Car Market in 2023
Muddy
USA
Average car payment on a new car over $700 a month closing in on $800
Average price of a new car over 50k closing in on 60k
Average price of a new Ford 66k.
Car payments over 1K are becoming more popular.
Repos are up. More folks going underwater.
Covid money spigot now turned off for the most part.
Credit card debt record highs.
Just hearing some of this stuff the bottom has to fall out at some point. You guys in the market out there, thinking about buying or selling? I've been looking since before Covid now, if only I bought in 2019 I might've paid the same or even less for the same year models I was looking at. I'll been holding on but need to get a car soon personally, I'm right up on 300K miles but looking at this stuff I just have to bear down and hold out another few months here. I'm looking at diving in after all the tax season stuff but I'm also not waiting for 2024. How about y'all out there.
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https://www.vice.com/en/article/m7bqx3/c…
To put in perspective, I was looking at a car in 2020 (right before COVID started) it was a 2018 model. I didn’t buy because I didn’t need it. When COVID started I thought “am I going to lose my job?” “What’s going to happen to the economy?” “Do I want a car payment if the economy is going to shit and I won’t even be able to go anywhere?”
So that 2018 model car is really 6 years old now. STILL retailing for more than it was in 2020 with similar mileage.
Read the article I posted - they talk about no tax season rush this year and dealers are still struggling with inventory and are paying significant markups themselves now too to acquire preowned inventory.
Lastly - I almost bought a SUV last month but the dealer in New Jersey has a $3,000 buyers fee attached to the SUV that I was made aware of at the last moment. I said “no thanks.”
If you're buying automobiles with cash you're losing money, never buy a depreciating asset with current dollars, and now with inflation that becomes an even more important rule of growing wealth.
But I have that new car fever. The next generation of Mustangs is coming out this summer and I am going to take a look. I don't need another 25HP(new ones are 485) and I'm not wild about the colors but the urge won't go away. When the news ones are available, I will talk to my local dealer. If I can get what I want for my trade in plus about $20k, I'll probably go for it and pay cash for $20K. I need something other than strippers to spend my cash on. My kids tell me to go for it.
Credit card debt all time high
1,000 month car payments for the average American becoming the new norm
Wages not keeping up with inflation
But
Jobs still aplenty (at least in the areas I travel to)
Home values still holding strong almost everywhere in the US
Stocks have taken a beating but have not crashed
But with all that said, the markets will adjust as demand dwindles. I don't agree with 25 that 0% financing will ever come back while the Fed Funds Rate is this high, but prices will have to adjust to make cars affordable to the mass market. The laws of supply and demand don't go away just because interest rates are up and inflation is high.
The interest rate in the automobile industry is purely a function of demand, there’s always a few models that just don’t sell for one reason or another, the marketing department of most automotive manufacturers will do what’s necessary to move overstock from inventory it it needs rebates or reduced financing the don’t really care, the longer product stays on a dealers lot the lesser the profit will be, so sure we’ll see zero finance options again, maybe not in the same form as in the past, but it’s just one of many tools marketing people use to move products