Sean McClain
speaker
69 appearances
1 recordings
1 series
first heard Feb 2023
last heard Feb 2023
Sean McClain’s voice in public audio — every appearance, attributed to the second.
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Appearances
The issue that the car industry is facing now is not only do we have high prices, but higher interest rates as well, which is making those monthly payments much more difficult for many buyers.
Thanks for having me.
Well, the good news is that vehicle inventories are coming back as carmakers can produce more of them.
It seems the semiconductor shortage is ending and there are more cars than there have been in a long time available for sale.
There's still about half of pre-pandemic levels.
The problem is we're still hitting all-time records in sale prices and most car makers expect that these tight supplies will last throughout the rest of this year.
Well, buyers we've spoken to and dealers as well say that customers are discouraged by the price of purchasing a car.
The shortage of new cars over the pandemic really pushed up the price to record levels, and that's why they're staying away.
People are holding on to cars longer than ever in the U.S., and dealers are now starting to be worried about that.
The average price paid for a new vehicle hit a record of $47,362 in December.
While those record high prices obviously kept many buyers away during the pandemic, the issue that the car industry is facing now is not only do we have high prices, but higher interest rates as well, which is making those monthly payments much more difficult for many buyers.
And then you compound with that the fact that
used car prices, which had risen rapidly over the pandemic and allowed people to earn more from their trade-ins, those wholesale values of used cars are now falling as well, which means there's a bigger gap to overcome.
And I think the last piece of the puzzle here is that during the pandemic, automakers really focused on producing higher-end versions of each model.
I mean, the thesis there was that if people are buying fewer cars, they should buy more expensive ones to sort of make up the difference so we're not losing our shirts here.
But for customers, people trying to buy the cars, the problem is they go to a dealer lot, and even if they put in an order for a base model of a vehicle, which doesn't cost $47,000, I mean, it could be months before they could even see that if they see it at all.
There really isn't.
The selection of vehicles to customers is thinner than it has been in a while.
And that's what's keeping a lot of customers away.
I mean, cars still depreciate and it's hard to sort of make that payment work.
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