Average Transaction Price for New Vehicles Hits Record $45,844 in June, as Consumer Still Pay No-Matter-What, amid Inventory Shortages, Record Per-Unit Gross Profits at Dealers

And despite the surge in interest rates for auto loans.

By Wolf Richter for WOLF STREET.

The average transaction price (ATP) of new vehicles sold by dealers to retail customers in June hit a new breath-taking record high of $45,844, up by 14.5% from a year ago, and beating the prior record set in May, according to estimates by J.D. Power, even as the pace of new vehicle deliveries to retail customers in June is expected to have plunged by 18% from a year ago, while many dealers were short or out of the models that would sell in large numbers, as automakers continue to struggle with semiconductor shortages, triggering production shortfalls.

With overall inventories near historic lows, and barely improved from the desperate levels last year, prices continued to surge, driven by historically low incentives from automakers and by addendum stickers from dealers, but also by the prioritization of the most expensive trim packages and models by automakers, and that’s how the ATP jumped to a new record.

Since June 2019, the ATP has spiked by 36%, or by over ten grand! The chart shows ATPs for December and June of each year. Note the pre-pandemic seasonality, where the ATP hit a high in December but dropped from there to June every year. But in June 2020, the ATP was level with December for the first time. From then on, the ATP just spiked without regard to seasonality, including this June. The green line connects the Decembers:

The inventory nightmare.

June started out with new vehicle inventories at desperately low levels as automakers continued to struggle with the semiconductor shortages that will now drag into 2023. Months ago, many automakers stopped taking orders for certain models for the 2022 model year, where waiting lists were so huge that they cannot be built this year, given the supply constraints.  For example, Ford stopped taking orders and reservations for the 2022 Maverick baby-truck (hybrid), the F-150 Lightning (EV), and the Mustang Mach-E (EV).

So June started out with 1.13 million new vehicles in inventory on dealer lots and in transit, down by 70%, or by 2.68 million vehicles, from the beginning of June 2019, according to separate reporting from Cox Automotive, based on its Dealertrack data. In all of 2019, the new vehicle inventory averaged 3.66 million vehicles, with many models simply out of stock and not even orderable. Starting a few months ago, an additional inventory problem cropped up: Customers, mauled by spiking gasoline prices, started switching to more fuel efficient cars and compact SUVs that no one was prepared for, and dealers ran out.

So, record per-vehicle gross profits at dealers.

The combination of enough demand that cannot be built due to the semiconductor shortages and these historically low inventory levels that resulted in record high ATPs allowed dealers to make record per-vehicle gross profits.

Total gross profit per vehicle delivered – which includes gross profit from the vehicle plus the profit from finance and insurance sales (F&I) – jumped to a record of $5,123, up by $1,174 from the already sky-high levels of June 2021, according to J.D. Power estimates. This per-vehicle gross profit at dealers is over 2.5 times of what it was in the normal times of June 2019.

At the per-vehicle level, the amounts of money made by dealers are just astounding, as consumers pay no matter what, including big-fat addendum stickers. This is a reflection of the inflationary mindset, and dealers and automakers adjust pricing to take advantage of it. Consumers could just as well go on a buyers’ strike and refuse to buy or order at these ridiculous prices, which would end these price spikes, but they haven’t yet.

These massive per-vehicle gross profits allowed all dealers combined to make $4.9 billion in aggregate in their sales departments, up by 10% from June last year, and the fourth biggest profit for any month, despite the plunge in volume.

Automakers slashed incentives to record lows, lease incentives died.

The average amount that automakers spent on incentives, either paid to dealers or rebated to retail customers, dropped by 59% from the already lowest levels on record a year ago, to just $930 per vehicle on average, the second month in a row under $1,000, according to J.D. Power estimates. This includes incentives for leases, and those have been eliminated entirely.

Incentive spending as a percent of MSRP in June dropped to a record low of about 2% of MSRP. By comparison, back in 2019, incentive spending was in the range of 10% of MSRP.

Incentive spending is how automakers adjust prices since the MSRPs are set at the beginning of the model year and are not changed during the model year.

This massive reduction of incentive spending translates into huge per-vehicle gross profits for automakers.

Affordability? Forget it.

The average interest rate on new vehicle loans rose to over 5% in June, according to J. D. Power estimates. And despite record high trade-in value due to the ridiculous spike in used vehicle prices, which bring down the amount to be financed, the average monthly payment jumped by 12.8% from June last year.

But at this point still, consumers who can afford it pay no matter what to get a new vehicle, and many of them now order it, and they pay addendum stickers, and they pay higher interest rates, and demand still exceeds supply.

Most consumers could just as well drive what they already have for another year or two or five, which makes new vehicles a discretionary purchase, unlike food. And consumers could react to these prices and interest rates, but they haven’t yet, which shows that the inflationary mindset is running wild.

At some point, the Fed’s future rate hikes may finally lead to auto-loan interest rates that are so high that they will cut demand below the level of supply, allowing inventories to build, and prices to settle, and inflationary pressures to recede, but not yet.

It remains hard to see what actual demand would be under these conditions if supply were back to pre-pandemic normal levels. And all this shows is that inflationary pressures in new vehicles are not yet receding because enough consumers continue to play along.

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  229 comments for “Average Transaction Price for New Vehicles Hits Record $45,844 in June, as Consumer Still Pay No-Matter-What, amid Inventory Shortages, Record Per-Unit Gross Profits at Dealers

  1. dan says:

    This is part of the re-set. A lower standard of living.

    • DawnsEarlyLight says:

      What? Reset? It looks just as Wolf has pictured it in the article. Give it some time.

      • Old Ghost says:

        Wolf wrote: ” per-vehicle gross profit at dealers is over 2.5 times of what it was in the normal times of June 2019.”

        Record profits. Where is the incentive to do anything different ?

        • DawnsEarlyLight says:

          Yes, not the best time to buy a new car.

        • Educated but Poor Millennial says:

          My lease is close to be over and its best time for buying my leased car for the contract price , about $12k, same car in the market is $18k buying from private party and being offered by dealers for $21k.
          If I return my leased car, I will get $2000 as bonus. LOL but I have to pay premium again for a new lease

        • JD says:

          Quit leasing cars. You’re getting fleeced.

        • Phil says:

          You’re getting forced when you buy at these prices too, so…

        • Phil says:

          *fleeced

      • Greg says:

        Record profits, Record prices, Record demand, Record labor costs, Record employment. As long as the customers are willing to pay, what is the problem? If you cannot afford a new car, stick to an older one like Wolf said. The Fed wants to kill wage inflation, but was perfectly fine with asset inflation for 20 years.

    • Vince Foster says:

      “Lower your expectations.”

    • RH says:

      True: the banksters are using the negative interest rates they have had to pay their depositors, repo lenders, and their “Federal” Reserve cartel (if they need Fed bailouts, because all interest they pay has been below the true rate of inflation) to buy up real estate and other key items. I understood farmland, transportation, and storage were key focuses for them. Soon, the non-rich Americans may mostly, effectively be like peons and alone pay 99% of income taxes.

  2. El Katz says:

    In my experience with Dealertrack, – (which, admittedly is a few years old at this point) – their data is skewed because the feeds they get from the dealerships are not uniformly placed across the country nor are they equally representative of the franchises reporting.

    IIRC, there are large blocks of non-reporting dealers in certain geographic areas (I think Chicago was one of them… I had to arm wrestle a friend into subscribing so we could be represented by more than 2 dealerships) and there were large holes in flyover and the PNW where reporting was zero.

