The market for car and truck buyers is just around the corner

  • The average price of a new car or truck is $46,425 The 49-day supply has been steady since January, says Cox Automotive.
  • At least you can afford to drive since gas is averaging $3.68 a gallon right now.
  • Chevy is pushing for a starting price in the low $30,000s for its Equinox EV, shown above at the Detroit Auto Show last week and arriving next year.

    Used car prices fell 0.1% in August, according to data from the Commerce Department, one of the few bright spots in the consumer price index, which did not fall as quickly as economists had expected, sparking fears that were borne out on Wednesday. when the Federal Reserve raised interest rates. rate by another three quarters of a point.

    A 0.8% rise in prices for new cars and trucks pushed headline annual inflation to 8.3%, a modest decline from July’s 8.5%.

    “The prices are a bit misleading,” says Michelle Krebs, executive analyst at Cox Automotive. “Price growth is falling, but prices remain high.”

    New car prices seemed high for many middle-class consumers when the average transaction price (ATP) topped $36,000 before the COVID-19 pandemic. When automakers decided to keep their computer chips in limited supply for more expensive models, ATP jumped by about a third.

    Cox Automotive reported for August that the average list price for a new car was $46,425, down slightly from the previous week, but the mix remained strong. According to the August CPI report, new car prices rose 10.1% compared to August 2021, and used vehicles will cost you 7.8% more than a year earlier. Cox Automotive’s August median list price for a used car was about what you might pay for, say, a fully equipped new Honda Civic at $28,061.

    Gas and diesel prices, fortunately, are not fixed at a high level. The Commerce Department’s gasoline index fell 10.6% in August (see table below). According to AAA, the national average price for a gallon of regular unleaded gas, which peaked at $5.016 on June 14, fell to $3.707 a gallon on September 13, the day the August CPI was released.

    Higher new car prices could be one way to bring parity between aging combustion engine cars and electric cars, which sell for an average of $66,000.

    Bureau of Labor Statistics

    While Telsa and Ford with the F-150 Lightning EV were recently forced to accept price hikes due to shortages of critical parts and materials, there are a number of more modestly priced models on the way. General Motors appears to be taking advantage of its Ultium one-for-all BEV architecture, for example, as company president Mark Reuss recently announced that the Chevrolet Equinox EV will arrive next year with prices starting in the “low $30s.” Even well equipped, it should sit somewhere below the current ATP for all models.

    More importantly for new car buyers, Cox Automotive says deliveries of key models are nearing. In pre-coronavirus days, an 80-day supply was about optimal for mass-market models, and some full-size pickups, for example, often exceeded the 100-day supply.

    According to Cox Automotive, the average inventory is now 49 days. That’s been pretty steady since January, though up a full 30% from last year—meaning dealer lots are no longer empty. Improving supply means the potential for some old-fashioned manipulation of car sales staff and their managers, and it’s possible that some big brands could go from supply starvation to feasting on leftovers for consumers.

    How has the economic turmoil affected your car purchases? Please comment below.

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