I hope none of you have had the misfortune of needing to buy a new car lately. Maybe it’s just my limited income but holy crap have cars gotten expensive. New cars, especially full sized trucks, are stupid expensive. Who the heck is paying over $75,000 for a Ford pickup? Then the dealerships adds on fees that push the price up thousands more. It’s nuts.
Back in the early ‘80s I paid $15,000 for my first house. Sure, it was small and needed updating, but it was an actual house. I did six weeks of work on it before we moved in, but we could have moved in right off. So when I see a truck for $75,000 my mind says, that’s five first houses. Intellectually I know decades of inflation have to be figured in, but my gut still says five houses.
Supply issues caused some issues with new cars, but those days are over. There’s some indication that dealerships aren’t putting too many cars on their lots to give the impression there’s still a shortage. Eventually growing inventories will catch up with them and prices will come down.
Then there’s the fact that it’s getting more expensive to borrow money. A lot of people don’t even focus much on the actual price of things. They focus on their monthly payment. When money was cheap they could eat higher prices. With money getting tight, not so much.
Of course with new cars so hard to get used cars went up in price along with it. It was not uncommon for used cars to go for higher than the list price of new cars. That’s madness, but when the new cars where unavailable it was what the market could bear.
Used car prices are starting to come down and I expect them to drop a lot more in the coming months. One reason is that new cars are available so that will reduce demand for used. Another thing that’s going to happen is that more used cars are about to hit the market.
So how do I figure that? Times are getting tough. People are finding themselves short of cash. A car is one of the few things a lot of people own outright. Selling it in a hurry is a way to pay the other bills. Most people aren’t selling their only car, but people are wondering how many cars they really need. A lot of kids are going to find themselves taking the bus.
As for myself I’m going to keep up on vehicle maintenance. I’m in no hurry to jump into the car market any time soon.