    Estimates of incentive spending are notoriously inaccurate. I had actual $ figures PNVR for the company I worked for and DT data often overstated them by multiple 100’s. They could also be understated, depending on how the incentives were structured as they couldn’t see the penetration of certain types of offers (things like military discounts, owner loyalty, stair-steps, etc..).

    Sure, the numbers are useful for comparison – but that’s only if the pool of contributing dealers remains consistent.

    • Wolf Richter says:

      The Dealertrack inventory data tracks fairly closely similar data from the Census, which is derived from surveys of dealerships across the board, but lags Dealertrack by more than a month. We just got April data from the Census, while Cox Automotive, which owns Dealertrack, already provided end of May data.

      Ignore the data at your own risk!!

      • El Katz says:

        My comments were focused primarily on incentive spending. For inventory data we used our own records as well as DMS (Dealer Management System) output – which was real time.

        The company was “weird” by automotive standards in that we didn’t chase market share for the sake of chasing market share. We sold to our business plan and adjusted strategies to achieve those numbers while maximizing plant profitability and production. How many cars Chrysler, Toyota or Ford had in inventory bore little influence on that. Worrying about everything a competitor is doing leads to stupid decisions (chasing market share) and a ticket to the race to the bottom. Field sales was the king of arm waving, which was why we tried to keep them away from the budgets as they’d try to spend their way to success.

        The only time market share became an issue was when the C-suite wanted to beat us over the head with it…. then, when you asked for the funds to achieve market share parity, you were shown the door with the admonishment of “we sell to the plan, not chase market share”…..

        Fun times!

  3. breamrod says:

    I think a lot of people see war on the horizon and say” what the hell I’ll live for today”. The top 20% of Americans seem to be spending like there’s no tomorrow. I’ve never seen so many people at the beach this fathers day weekend. 20$ hamburgers 8$ beers! Yikes!

    • sunny129 says:

      Top 10-20% of Americans are the ONES who have 70%-90% of Wall St wealth since ’09, unlike the bottom 90% who have less than 7%!

      So I am NOT surprised! For them life is a paradise. They thank Mr. Powell and Co, profusely! Even the if the rates to 5% or 6% it matters little to them.

      • Augustus Frost says:

        Those between the 11th and 20th percentiles measured by net worth are middle class but that’s all. If they are also (approximately) in the same range measured by income, depending upon where they live, their household size, and their lifestyle, might be as you describe.

        Most I suspect aren’t, not even close, because they tend to live in higher cost areas where the better jobs are located and their living standards consume most of their income.

        I attribute these spending habits to the mania. An asset crash and a job loss recession can turn the financial circumstances of these people “upside down” rather quickly, as it did in 2008.

        • NickL says:

          And such people that live in the high cost areas chose to have one or more children when they weren’t ready (and they are spending over $3,000 a month to rent a one bedroom apt)

      • ru82 says:

        WSJ said the average wealth of a home owner is 245k compared to 6700 for renters. That seemed hard to believe

        Anyway things are slowing down. They said homes that used to get 20 bids are only seeing 3 to 5.

        They also said the typical monthly house payment with 20% down is $2038 and in 2018 it was $1378. This payment takes up 41% of a families income when in 2018 it was 32%

        • OutWest says:

          It’s always hard to say if home ownership leads to wealth or if wealth leads to homeownership.

    • Djreef says:

      What if cars and trucks didn’t have chips? You know like anything built before 1995.

      • Wolf Richter says:

        Even Fords had Electronic Engine Control (EEC) systems by mid-1980s when I entered the business. And those “black boxes” had chips. The first EEC systems probably date back to the 1970s, I would guess.

        • COWG says:

          The worst news back then from the service department was “ we gotta replace the computer “ …

          Very expensive even then…

          Most people didn’t even realize the car had a computer until receiving that news…

        • VintageVNvet says:

          may bee SO Wolf,,, but my ’84 Chevy 3/4 ton pick up had none…
          IIRC, most of the ”new” concepts such as the ”chips” were introduced into the high dollar vehicles First,,, and then gradually into the lower cost ones.
          Not really too sure about many of the early adopters of ”chips” etc… but that was clearly the case with many other ”new” items back in the days when every ”new” concept was considered a good benefit…

        • DJ says:

          I engineered and built the Ford Electronics (Philco) New Lansdale EEC production lines in the late 1980’s. Second Generation… I miss my 1979 Audi with no computer.

    • Franz Beckenbauer says:

      Ze germans have been through this before.

      It is called “Dancing on the volcano”, based on a quote by composer Alban Berg, who wrote in a letter:

      “”The whole town and all its inhabitants are quite drowned in carnival din, masks and confetti. And on top of that the news of the Reichstag fire.

      Dancing on a volcano.”

      That was in 1933. But of course, history doesn’t repeat.

      Good luck to you folks. May the force be with you.

  4. SoCalBeachDude says:

    Corporate greed and price gouging the root of all inflation

    MAG: Feels Like 1979 Again…

    USA Paying More to Borrow as US Interest Rates Rise…

    Costs to Service US Federal Debt Now Up 30%…

  5. Nunya says:

    Last time I purchased a new car was in October 2018. It was a Honda Accord Hybrid Base. Dealer had 20+ of these models in stock, they were not moving. I was trading in a pick up truck for the Accord. Switched jobs and no longer needed the pick up truck, but would be driving into NYC on a weekly basis and the NY/NJ area provides discounts for tolls when you have a hybrid car. I paid $24K OTD, which was MSRP at the time for the base model. Lots of incentives from the dealer.

    Fast forward to today. We are back in the market since my son will get his license in September. There are three options on the table. Option 1: he doesn’t get a car and uses the two cars at home whenever they are available. Option 2: buy a used car. Used car prices have softened, but not enough for my liking. Option 3: upgrade the wife’s ride and have him drive the “old” car, which would be a 2012 Honda. The problem is every new vehicle we go see has a minimum of $4K dealer addendum, and as high as $8K. This is for SUVs in the $30-40K MSRP range. Zero dealer incentives except for military/recent grad/loyalty in the $500 range. We REFUSE to buy a car until the madness stops.

    I agree with Wolf, people do not have to buy a car. They buy it because they WANT it. Just like people don’t have to buy a $1,200 phone, or $7 Frappuccino, or $500 headphones, or $1,200 sneakers. They buy these things because they want to.

    • Island Teal says:

      Good article. Absolutely agree. People are addicted to “New”. Made plans to take my 03 Audi A6 in for some much needed service in 2 weeks. Have zero interest in a new car. Just need a good independent garage 🤠

      • sellmycar says:

        I just made a contract to buy a Honda Insight with an MSRP of $26,855. The dealership didn’t charge a markup, since “the buyers will remember it” as the GM said. It asked for my purchase of the dealer’s accessories for $2,875. So, the total OTD price is $32,500, including sale tax and license. I put a down payment of $7,000 and a $500 manufacturer rebate on a 2.9% HFS loan to match my monthly gas payment of $540 on my 12-year-old MB.
        The reason I bought a new car in this tough time was just that the outrageous gas price in my local is about $7/gallon, and who knows it will spike to $8-$9 during the summer. My plan to keep this car for 10 years will well negate the extra $2,875 I paid.
        Like many people at my workplace and church, buying a new vehicle is a prohibited thing to do right now unless they have some economic reason behind that.
        Like making an investment decision, do thoughtful math before you jump into the market. Since not all dealerships behave the same, marksup.org is a great place for you to learn about.

