Why car prices are still so high — and why they are unlikely to fall anytime soon

[PigsDad]

I found this article interesting regarding new and used car prices. It was also enlightening to read about how much car makers have cut the manufacturing of their less expensive, entry level vehicles, forcing buyers to the more expensive models.

https://www.npr.org/2023/03/18/1163278082/car-prices-used-cars-electric-vehicles-pandemic

Kurt

 

[Patri]

Darn. I want to buy an SUV sometime this year, no hurry. Someone saw an article that there should be more used cars on the lots this summer, because people that paid more than they could afford will end up losing their vehicles to the lender.

 

[GetawaysRus]

Prices tend not to follow the laws of gravity. What goes up does not necessarily come down.

Our youngest car was purchased in 2012, and our oldest is a 2001. I'd love to buy a new car, but I just don't think I want to fight it out in this market.

 

[T-Dot-Traveller]

I found this article interesting regarding new and used car prices. It was also enlightening to read about how much car makers have cut the manufacturing of their less expensive, entry level vehicles, forcing buyers to the more expensive models.

https://www.npr.org/2023/03/18/1163278082/car-prices-used-cars-electric-vehicles-pandemic

Kurt

Re : Nissan and their model selection mix - remember the Nissan Micra - the least expensive car in America

Well it is still in production in Mexico and was redesigned and updated in 2021. [ model name Nissan March]
When we spent 5 days in Mexico City in Feb. we took many Ubers and rode in March's; as well as Chevy Sparks & Aveos
and many other small vehicles that are being mfg. but not sold north of the Rio Grand.

 

[Snazzylass]

Car prices...and, home prices!

 

[ScoopKona]

The short answer is that people are still buying them -- and paying list, or over list, or way over list. So long as that's the case, why would dealers lower their prices by even a penny? Certainly not to generate good will. They're already reviled.

When sales numbers start sliding, prices will go down.

 

[LannyPC]

The short answer is that people are still buying them -- and paying list, or over list, or way over list. So long as that's the case, why would dealers lower their prices by even a penny? Certainly not to generate good will. They're already reviled.

When sales numbers start sliding, prices will go down.

It's that simple law of supply and demand.

 

[rickandcindy23]

Prices tend not to follow the laws of gravity. What goes up does not necessarily come down.

Our youngest car was purchased in 2012, and our oldest is a 2001. I'd love to buy a new car, but I just don't think I want to fight it out in this market.

Right there with you. We have a 2003 Toyota Avalon that is still going strong. I see no reason to overpay for our next car, so we are biding our time.

 

[dioxide45]

I was seeing th

The short answer is that people are still buying them -- and paying list, or over list, or way over list. So long as that's the case, why would dealers lower their prices by even a penny? Certainly not to generate good will. They're already reviled.

When sales numbers start sliding, prices will go down.

I am not so sure this is the case. Inventories of cars is going up, someone will blink first then all the other manufacturers will be forced to follow suit. Stellantis is sitting on over 100 days of inventory. Still less than pre pandemic, but it shows that people are not buying at the same rate they were as prices and interest rates have gone up.

 

[klpca]

Prices are ridiculous - I should know because we just had to buy a new car. My Mini needed $$$ work plus I needed a more comfortable car. My RA is starting to be more problematic and the Mini ride is just too stiff. We found the best deal using Costco. I suppose we could have shaved off a few more $$ but I just wanted to get it over with. We looked at used cars too but if the car had low miles the price was almost as much as new, and if the price was about 25% less than new, the car had over 50k miles. It is still a crazy market.

 

[PcflEZFlng]

I've taken a look at used car prices, and they're almost as high as new. I'll just wait until prices eventually settle back down. In the meantime, although I would like to have a more modern car, perhaps a plug-in hybrid, I'll keep my 2007 Hyundai Sonata, which has been very reliable. So is my wife's 2015 Honda Accord.

 

[Bucky]

Gotta love inflation. Problem is that many people don’t understand that a great deal of it comes from the high employment numbers. The more people working creates more demand. Once all of the recent and near future layoffs take effect, the prices will start to drop. In the meantime it’s what has already been identified. Supply and demand. Until we are smart enough to be able and negotiate deals the big boys will continue to reap the profits. I’m a firm believer the dealers will eventually be the first to blink since they have the most to lose. But, for the last 3-4 years they have made record profits so it may take awhile.

 

[funtime2]

Right there with you. We have a 2003 Toyota Avalon that is still going strong. I see no reason to overpay for our next car, so we are biding our time.

Love our Avalon! Let the miles keep rolling. Keep her maintained and she will stay faithful.

 

[klpca]

I’m a firm believer the dealers will eventually be the first to blink since they have the most to lose. But, for the last 3-4 years they have made record profits so it may take awhile.

From what we saw, this may be awhile. The lots are almost bare. We had to wait for a car to arrive. It is so different than the past. Our local Ford dealer used to have not one but two lots to park the unsold inventory. Both are empty now and the dealership lot looks kind of sad with just a few cars there.

 

[CalGalTraveler]

@klpca we sold our mini a few years ago because tiny fixes such as a new gasket required $800 for the repair shop to lift out the engine or other major pieces every time to fix. This was a very expensive car to repair!

