There’s likely something to this. Tons of people work for an auto company, so new cars are frequently bought on an employee plan, which are typically MSRP - X% type deals. Would keep used car prices down in the area I would think.
1 Like
My condo hit the MLS this afternoon. Hoping for 10% over list price.
4 Likes
Is timing the car market really any more reliable than timing the stonk market. Prices could stay higher a lot longer than you may think.
The supply of car production is way easier to ramp up than the supply of houses.
1 Like
Well, for my sake, I hope you’re right.
True. But nonetheless it’s not a given the auto crunch will be over anytime soon. Total auto sales are off by something like 8 million since the start of COVID in the USA, and 20 million across the world. The backlog of older cars that need replacing grows every day. Fleets were downsized early in the pandemic and will have to be rebuilt as well, and smaller fleets are being driven like crazy which means the entire thing will have to be replaced soon.
Even if all the production problems magically got fixed, there’s years of backlog in order for the car market to become “normal” again, and it seems pretty likely that the market will reset at these higher costs (esp in nominal terms) when it does.
1 Like
Knowing absolutely nothing about it, I’ll take the over.
4 Likes
There are somewhere between 800 million and 2 billion parking stalls in the United States . There are between 3 and 8 stalls for every registered vehicle. Surface parking lots alone cover more than 5% of all urban land in the United States.
You’re not wrong about this, but the principle contrast with housing is that there isn’t a politically powerful group of car owners demanding that no more cars be made or imported. Car makers want to make more cars. Car dealers want more cars to be made. Car buyers want more cars to be made. There is no party analogous to NIMBY homeowners who oppose the creation of new housing because it might reduce the rate of appreciation of their home value, and even if you can find a car owner like this, their power is zilch compared to home owners who think like this. It’s not exactly clear when car prices will come down because supply increased, but virtually everyone relevant wants to sell more cars at slightly lower prices than fewer cars at slightly higher prices.
/r/fuckcars tho 
1 Like
Those people don’t have the power to do anything but make cars cheaper via reduced demand!
Yeah the price of cars won’t stay this high. Profit per unit sold at these prices is way too big of an incentive to make more cars.
Either they’ll get more semiconductors somehow or they’ll start making cars that need fewer of them, but no matter what there will be more cars than there are currently.
Ironically there will inevitably be a glutted used car market at some point in the next 5 years.
So yeah don’t buy a car right now unless you absolutely have to. These high prices are the market telling you not to buy unless you’re willing to get absolutely mugged or have no choice.
I was absolutely going to replace our older car that is starting to have problems after our house closed, but instead we’ll just put more miles on the newer one.
It’s entirely possible that car prices stay flat while inflation rages when supply normalizes, but that is the same as cars getting cheaper.
The issue with waiting years for a car purchase (EV) is the dwindling of the $7500 tax credit. Eventually the current manufacturers are going to run out. Just something to consider.
The case for apples-to-apples decreases in car prices is basically the case for a recession.
Cars are up about 15% YOY, versus inflation of 7%. The car figure isn’t for an equivalent car, but rather average sale price, which has skewed dramatically towards higher-end cars & SUVs with the chip shortage (devote chips to the cars making the most money). And it’s questionable the degree to which auto makers will resume making lower-profit sedans at all.
Meanwhile, underlying production costs (materials, labor, and transportation) are increasing like crazy. Getting back up to 17MM cars per year (from around 13MM) is going to require supply chain issues getting figured out, and even then we’ll just be at the pre-pandemic consumption rate. We really need to produce a few million more cars per year for a few years to get back to even, while the inputs are already so scarce as to be jacking up prices even at these depressed production levels.
I work in the auto industry on the construction side and I’m busier than I’ve ever been right now, as companies are trying to expand capacities through new plants and plant expansions. I shuddered when I heard the Vinfast North Carolina announcement. But most of this stuff won’t make a difference for years to come. Heck, a lot of my work right now is replacing existing capacity that is being cannibalized by other industries. We’re doing silly, expensive projects right now that never would have made sense normally, just to keep this low production level from going even lower.
The only way cars get much cheaper is if consumers start demanding more sedans (reversal of decades long trend) and/or production costs decline (recession). This is probably the historically worst time to buy a car, but I don’t see the case that it will be much better in the next 24 months, barring a recession.
3 Likes
Do you build or design assembly lines/plants?
I work in an industry that as a whole is a big part of the auto supply chain although we specifically do more industrial/agriculture/aerospace type stuff.
Parts of assembly plants, as well as specialized facilities away from assembly plants. Nothing to do with assembly lines, though.
I’m about to begin a major expansion of my freight brokerage operation (first new guy starts Monday), so if any of you are dealing with logistics purchasing decisions at all I’d love to hear from you. Particularly you manufacturing people as moving weird flatbed machinery is like 80% of my business already… and the shippers are themselves manufacturers lol.
1 Like
Why does he think anybody on Earth who isn’t an economist or wasn’t recently unemployed gives a shit about “good news on jobs”? Almost everyone who got laid off during covid was making more on unemployment++ than they were in their service industry job.
The most amazing thing about covid-economics to me is that Biden has chosen not to swing open the immigration gates when we are facing a labor shortage.