    • Josh says:

      The last car we bought was in 2020 before things got really out of hand with the dealers because someone crashed into our car and totaled it. It would be interesting to have a breakdown of who and why people are buying. A quick Google search shows 5 million car accidents a year with property damage (unclear what percentage are totaled). Then there is your situation of people turning 16+ and needing a car to get to school or work or whatever. Then of course are the 10 percenters that made tons of money in stock the last few years where money is no object. For those first 2 groups of people, buying a car is not “discretionary” but I’m not sure what percentage of buyers that represents.

      • Kenn says:

        Pray that your car isn’t involved in a collision. Last year, my 17 year old minivan which was in very good condition was rear ended. Luckily, I was able to keep driving it, because the insurance value for the van was only $2100 if totaled. I was lucky, but I could have easily been forced to purchase something in this crazy market.

      • Depth Charge says:

        I know a younger woman who is now buying a new car and said “I don’t care what they’re charging.” She actually makes good money, but her attitude is apparently to piss it away.

    • Motorcycle Guy says:

      Nunya,

      ” We are back in the market since my son will get his license in September.”

      I will offer this comment for what it’s worth:

      When our children (a girl and a boy one year apart) were in junior high school, I announced to them one evening that they could attend any college or university that they could afford to pay for.
      We lived in a very wealthy suburb of Philadelphia. The kids at our high school routinely were given a brand new Mercedes or BMW upon turning 16. My daughter was very upset to say the least.
      But over the remaining years of junior high and high school they found numerous jobs and saved their money. There are many details I could share but I will close with this comment. After my daughter graduated from a university where she lived on campus – she had been on the “dean’s list” every semester while working three jobs.And she thanked me for making her take responsibility for her education.

  6. w.c.l. says:

    Yes, the dealer profits really are gross.

    • DawnsEarlyLight says:

      I thought they were net? 🤣

      • NickL says:

        No 16 year old needs a new car especially if they live in any big city where insurance rates will be sky high.

        Even families that live on park and 5th avenues in NYC use car services or Uber and get this people not in the top 1% can use the subway or bus.

    • Frank says:

      Why “gross.” Just market conditions. No one has to buy a new vehicle. When lots are full, vehicles are not selling, salespeople being laid off – there is little sympathy for dealers. It’s not gross when dealers have to sell at little to no profit….. Just the other side of the capitalist coin. Supply/demand.

  7. Brant Lee says:

    No doubt Americans love their vehicles and so many will acquire them in any way possible no matter what the cost to the budget. And apparently, fuel prices aren’t too big an issue, it’s pandemic over, hit the road 2022.

    Cars and trucks are such an important part of life, pricing is going to take a good while to thrash out. On top of this, who could come close to predicting what types of vehicles will be on the lots in five years?

    • TimmyOToole says:

      Agree, Vehicles = freedom. For many jobs critical, so they are means to make income, also. What Americans forget is they all do the same thing: move you from A to B. People are WAY overspending on cars and trucks.

    • Carl says:

      Hahaha it’s not that they like to pay for a liability (vehicle) or sky high gas prices but there are no options thanks to the Boomers. Young people don’t care how they get from point A to point B, and will never change their oil themselves. Just not interested in the car culture.

  8. whatever says:

    My kid was graduating and was promised a car for getting a college degree, plus needed it for commuting to new job.

    Three months of hell to just get a basic gas compact SUV, I couldn’t wait it out. Hybrids cannot be had, and the price differential now for a hybrid versus gas is a ten year payout, even at $6 gas, so that was out. Ended up paying $2K above sticker for a gas RAV4 sight unseen and waiting three weeks. That was negotiated from $3k over sticker since I agreed to Toyota financing, which the dealer gets a $500 incentive (I was a cash buyer, so I just paid off the 4% note after 90 days, when they get their payout – handshake deal).

    If you can wait to buy a car, wait. If not, be prepared for a much more unpleasant process than usual.

  9. Confused says:

    My 2004 Honda Accord has only 63,000 miles on the odometer. I’ll drive this car until it drops, I drop, or car dealers drop. Of course, I would like a new car radio, but those apparently require computer chips, too.

    • Ghassan says:

      You drive even less than me. My 6 years old civic has 23k on it. In 18 years it would be 70k miles unless I go on a cross country trip!

    • SoCalBeachDude says:

      There are plenty of very inexpensive car stereos on Amazon.com and we recently put a Boss in a friend’s GMC Sierra truck they take to Palm Springs and it only cost about $124 and has every type of input available and looks great and is double-DIN and sounds exceptional.

    • georgist says:

      you can replace your radio very easily.
      go onto crutchfield, put in your car model / year, they will list radios/speakers that fit (space and interface).
      The hardest part is getting the dash cover off, which itself is only a youtube query away.
      The entire job takes an hour or so, the new radios are way, way better than what you get in a low spec or older car.
      If you do replace the radio know that you won’t get the full benefit if you also have cheap stock speakers.
      Was quite a fun project, surprisingly easy.

      • NickL says:

        No I wouldn’t unless you want to completely mess up the whole system.
        It’s not nearly as plug and play like replacing an older hard drive with an SSD or memory in a laptop. Many cars you can’t because the ECU won’t ‘accept’ it and you may have to goto the dealer that charges $130 an hour to put it in and make sure that it works properly so the car doesn’t completely shut down and stall on the highway

        Buy what ever parts are needed and pay the shop their hourly labor charge

        • georgist says:

          This just isn’t correct at all. Crutchfield sell a tonne of these every year, there are hundreds of reviews of successful installs for hundreds of radios.
          They (and other providers) explicitly recommend models compatible with your car.

        • georgist says:

          > stall on the highway
          all the best with your auto shop by the way!

        • COWG says:

          g is right…

          Many of the head units are indeed plug and play with wire harness adapters to keep steering wheel controls if you have them…

          Most are more capable than a low end unit as well…

          If you’re not comfortable taking your dash apart, find the shop all the kids go to and let them take care of you…

        • drg1234 says:

          Emphasizing how totally wrong this post of NickL is. Crutchfield will sell you everything you need including the wiring adapter. They will walk you through the install over the phone if necessary.

          The ECU has nothing whatsoever to do with the stereo (although that may be changing these days) in a 2004 Accord.

          Seriously, call them up and go over options for your car. I’ve been buying from them for more than 30 years.

        • JJ says:

          NickL,

          During the late 80’s when I turned 16, my Minneapolis grandma let me drive my deceased grandpa’s 1973 battle tank-sized Chrysler New Yorker around the metro area on my own.

          The glorious land yacht only had one problem: A stodgy old AM radio with one speaker.

          My inner teenager solution? Set down a big boombox and a big holder of cassette tapes in the front passenger seat so I could still listen to Jimi Hendrix and Pink Floyd in the giant cruiser, enjoying the Twin City sunsets without damaging or altering the car in any way.

    • JohnnySacks says:

      2008 with 53k for us, but in New England the corrosion will be the death of it. Freaking out a bit at the fear it heads south and we become unwilling shoppers in this exploitive nightmare. Grateful Wolf provides this data along with his future forecasts.

  10. JV in deep south says:

    Our refrigerator quit this week during historic high temps here,
    we replaced it immediately at Home Depot but can’t get delivery
    on it until AUGUST, they’re so backed up with orders.
    Wolf is exactly right-on about this and so are all of you who write
    about it. The few appliance dealers in this area are either sold-out or
    not answering their phones nor calling you back.
    There’s a slight possibility that Amazon might help, I won’t believe it till we have a working refer again.

