what will happen is the Automakers will have to lower/slash the prices on the luxury cars to get rid of them.

[ChazInAz]

3. I've never bought a new car.

Chiefly because I could never afford one!
Although when I inherited rather a lot of money, I did purchase a used 2004 Mercedes in 2010. I still drive it, lovingly maintained.

[RKP5637]

9. That is a very smart thing to do IMO. n/t

[patphil]

12. My 2007 Honda Accord was the last new car I bought.

I still have it; runs well.
Only abut 250,000 miles on it. It's just a matter of upkeep and a garage.

[dembotoz]

4. had some rather major repairs this year In previous years i mght have shopped for a replacement

but alas.....

now my car is fixed and the dealers will have to wait a couple years.

the article does not mention deal greed......folks paying way over sticker leaves me with little sympathy for dealers or car makers

[hlthe2b]

5. Given younger people are increasingly opting NOT to buy cars or even drive in some locales...

The greed is only going to come back to bite dealers and manufacturers. Once upon a time, I'd buy a different (very rarely NEW) car every 5 years or so. Boy, are those days gone.

I have some colleagues who have retired, opting to purchase new expensive SUVS prior to giving it up--thinking they would be their "final" vehicles. Now they are stuck with these big-assed gas guzzlers with gas prices still fluctuating and probably still paying them off while they complain about every penny increase in food prices. Well, okay. I think a lot of people are going to be learning some difficult lessons.

[Sky Jewels]

21. I hope that we'll enter a new era where car transportation is de-emphasized.

I mean, in a way, the United States is totally screwed, because so much of our development was during the "Cars Are King" 20th century, and our infrastructure grew up around cheap cars and cheap gas. But hopefully if the car market crumbles because of young people not buying into it, the feds and the states and the municipalities will be forced to beef up public transportation and also make more "walkable" developments. ... A gal can dream ... sigh.

[Vinca]

8. I'd like to get a new car, but I can't justify the expense. My husband would like a new truck even

more, but he can't find one that isn't the size of the Queen Mary. I swear if some company came up with vehicles dubbed "basic" that were small, energy efficient and bare bones (I don't need GPS to find the grocery store) they'd sell like hotcakes.

[RKP5637]

10. Yep, exactly, I really agree with your statement below ... I've wondered that for a long time.

"I swear if some company came up with vehicles dubbed "basic" that were small, energy efficient and bare bones (I don't need GPS to find the grocery store) they'd sell like hotcakes."

[modrepub]

11. Dealer Profit On Compact Cars/Trucks

is much lower than a SUV or full sized truck. The Salespeople and Dealers don't want to sell something which they'd be lucky if the mark up is a few hundred dollars. A full sized truck or SUV with all the bells and whistles would probably yield many thousands of dollars or more for the salesperson and the dealer.

Yea you could make up selling the former in volume but most folks would like one sale that nets them say $4k dollars in commission versus a couple hundred. The mark ups for used cars are probably similar; more expensive yields higher profit for the seller.

[mn9driver]

13. Ford is now making the Maverick

It’s a small truck. The base model is around $23k and it is a front wheel drive hybrid. I haven’t had a chance to look over or drive one yet.

At that price I don’t expect it will have a lot of hauling capacity. It might not even have a radio.

[EX500rider]

16. The Maverick:

The available 2.0-liter EcoBoost engine with available all-wheel drive makes Ford Maverick a more than capable machine. With available 4,000 lbs. of maximum towing capacity4 available and its standard 1,500-lb. payload capacity.


I kinda like the looks of the Hyundai Santa Cruz better:
2023 Hyundai Santa Cruz/Towing capacity
3,500 to 5,000 lbs

[Vinca]

19. I've actually thought of checking those 2 out. Complicating things is we need

4WD because we live on a back, dirt road and mud season can be a challenge in our neck of the woods. I like the looks of that Hyundai size wise.

[jalan48]

15. We woke up after the pandemic to a new economic reality.

[NowISeetheLight]

18. Considered

Buying a new car this year. Was looking at a 2022 Lincoln Corsair. $43k for the base model with options I wanted. Then the add in dealer markups and those worthless dealer options like edge guards and paint protection that add thousands to the price. It’s such a scam. I’m very happy with my 2019.

[Raftergirl]

20. My lease on my Lexus es350 sedan is up in June

so I’ll be getting a new car then. Going to go with a hybrid so will get an SUV 350H as the hybrid sedan(es300) is just a glorified Camry. I’m sure I will be paying more than I am now. 🤷?♀️
Hoping that in 3 years they will have a hybrid 350 sedan or an all electric one. Not a fan of SUVs.

H will be getting an all electric car for his next vehicle. But will not be a Tesla. He only drives his car around town while it’s my car we take on road trips so it’s always our nicer car.

[pecosbob]

22. Got rid of my truck. Now I ride a bicycle to work. I'm 63.

Last edited Sat Feb 4, 2023, 10:35 PM - Edit history (1)