Automakers are returning to business as usual.
Car prices have been sky-high for a while now, but they’re starting to come down. If you’ve been watching the used car market in your area, you might have already noticed certain models are seeing huge price drops as things finally start returning to normal. A new report from S&P Global Mobility indicates automakers are going to help really burst the bubble for used and new car prices this year, providing some much-needed relief to shoppers.
See the bad news Ford just released here.
S&P concluded that both forces in the auto industry and macroeconomics could mean automakers go back to fighting over market share. That means they would be producing as many new cars as possible instead of keeping production volume low while concentrating on high-profit-margin lines.
We’ve watched the average transaction price for a new vehicle in the US skyrocket in the past two years, so if this does come to fruition that figure could plunge down to near $30,000. Considering it’s become increasingly hard to even buy a Honda Civic for under that amount, this is great news.
Yes, that means you probably won’t have to pay thousands over MSRP for a new car anymore. That’s been a thing since 2021, with some dealers taking advantage of the shortage of new vehicles more than others. We wonder if shoppers will remember which dealerships did those sorts of things and shop accordingly.
However, the future is difficult to predict. After all, nobody in January 2020 thought car production would almost grind to a halt a few months later, then demand would surge, and automakers would slowly ramp up production again over the space of two-plus years. We hope this fight for market share becomes the strategy of most automakers again since that would bring relief people desperately need these days, but nothing is certain at the moment.
Read the S&P Global Mobility report here.
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