    • COWG says:

      After reading your post, I checked my local Home Depot in SWFL on line….

      Pulled the most expensive refrigerators in the site…. French door style… water/ice in the door…

      Out of 5, 4 were available for delivery Friday with one July 30….

      All were on sale…

      No problem here…

  11. cas127 says:

    Any sales *volume* data?

    (I scanned the article and did a quick kw search…did not see any).

    Insane price hikes are a bit less troubling if only 50% of typical sales volume is occurring (idiots will always idiot).

    Also…we’re 24+ months into the pandemic and manufacturers haven’t been able to re-engineer a less chip-filled car? Which *all* cars were through perhaps mid 90’s?

    And some manufacturers/models aren’t less chip exposed?

    (How about Indian/etc auto industry – are *all* their models chip heavy/starved)?

    Or chip switchable?

    And nobody ever heard of a %#@$% scooter?

    There was a ginormous scooter boom less than 10 years ago with prices starting at $650. Haven’t heard much about scooter substitution – why not? Do all buyers love being bent over?

    There are a lot of questions and not so many detailed answers, after this strange post 1 million Covid dead/1.5 yr closed economy hyper “boom”.

    • Ted says:

      CAS127: I happen to know that my 89 Corvette had 12 microprocessors.

    • El Katz says:

      Government mandates (for example, backup cameras, vehicle stability control, ABS, airbags, drive by wire, emissions controls, MPG standards and transmission / engine controls) and consumer preference dictate how many chips are required. It has been proven for years that the appetite for basic transportation vehicles is limited. Historically, those are the lowest profit, slowest selling vehicles – the antithesis of what the manufacturers require in the current climate. You also must realize that the testing of a new vehicle is extensive… it can take up to 5 years to suss out a new product and pass all the mandated tests and certifications – and the cost of those certifications is staggering.

      A scooter on today’s roads in the area where I live is a death wish.

      • Augustus Frost says:

        If you are referring to scooters like the ones available for rental (like Bird), those are available near my office.

        City ordinances don’t allow riders to use sidewalks anymore and yes, read about a few deaths as a result.

        Infrastructure wasn’t built to handle cars, pedestrians, and other forms of transportation (scooters, bicycles) especially for the current population density.

        The area near work is one of the most walkable, but it’s concurrently an annoyance when driving. Better now versus before the pandemic.

        • COWG says:

          Had an instructor once who was an avid bicyclist…

          She railed about having the right of way with this, or the right of that, and how people should totally be aware of a bike, yada, yada….

          In conversation, I politely reminded her that, yeah, she may be “right”, just try not to be “ dead” right…

          Down here in the land of cataracts and 20/100, there ain’t no way…

          I did have an idea to make some stickers of mailboxes, trash cans and bikes that people could put on their drivers door, like the fighter pilots do…

        • cas127 says:

          AF,

          Actually I was thinking of the larger scooters (think Chinese knock off Vespas) rather than the Bird flocks. Those Chinese scooters are perfectly adequate for 5 mile commutes and there are probably some after mkt add ons that even allow for limited cargo carriage (groceries).

          Nowhere near the equivalent of a car…but their $650 entry price ain’t $45k either.

          And every college student/part-timing spouse/etc not using a car, applies downward pressure to the price-setting demand curve.

      • VintageVNvet says:

        “It has been proven for years that the appetite for basic transportation vehicles is limited.”
        While this is at least ”probably” true EK, based on the aggregated ”wisdom” from de twa,,,
        IMHO, that is the ONLY source of such nonsense…
        But, even IF true overall,,, that metric would be derived from when times were good and most if not all ”buyers” were going for the $100K+++ pick ups and similarly overpriced other vehicles.
        What is apparently coming to USA,,, is a very very different scenario,,, in which, it will be clear that each and every manufacturer MUST be able to deliver to USA, a very economical vehicle, EV or ICE, similar to what is available all over the globe right now.

    • Wolf Richter says:

      For actual sales volume for June you will have to wait until early July. I will cover it, no doubt. It’s going to look shitty, no doubt. And it’s going to look shitty because there is nothing to sell.

      • Harry Houndstooth says:

        Humans reading this missive may not realize the fortune of your finding this website. In my humble opinion, Wolf Richter has done all of the heavy lifting.

    • Old school says:

      I bought a 50cc Taiwanese scooter and have ridden it about 3500 miles trouble free except the battery. It’s basically a 200 lb. small motor cycle with 2.4 horsepower.

      Gets 100 mpg. No annual inspections. About $10 annual registration. Carries about $60 worth of groceries. Just have to live where it’s safe to go 30 mph. I could ditch my car, but sometimes its nice to have both.

      • cas127 says:

        Thanks, OS, this is exactly what I am talking about.

        Rather than having 330 million people sales whipped into thinking the only legit means of transport is the Unneccesary SUV 3000 (Behemoth Edition – With Complementary Cup Holder) and that the “only fix” for resultant price inflation is never-ending ZIRP (to prop up – barely – hamster wheel “affordability”), maybe the better solution is some intelligent product substitution.

        Or at least an effort at it.

      • Lily Von Schtupp says:

        Just don’t park your scooter on the street, or buy one at all if you don’t have a locked garage to park it. At minimum, install a gps or hide an Air Tag on it.

        My old neighbors (apartment complex with street parking–no garage) had their Vespa stolen twice. Security cam showed an old Econoline drive up, load it in, drove off. It was found about 6 months later 75 miles away and returned, only to get stolen again inside of 2 weeks.

        • Old School says:

          Not that big of a deal. Costs $200 per year where I am at to insure which includes if it’s stolen. Sure I would be out $100 deductible, but it’s worth the piece of mind.

          They all come with the steering lock now, so you can’t roll them off, but two strong guys can lift it into a van or truck.

      • Phil says:

        If you like that, you could consider stepping up to a 150cc… For example an Aprilia Scarabeo. I drove one for a while… Very stable and easy ride, cvt so no worries about a clutch, just twist and go (up to about 70mph… Fully street and highway legal.)

  12. Michael Engel says:

    1) In Mar 2020 dealers parking lots and safe parking lots were full to the rim.
    2) It took over a year to liquidate what they got.
    3) Dealers adjusted their business model from selling what u got to clicking on line. High turnover X high profit margin = perfection
    4) Dealers profit margin exploded : selling small, midsize cars, used cars, vans, high end pickup trucks, along with lean inventory, maintenance and parts.
    5) Winners are sold out.
    6) Losers, low turnover, min required samples.
    7) No inflection point, nothing wrong…

  13. Sams says:

    Different markets, different pricing. I signed for a new car the other week. All bells and whistles, to be delivered in four months to half a year. The only reason to go with a top spec car was a campaign deal. The deal was cheaper than a lower spec car list price.

  14. drifterprof says:

    The only car I ever bought from an American dealer was my beloved 1974 Plymouth Duster 318 V8 (bought with my end-of-service largess after I came home from a 2-year Peace Corps gig in West Africa in 1976).

    My cheapskate philosophy was always: Let other people buy the premium cars. And being a car DIY scavenger has paid off in a life of otherwise modest middle-class means.

    Now I enjoy driving a motor scooter a short way to the traditional local market area here in Thailand to buy food / beer / wine etc. Other required car excursions, my wife drives in her Honda BRV.

