Have you looked at new car prices?
Like some of you, I love to check out car models and drive salesmen crazy with the classic "just looking" line. I look at the sticker and check out all the options. It's an old habit and a wonderful way to kill time when my wife is at the mall. It beats drinking another cup of coffee at the mall café.
Last week, I made another trip to the local dealership. Everything looked normal except for the prices. Check this out:
With interest rates rising, it's also becoming harder to spread the pain of higher pricing with long-term financing.
The average monthly payment on a new car loan was almost $700 in June, up 13% from a year ago, researcher J.D. Power reports.
A $700 monthly payment? I remember when that was a good down payment. Naturally, sales are down, with more people heading to the used car area, or "pre-owned," as they call it now. Read on:
The annual selling rate is expected to decline to 13.2 million vehicles in June, down 20% from a year earlier, according to the average forecast of six market researchers surveyed by Bloomberg.
Prior to the pandemic, annual US auto sales topped 17 million vehicles for five consecutive years from 2015 to 2019.
Sales are declining as the global semiconductor shortage continues to roil auto production and drain inventory from dealer lots.
General Motors Co. said Friday second-quarter sales and profit will take a hit from 95,000 vehicles it can't sell because it's waiting on chips to complete them.
The inventory shortage drove the average price of a new vehicle to nearly $47,000 in May, up more than 13% from a year ago, according to automotive researcher Edmunds.com.
Anyone talking recession? New car sales down 20% sure sounds as though an economic slowdown is coming.
My old college economics professor had an expression about the car business and the national economy. He called it the best barometer for a recession. He may turn out to be right again.
Image: Allen Tennyson.