The average price for a new vehicle jumped from $39,919 in 2020 to $48,798 so far this year, according to Kelley Blue Book. A chip shortage, disruptions in the global supply chain and strong demand pushed prices higher. Household debt is rising.)Ĭar prices were rising long before the auto workers even raised the possibility of a strike. (Rejections are also up for mortgages, credit cards and other loans, as lenders recoil at the growing number of people falling behind on payments. The Federal Reserve Bank of New York said this month that the rejection rate for auto loans is now 14.2%, the highest since the bank started tracking figures in 2013 and up from 9.1% six months ago. High rates are contributing to a spike in rejections for consumers looking to buy a ride. The average rate for a new-car loan this week stood at 7.46%, and for a used car, it was 8.06%, according to Bankrate. Drury says leasing companies want their cars back while the used-car market is hot, and might be unwilling to extend the lease.Īnyone shopping for a new, used or leased car right now will also be hit by higher interest rates. “Used-car values, which have been seeing a bit of a decline from last year’s highs, could start going back up” as consumers look for an affordable alternative to new vehicles.Ĭonsumers who lease their vehicle and are coming to the end of the term could be especially vulnerable. “You’ll start to see that pricing gets affected everywhere - and not just on the new end of the business," Drury says. Consumers who need a vehicle would likely turn to nonunion competitors like Toyota, Honda and Tesla, who would be able to charge them more. “Dealers will say, ‘Look, we’re not sure how many additional vehicles we’re going to be getting.’ There could be somewhat of a panic effect that could stimulate consumers to make that purchase sooner rather than later.”Īs cars from Ford, GM and Stellantis, the successor to Fiat Chrysler, become harder to find, there will be a ripple effect. “The impact on prices would be almost instantaneous,” Nelson says. The biggest wild card could be consumer psychology – panic-buying that would drive up prices. Those incentives let dealers reduce their sticker prices, and they’re often targeted at slower-selling models. Garrett Nelson, an auto analyst for CFRA Research, expects manufacturers to eliminate incentives they pay to dealers to boost sales. While the supply of cars from Detroit’s Big Three will largely depend on how long the strike lasts and how quickly it spreads to other plants – there were rumors Friday that additional factories could be added next week – there are other factors. The car companies have plants in Mexico that could keep producing some models – as long as they have a supply of parts. If the strike isn’t ended soon, however, there could be shortages of some makes and models –big sellers or vehicles that are already in short supply, such as Chevrolet Silverado and Tahoe, GMC Sierra and Ford F-Series pickups. “We really want to encourage customers: Don’t be afraid,” Stewart said, while suggesting they see the deals available at dealerships. Action News Jax is an affiliate marketer for Local Steals and Deals and receives financial consideration in connection with the service.Mark Stewart, chief operating officer for North America at Stellantis, also said his company has contingency plans to limit the impact on consumers, though he declined to give details about them. The webstore is operated under different terms and conditions than. Shipping policies and rates are determined by each brand and are listed at the time of purchase.
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