    • JohnnySacks says:

      Doesn’t the Thailand market demand and manufacturers produce a larger volume of economical utilitarian vehicles? Other countries definitely have a very different vehicle mix. Went to the Sweden Volvo site and was astounded that you could still buy them with tiny diesels and manual transmissions.

      • VintageVNvet says:

        Many many much more economical vehicles of all sorts and sizes and so forth are totally available many places on the globe, and can certifiably be made much more ”green” and efficient.
        But, NOT in USA because USA has policy of letting anyone who can fog a mirror vote AND drive,,, SO WE, in this case the universal USA WE,
        MUST be protected from our own ignorance and arrogance once again…
        OTOH, from what’s happening right now,,,
        Certainly seems that, ”it won’t be long” until a ton of changes more or less end all of the nanny state BS.

      • drifterprof says:

        JS: The hugely prevalent economical utilitarian vehicles in Thailand are swarms of motorcycles and motor scooters. Not unusual to see a parent, or both parents, along with a child or two on a motor scooter. Grannies and obese people also.

        That’s why I have my wife do almost all the driving. I don’t want to feel guilty the rest of my life for killing or crippling someone.

        btw: “…most Americans, other than pure car enthusiasts, will choose an automatic car. In Europe, it is far more common to learn to drive in a manual-transmission vehicle, and the tradition carries on. Until recently, it was also far easier to buy a manual car in Europe and maintain it so it was considered a no-brainer.”

        • SwissBrit says:

          Agreed – growing up in the UK, automatic cars were in general the preserve of people that had failed their manual driving tests enough times that their instructors had gently suggested taking one complication out of the equation – this of course meant that they could only drive automatics (unless they managed to pass the full test later), and so had to pay higher prices – second hand automatics were hard to find and therefore more expensive as so few of them were ever sold new.
          Anyone with an automatic was laughed at, basically.
          I now drive automatics and have done for some years, but then again I’m lazy and don’t drive for pleasure anyway – my car’s simply a useful item, to me.

  15. Tone says:

    All the more reason rate hikes are not stopping anytime soon…I wouldn’t buy into this false stock rise…money will keep flowing out of the stock markets…possibly the outflow is being used to buy vehicles before rates get out of hand

    Cheers

    • The Real Tony says:

      Stocks should go up until the G7 summit meeting is over then they should fall. The June CPI print has to be a negative for stocks. Stocks always seem to go up before a major holiday in America. July 4th.

  16. Ron says:

    You would think people would be driving more carefully these days given the cost of replacing cars that are so easily “totaled”.

    • Bob says:

      The typical income for 2022 according to the government is $52,000 per year. A new vehicle would cost approximately 88% of a years income.
      More people will figure out they don’t need a new car.

      • Augustus Frost says:

        Median household income should be slightly above $70,000 now. It was about $67,000 per FRED a few years ago.

        Given today’s living costs, I’d describe most households of two or more anywhere near this level as “working class” or “working poor”. It’s decidedly not “middle class” when combined with anything near the median net worth.

  17. Chris says:

    Units sold down while average price up. Sounds like those w money and good credit (top 20%) still buying while bottom 80% are stepping back. Makes sense.

    Just saw a tv ad for full-size GM trucks at 1.9% dealer financing. Fits the times. Hi gas so the big trucks aren’t moving like they were.

    To be honest, I’m tempted to jump in and swap the wife’s Telluride for a Yukon. Got the income and credit score for dirt cheap dealer financing.

    Hi gas never lasts. As they say, the cure for high prices is high prices.

  18. LibDis says:

    Cars are funny thing, and I believe this has to do with shifting demographics and priorities.

    I live in completely Hispanic dominated area of Tampa. 3 bed 2 bath working class type neighborhood (with also insane housing prices atm).

    When I go for my daily walk I am always amazed that in front of a modest house there are often 4 to 6 cars jammed in. They cover every inch of dirt with pavers or concrete to create more parking. Home sharing and multiple rentals on one property are rampant. Many put sheds, trailers etc in the yard and rent them.

    These cars combined are valued multiple times more than the property they are parked in front. It has to be a cultural shift.

    When I was a kid growing up in a more affluent area in Chicago, much more affluent really, most people drove used cars, bought used cars or bought more modest new cars. A new Cadillac in the neighborhood was the talk of the neighbors.

    Maintenance or improvement on the home today is less of a priority than having a new luxury SUV in the drive or a jacked up 60k F150. That is a complete flip from 50 years ago.

    Expensive new cars were for most, an unnecessary luxury even though most could easily afford them.

    In this new culture I am now immersed cars are a necessary status symbol, needed at any cost, although most do not seem to be in a position to afford them.

    A total cultural paradigm shift has occurred, aided by longer and longer financing options likely also.

    Looking at population statistics would at least support the demographic shift. That, in all reality, is shifting the reality of purchases across the whole consumer spectrum.

    • NickL says:

      It is the same here in Queens NYC. By the way how do 6 people share a 3 bedroom house or in some cases 2 or 3 unrelated people crammed into a one bedroom but of course everyone owns at least one car when you have subway and bus service.
      I live in a rent regulated 2 bedroom apt alone and have a six year old Honda Civic
      And no 16 year old needs a new car as I saw above. They can use the subway or bus like millions still do..i assume mommy and daddy are paying for insurance and $5.00 gas as is “so common” now

      Not to mention that this demographic loves to double park, considers the street an extension of their driveway, loves to party and make noise.

    • All Good Here Mate says:

      Lots of Florida is like that now.

      That stated, you’ll see the same thing in Palatka, Alachua and other little places too. Difference being they are modded out trucks parked in front of trailers.

      • VintageVNvet says:

        Lots of FL and the rest of the SE has been like that for many years to my certain experience matey!
        Remember well, driving through the countryside as far back as the 1950s and since, seeing new pick up trucks and a TV antenna on run down housing/trailers, etc.
        And for the top of the line pick ups, saw a new one last week in a dealer showroom,,, marked sold but still had the sticker — $$$115,000.00

      • COWG says:

        “ That stated, you’ll see the same thing in Palatka, Alachua and other little places too”

        All the interior little towns between Jax and Orlando have been “discovered” now…

    • Augustus Frost says:

      “These cars combined are valued multiple times more than the property they are parked in front. It has to be a cultural shift.”

      Totally a cultural shift.

      It also explains why the majority of people fitting this profile will never have any meaningful net worth, certainly not when the asset mania collapses.

      Per FRED “real” median net worth was something like $120K or $130K a few years ago. Presumably somewhat higher now due to the housing bubble.

      Still, if a household owns two cars collectively worth $60K, $80K or even $40K, under normal market conditions (prior to the insane pandemic distortions), it should be evident that it’s impossible to build meaningful wealth when an “asset” representing such a large percentage of someone’s net worth is constantly depreciating.

      • VintageVNvet says:

        Just one reason to sell the 2019 $$$ pick up truck and buy two older ”collector’s item” vehicles in it’s place, vehicles whose $ price low point is behind them and which actually become worth more over time,,,
        ( As one example, my first car cost me $600.00, and is now available for $60,000.00, but ya better hurry, LOL)
        As suggested above, better to have a ”back up” in place in case one of the poor drivers drives into you.
        And as also above, the electronics, chips, etc., on the newer vehicles mean months in the shop if anything does go wrong,,, which of course it won’t, ever,, eh

    • Tony22 says:

      “These cars combined are valued multiple times more than the property they are parked in front. It has to be a cultural shift.”

      You can drive a used car to Mexico. You can’t do that with a house. Tens of thousands of older, simple reliable used cars have gone south. A tax is collected by the Mexican government.