 

[Timeshare Von]

The short answer is that people are still buying them -- and paying list, or over list, or way over list. So long as that's the case, why would dealers lower their prices by even a penny? Certainly not to generate good will. They're already reviled.

When sales numbers start sliding, prices will go down.

Agreed . . . and "higher prices" are now the new normal so why would they reduce their prices . . . even if their costs have dropped? Only thing that may help to bring prices down will be if the supply & demand curve crashes and they have a glut of cars sitting on dealer lots and backed up at the ports.

 

[Timeshare Von]

We have a 2012 Hyundai Santa Fe (my car) with 195k miles on it . . . and a 2019 Dodge Caravan (Mr. Timeshare's vehicle) with around 40k miles on it. I had thought about buying a new SUV back in 2019, but opted to wait in hopes to milk a few more years and miles out of it. DH's 2002 Pontiac Montana van blew the head gasket in December 2019, forcing us to replace it. In January 2020 we bit the bullet and bought the Caravan "Certified Used" from a dealer. It had only 20k miles on it, and we paid just under $18k. THANK GOODNESS it was before COVID and the supply chain issues that followed. We've seen dealers with the very same vehicle TODAY for sale with significant miles for over $20k! We were lucky as timing is everything.

 

[CalGalTraveler]

Should we sell our eGolf now while prices are high and battery still has life? We are nearing the 4 year mark for our eGolf. Kelly BB says we can get about $20k for trade-in value or 22k private party. (We paid about $14k all in so this would be a profit toward a new car). The car has been excellent and is rated with 5s. This is our town car for 90% of our driving. We have two older ICE cars available to drive so we don't need to buy another car right away so could wait until prices drop or EV technology improves.

I read that the warranty is a good tell as to how long they expect the EV battery life to last because Mfrs don't want to get stuck with replacing an expensive battery (5 year warranty in VW eGolf).

We would like to replace it with a plug in Hybrid because our other cars are aging and we need a reliable road trip vehicle.

 

[klpca]

@klpca we sold our mini a few years ago because tiny fixes such as a new gasket required $800 for the repair shop to lift out the engine or other major pieces every time to fix. This was a very expensive car to repair!

107k miles and this is my first big bill - everything is related to my suspension and I blame the state of the roads in my city. Potholes everywhere. Otherwise I have only had two additional repairs and both were covered by Mini. of course I drive like an old lady so that I can get my 35mpg, lol. So for me it has been a surprisingly reliable car. I know that I am an anomaly though - my service advisor can't believe how little I have had to spend. I have absolutely loved this car but I just need something more cushy. My new car is a Subaru Outback - roughly twice the size of my Mini or thereabouts.

 

[RX8]

Should we sell our eGolf now while prices are high and battery still has life? We are nearing the 4 year mark for our eGolf. Kelly BB says we can get about $20k for trade-in value or 22k private party. (We paid $14k all in so this would be a profit). The car has been excellent and is rated with 5s. This is our town car for 90% of our driving. We have two older ICE cars available to drive so we don't need to buy another car right away so could wait until prices drop or EV technology improves.

I read that the warranty is a good tell as to how long they expect the EV battery life to last because Mfrs don't want to get stuck with replacing an expensive battery (5 year warranty in VW eGolf).

We would like to replace it with a plug in Hybrid because our other cars are aging and we need a reliable road trip vehicle.

I seriously looked at a used eGolf. Range was only 75 but otherwise looked to be a real solid car. I really wanted it but I ended up getting a 4 year old certified used Kia Soul EV right before the used car prices spiked as it was about $4000 cheaper than the used eGolf. Range is 93 with a 10 year battery warranty. Like you, that EV is used for running errands on a daily basis. If an EV has a perfect niche, it is the daily “drive around town” kind of car.

 

[CalGalTraveler]

@klpca You are lucky. We sold ours at around 95k miles with many costly fixes. Finally the turbo failed. Cost more to fix than the car was worth.

 

[Carolinian]

Darn. I want to buy an SUV sometime this year, no hurry. Someone saw an article that there should be more used cars on the lots this summer, because people that paid more than they could afford will end up losing their vehicles to the lender.

I have seen similar predictions based on rising loan defaults and repos.

 

[Tia]

Saw a post asking for help not so long ago. She had a Nissan that used to connect to her phone but no longer was, she called Nissan. They told her they could not help her. Is this one of those things that they have installed but if you want it you have to pay a subscription for?

 

[Carolinian]

Saw a post asking for help not so long ago. She had a Nissan that used to connect to her phone but no longer was, she called Nissan. They told her they could not help her. Is this one of those things that they have installed but if you want it you have to pay a subscription for?

The more bells and whistles put on a car, the more to go wrong with it. That is one reason I love my two summertime cars, a 1968 Olds Cutlass convertible and a 1968 MGB. Also simpler mechanics, which are easier and cheaper to fix.

 

[chellej]

DH was thinking about buying a new truck last fall. He has a f250, 2010 diesel... in 2012 we paid 30k for it. A similar vehicle today is 80k - used. It has just over 100k miles so he decided to just do some upgrades...tommy lift, new bed cover and new racks. Spent 10k but was better than a new /used vehicle