    • Young Buck says:

      Its pretty funny, some Californians moved into a rental 4 bed 2 bath house down the street. They actually have 12 people and 5 dogs living in this 1800 sq ft house. Yet they all drive teslas or newer tahoes and suburbans. I dont get it.

      • VintageVNvet says:

        lots of folks been doing similar where and when ever they could ”get away with it” for eva YB
        the money you save sleeping 4 or more to a bedroom, -double bunkbeds, — etc., is what allows you to buy the ”whatever” — hot rod — mostly status symbols of the group you are in or aspire to, eh
        OTOH, some of us who don’t need any glitz or cool are completely comfortable with old cheaper vehicles and our privacy or something similar to what used to be privacy now that big brother and the nanny state records EVERYHING we do, say, write, hint at, etc., in any public venue

  19. Ed C says:

    I’m hoping my 2017 RAV4 out-lives me. I’m 72.

    • ft says:

      I’m hoping my 2022 X3M does not out-live me. I’m 74

      • SoCalBeachDude says:

        2022 BMW X3 M Review, Pricing, and Specs

        The updated 2022 BMW X3 M is a ridiculously quick, unexpectedly athletic, and wholly entertaining compact luxury crossover with a few compromises.

      • rick m says:

        Both my dad and I own 2007 Ford E-250 work vans, he’s got the longer wheelbase and bigger V-8. He’s 90, I’m 65. He’s gonna outlive me in all likelihood, unless his girlfriend wears him out. But I like the 4.6L in my van for longevity over that 5.4L. We both agree that having plenty of American steel around you is real insurance when a phone-starer nails you. Inattentive drivers and bad roads make motorcycles a no for me. I expect that laying a bike down now would hurt much more than the last time. And I just like having a couple of hundred pounds of tools and materials with me everywhere I go. be prepared.
        My mom is 91, drives her ’17 Accord locally to the doctor’s and such.

        • Cookdoggie says:

          My Tacoma was once rear ended by an aluminum can car. I had a steel bike rack on the back. My damage was a bent flange on the rack that I just bent back. The car was undriveable. That rack stays on year round now.

    • Better to hope you are buying a new 2052 some day….

      And get a couple decades out of it.

      And while I am on the subject:

      Never have a bucket list. After you finish it you have to die….

      😆

  20. Michael Engel says:

    1) Payroll, pensions, disabilities, veterans health, housing…chew up over 90% of DOD budget.. little left for procurement of assets. Foreign countries, our friends, that depend on us, finance our industrial might.
    2) If a self driving military vehicle get a bullet in the head, no harm is done.
    3) If a self driving car get a left hook in Walmart, AI is blind.
    4) We are wasting money on silicon valley executives, software engineers, foreign countries R&D, doing nothing for soccer moms and shoppers….
    5) Rookie software engineers, out of college, demand higher compensations than their bosses, jolting JOLTS.

    • georgist says:

      Regarding software devs. Attrition is so high (work for a huge US company) that I even had news of someone quitting come to me during a screen share with higher ups.

      This person had very little experience, wasn’t really a strong developer, had a good work ethic and potential, but nothing you can bank yet.

      The dev went to a FANG and got paid more than myself and another dev lead, who have between us 25 years and direct all the projects and the tech side and much of the business domain.

      I’m underpaid, but the new salaries are just out the park.

      Well, back to interview prep work…

      • NickL says:

        But if you are over age 45 and a Caucasian male and not working or maybe took some time off from working (which you think hiring managers would understand due to COVID but shouldn’t have to explain like you are on the witness stand in court) you are screwed while 20 & 30 something hipsters and those that look like Mitt Romney’s kids (when he was running in 2012) are getting hiring in droves because as you say they have a ‘good work ethic’ and more importantly they have the 3 W’s which you need to get ahead now (wealthy, WASPY and white) so they are just hired based on nice interview and social skills

        • Tony22 says:

          I’m not a white male, but I am older. I refuse to spend money in places that have nothing but young faces working there, or that don’t speak English well enough to function meaning exploited.

          There are plenty of older people who want and many cases must work to survive. By the way, our entire extended family of 14 people have changed our registration to all GOP.

        • VintageVNvet says:

          nonsense 5cents:
          Last two ”jobs” I had I was in my 70s, and was hired both times because they thought my skills and references were appropriate for the work…
          Had been working, self employed, at a different position entirely, though related, for 6.5 years before the penultimate position…
          Though I am not about to suggest ”ageism” is not abundant, it certainly was and is a problem for both workers and employers,,, but equally certainly, many companies still hire based on merit.

      • JD says:

        If you can’t beat ‘em, join ‘em. I’m jumping ship this month for a 40% raise myself. Once in a lifetime opportunity to reset my total comp package.

        • georgist says:

          yes agreed I’m going to do the same, going to try and get a promotion to boot

        • Brock says:

          Just be careful jumping ship… when the recession hits, the last hired are typically the first fired

        • Nathan Dumbrowski says:

          Good work. Yes there are some solid jobs still out there. I have done all the job hoping I and hope this last one is a retirement worthy gig. It pays great, total compensation (multiple bonus, tuition assistance) and training included.

        • georgist says:

          Noted on the recession FIFO remark.

          I think there is such a dearth of qualified candidates that if you fill say a team lead position they can’t easily bin you, if the team function itself is critical to the business. I’d also consider adding some clause on redundancy payout.

  21. SoCalBeachDude says:

    The People’s Republic of China is now by far the largest vehicle producer in the world and the largest car market in the world, and there would be a vast excess of cars in the US if we simply opened the US car market to any and all producers from China. Some great cars are made there including Citroen models that are only made there such as the C6.

  22. SoCalBeachDude says:

    BMW has a really nice new color, Tanzanite Blue, available for 2022 and we recently saw a beautiful new 2022 740i in that color and its sticker was only $98,000 or so which is one of the lower sticker prices I’ve seen in recent memory on a new 7 Series.

    • Wolf Richter says:

      Hahaha, thanks for reminding me why I stopped buying BMWs, after I bought two new 5-series, and I loved both of them. I sold the last one in 2005. When I shopped for cars at the time, BMWs were already ridiculously expensive for what you got. They’re just not worth it, imho. Seems like that problem has gotten a lot worse, from your comment.

      • Rollingstone says:

        I thought I liked BMW until I started serving my nearly new 5series at a dealership. The service costs were so high it put me off BMW for life. Never again.

        • COWG says:

          The success of owning a BMW depends a lot on how deep you get into taking care of it…

          Once it’s out of warranty, you have to find a good BMW mechanic, not a mechanic who works on BMWs…

          There is a difference…

          Or learn to work on it yourself…

          Most of the problems of older BMWs are very well known and the online forums are excellent… I find working on mine fairly easy…

          The secret is not to go cheap on fluids and OEM parts are easily obtainable and reasonable…

          With the above said, I got my current 06 750i for $3500 a few years ago with 105k on the meter…

          This car sold new for $86k…

          I’ve put $4k in it to bring it up to snuff…

          120k on the meter now and I’d take it anywhere…

          It’s a great car…

      • Dan Romig says:

        Mine is a wolf in sheep’s clothing (pun intended). Having a car that blends in, but is a true racing machine (2016 M4 manual transmission) is kind of nice. I bought it 26 months ago as a 19k mile lease-back, which had never seen winter road salt.

        Driving it is a joy. I plan on keeping it for a long time. Any car that would be a reasonably higher performance machine, would probably begin at around $100k — used.

        My cost was $40k. It’s now worth close to $50k.

        There is a new McLaren GT LUXE in Chicago that would be a great step up, and a few used ones too. The used ones start at just under $200k.

        COWG is spot on. My neighbor two houses down is a Tech. (mechanic) at the Penske dealership where I bought it. He drives a modified 2010 135i coupe.

        And I do take good care of my machines….

  23. Publius says:

    How long can the manufacturers support their current workforces at this low level of production? Profit is higher, but the big chunk being siphoned by the dealers doesn’t help GM pay the employees sitting on their hands.

    • Flea says:

      Check there debt enormous

      • cas127 says:

        Everybody should Google “Zombie Companies” (basically publicly traded corporations that are barely breaking even/covering debt service).

        The small rate hikes to date have an excellent chance of pushing them into bankruptcy and various academic studies have found many, many hundreds of them.

        I won’t speak to GM, but a significant purpose of ZIRP was to keep the zombies alive.

        • Anthony says:

          I forget the numbers of Zombie companies in the S&P 500…something like 40%??

          Anyway the number that did stand out was California with 59%

          Even if I’m out with the numbers, it would be interesting to see the number of workers working for these companies and the total amount to be lost, if or when they all go bust…

    • SoCalBeachDude says:

      In the early 1970s the ‘workforce’ of GM was more than 750,000. Now it is less than 125,000 and is headed to far below that – all as a result of the vehicles that GM has put out over the past 50 years.

      • Wolf Richter says:

        SoCalBeachDude,

        No, but as a result of automation in the US and of offshoring production to Mexico and other countries.

        • cas127 says:

          Well, I think it is a combination.

          I don’t think a lot of people would really champion Chrysler quality/reliability over the last 30 to 50 years (they had periods of improvement…but longer periods of decline).

      • Steve says:

        Agree. When I take apart the parts on the older bodies it’s just Mickey mouse. They purposely designed parts to break removing them and cheap design.

  24. SpencerG says:

    The dealers may be making a fortune in this market… it is all variable costs to them… they pay for the cars and the labor only if they sell. Their only fixed costs are the parking lot and the electric bill.

    But I have a hard time believing that FORD, GM, and the rest of the manufacturers are happy with selling fewer and fewer cars. The fixed costs of those factories require a certain level of production across them that can’t be made up by simply eliminating sales incentives.

    • Educated but Poor Millennial says:

      Wolf,
      Think the same way, something is fishy and looks like a made up story. Seems like a short was there at that time but now its hard to believe the old story. What is behind this shortage. I feel a kind of jaw bowing is going on behind the curtain , to not produce. I dont know but just feels fishy

      • Flea says:

        China buying them all ,they hoarded copper,food who knows what else. This is your inflation problem ,that forked tounge politicians,say are supply chain issues,Bullshit

      • Wolf Richter says:

        Educated but Poor Millennial,

        “I dont know but just feels fishy”

        I get very exasperated when people are abusing my site to spread lies and BS. People who say the semiconductor shortages aren’t real — and who therefore willingly ignore all the facts, data, and reports about it — have something “fishy” going on in their brains. That’s for sure.

        I normally delete this type of garbage by now because I’m just too exasperated by it.

        IT’S THE SINGLE BIGGEST PROBLEM THE AUTO INDUSTRY HAS, AND EVERYONE IN THE INDUSTRY IS STRUGGLING WITH IT.

    • Augustus Frost says:

      US automakers are on a path either to irrelevancy or out of existence.

      Not sure what GM’s US share is now but last I checked, think it was about 20%. Back in their heyday, it was over 50%. More recently, Ford’s revenues are larger than GM’s. Can’t remember when it first happened but GM used to be a much bigger company. Of course, Ford didn’t have as many name brands which they eliminated and didn’t file for bankruptcy in 2008 either.

      • SpencerG says:

        US automakers can’t compete on small cars. So for the past decade or so they have only wanted to build giant SUVs, crossovers, and pickups. Interestingly electric vehicles may get them back in the Market Share game

      • Wolf Richter says:

        Augustus Frost,

        Now wait a minute. You’re mixing up unit sales in the US with global revenues.

        Toyota has now beaten GM in unit sales (number of vehicles delivered to final customers) in the US, and Ford managed to do that a couple of times. All manufacturers suffer from the chip shortages and cannot build what they want to build. So being able to build it now is determining sales. Toyota just cut production plans again due to shortages, while Toyota dealers are essentially out of product.

        GM sells more vehicles in China than it does in the US, and its global revenues are far higher than Ford’s global revenues (revenues are measured in dollars).

        Toyota and Volkswagen have been for many years the top two global automakers in terms of unit sales (number of vehicles delivered).

        • COWG says:

          “ Toyota just cut production plans again due to shortages, while Toyota dealers are essentially out of product.”

          Precisely why I brought forward an end of year planned purchase to April…

          Availability, price increases, addendums to sticker, etc…

          I guess I figured the devil I know today vs the unknown devil later…

    • Wolf Richter says:

      SpencerG,

      No one in the industry is “happy” with selling this small number of vehicles. Everyone hates it. But everyone is happy with the gross profits they’re making on each vehicle that they DO sell. These shortages are driving everyone nuts, and dealers and automakers are simply trying to move forward DESPITE the shortages, and consumes are playing along.

  25. georgist says:

    Upgraded my car this weekend.

    I added a fuse tap and a wire to my satnav, which normally plugs into the cigarette lighter/charger. About $20, all in.

    Upgraded the radio and speakers the other week.

    Livin’ the dream. I will wait for prices to fall, unless it dies on me.

  26. Ken says:

    During the high gas prices in 2010 I was shopping for a Ford Fusion Hybrid since my wife’s car was rear ended (still drivable but needed other repairs). Local dealer added the market adjustment to the MSRP so I just walked away and kept her car. Gas prices dropped and I was able to pick up a 2010 Fusion Hybrid at less than MSRP. Still have it.

    • DawnsEarlyLight says:

      I feel like I read your comment through some time dilation lens effect. Thank you for the message in a bottle.

  27. Michael Engel says:

    1) India sacrificed soldiers in WWI and WWII. India produced
    stuff for the British Empire war machine, piling cash/gold in London banks.
    2) According to the law the colonies could spend their money only in the Empire.
    3) In 1945 US treasury changed the rules : the colonies could spend it anywhere. Within 1,000 days the British Empire collapsed.
    4) In the 1940’s/ early 50’s US dominated 90% of the global GDP.
    5) India refused to become a US colony.
    6) Nixon opened China. China expanded their Monroe and silk road doctrine to Gwadar Pakistan, Sri Lanka, Djibuti… surround India from the Himalaya, Afghanistan and Kashmir.
    7) US dollar is strong, because: Japan, S.Korea, Taiwan, Australia, India, Poland, Lita, Germany, England, Sweden… need us more than
    ever…

    • SwissBrit says:

      India didn’t refuse to become a US colony; it can’t have done, because the offer was never made…
      Whether or not they’d have wanted to should the (highly unlikely) offer have been made, is a different question entirely.

    • Nebukadnezar says:

      3.) Can you recommend a book on that ?

      Most history books follow the red lines of important personalities, movements, new weapons, emotions, etc. but very few authors know math/science/book keeping.

      • THRILLHOU says:

        @Nebukadnezar That’s a very interesting idea. Scholarship tends to be narrowly focused, and arguably intensely parochial. Your idea would in effect be a new type of scholarship, a new “lens”. In my opinion, math/science/accounting are the drivers of all history, but their study is tangential to, like you noted, personalities/weapons/emotions. There is a lot of cool possibility in a field of scholarship rooted in history as viewed through the lens of math/science/accounting. Plus, we really need it. Current economic theory is based on hopium and buying a hamburger now that we will pay for on tuesday. It’s dogshit

  28. Horace says:

    Great overview, Wolf..

    Lady I know took VW SUV for sensor (chip) failure) and at the payment desk informed her that vehicle had an added problem, a defective “clockspring” which is essential for several functions like horn, airbags, steering wheel buttons. She was Strongly advised to park it and keep it off the street, but offered no other information or assistance.

    Came to find out about 7,000 other people are waiting for this part, some for 6 months. Unable to drive vehicles safely, thousands of otherwise useful vehicles are parked at dealer lots or driveways gathering dust. Rumor is clockspring factory is located in Ukraine.

    At first VW denied to help for this part covered under their extended warranty. Lady screamed loudly and persistently up the VW food chain until they gave her a 2022 Japanese rental with 3000 miles and 40 mpg while she waited for part. Going on month 2 with no ETA for repairs.

    Lady starting to like the free loaner. VW has to deal with this profit killing supply chain shortfall, everyone involved an unwilling victim. YMMV

    Offered for ancedotal perspective of 2022 auto industry. Cheers!

  29. Seneca’s Cliff says:

    We are in what I call “ the time travel economy.” When it comes to inflation and gas prices we are back in the 1970’s. And when it comes to automobiles we are quickly moving toward the early 1900’s where automobiles were just playthings for the rich.

    • SoCalBeachDude says:

      Automobiles were always intended to be playthings for the rich from the time they were created in 1886 up until 1908 when some dolt named Henry Ford started making garbage vehicles for the poor which was the start of the ruin of the fine automobile industry which only now is fully returning to where it should have been all along.

      • Wolf Richter says:

        SoCalBeachDude,

        You’re really funny. Thanks for the laugh.

      • DawnsEarlyLight says:

        You should check your O2 level. Spend more time to relax on the beach.

      • SwissBrit says:

        SoCalBeachDude,

        I know that you’re joking, but on a side note I used to work in the air travel industry here in Europe and I had more than one old-timer colleague who seriously felt that way about easyjet and the budget airlines that followed them – they couldn’t forgive them for ruining the exclusivity of the industry and opening air travel up to the masses.
        Crazy.

      • Steve says:

        When I take apart Ford truck bodies, everything is solid and designed well, better than GM.

    • NBay says:

      Kinda like we moved past “trickle down” and into “horse and sparrow”?

      • Old Ghost says:

        NBAY. That was what the Trump/Biden stimmies were all about. But at least a small portion of it passed through the hands of the little guys.

        I wonder what they will do next to bail out all the zombies?

        Or as Will Rogers put it:

        “The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands. They saved the big banks, but the little ones went up the flue.”

    • Old school says:

      Saw a long term chart of real interest rates last night. It’s apparent the economy is so weak that it can’t handle real interest rates for last 20 years. Long term trend is not our friend as it is worse.

      Also one year forward interest rates are forecasting a flat yield curve at just over 3%. We will see if market is about right.

    • Dan Romig says:

      Fast car? Oh yeah, I got one.

      Fast motorbike? Oh yeah, I got one.

      But the bicycle is where it’s at now, man.

      You see, you must have a sleek & aerodynamic carbon-fibre frame made with “”Countervail” Vibration Cancelling Composite Technology.” All cables must be run internally from the brake levers through the handlebars and down the stem into the frame to provide minimal aerodynamic drag. It has to have a carbon-fibre, teardrop shaped center-section, handlebar. The seat post must also be carbon and teardrop shaped to fit down into the seat tube; which, of course, is teardrop shaped. It has to have made in Roseville, Minnesota (where I am from as a kid), deep-dish carbon-fibre wheels with disc brakes — that stop you on a dime from high speed. And, it needs to have 12 gears on the rear cassette that are wirelessly shifted via a Bluetooth signal, to flawlessly control, in an instant, the electrically powered derailleurs; which run on Lithium-ion batteries.

      Plaything for the rich? Oh yeah, I got one.

      “Life is good in Minneapolis.” -DanBob

  30. Tone says:

    I wonder how many sales are insurance related.
    Here in Toronto, a friend of mine that’s in Auto sales indicates that a large percentage of his sales are from high end vehicles being stolen…most likely put into containers and shipped overseas.

    • RockHard says:

      That would be interesting to hear. Word on the street in my area is the Hyundais are getting taken constantly. Apparently the keyless start system is easy to break. Opposite end of the market. Between theft and accidents, you have to wonder about those contributions to sales.

      One weird thing I’ve noticed lately is a number of cars going around with major damage, like they were in an accident, it’s still drivable, but they can’t afford to repair or replace. Feels like I see way more of that in the last year.

      • Pilot Doc says:

        My son is a police officer. They look for unrepaired new cars. No insurance every time.

      • Old school says:

        Everyone looks at cars differently. My friend bought a bmw from a lady. The lady bought BMWs every four years because they had a four year warranty and maintenance program and she liked that security.

        I view cars as disposable. If you drive a $5000 car that’s the potential loss you can have. If you have a big problem with it, you can sell it for $500 bucks and start over.

        • Dave Kunkel says:

          Sounds like the old dirt track claiming races they used to have in the Midwest. Anyone could claim the winning car for $1000.

  31. DanS86 says:

    Just wait for the massive REPOs. Get an almost new car for 40% off.

    • cas127 says:

      It would be nice to get an Explainer post about the operations/dynamics of the auto repo mkt (from initial doomed sale to inevitable resale).

      • Wolf Richter says:

        The repo market is a finely tuned machine. Used vehicles in general are very liquid, unlike houses, and they can be sold at wholesale auctions everywhere, and dealers are buying them.

        Auto-loan defaults are still near their historic lows during the pandemic. They’ve come up a little, but are still minuscule.

        • cas127 says:

          So long as payroll employment grows, I imagine defaults will stay low (although soaring prices don’t help sustainable affordability).

          But when the worm turns (zombie companies have to *try* and roll over junk debt at 10% instead of 4%) and payrolls shrink (fast) then the defaults will rise (fast).

          I think in various sectors during the 2008 implosion, defaults may have tripled within 12 to 18 months…and got worse from there.

          And the 2008 unZIRP was much more gradual than this one.

  32. Michael Engel says:

    We are moving to higher cost/ higher spec/ higher profit margin cars.
    Schumpeter, most efficient/ inexpensive car co, will destroy
    Detroit fat cows.

  33. polecat says:

    “GO CREDIT !!!!!!!!

    HA Ha ha ha ha-ha ha Ha!!

    Just wait tell these newly vintinted vehicular ‘owners’ realize that the monthly nut needed to p • a • y the loan ain’t workin out as intended***??

    So …. either they #1.) Jingle-fob their entry units .. or .. #2.) forsake EVERYTHING just to show who’s Dog! in the neighborhood .. ORRR.. DooR #3 …….no gasolino .. No Diesel fuel .. no e-juice (or enough anyway ..), leaves only one other alternative #4) . .the chipping of ‘Flintstone* wheelage’ + Those ancient of treads – the TIRE TREADED sandal.

    *** those of wealth who think themselves immune to the peasants rather, might find there ‘ride’ lassoed’ into compliance of a different kind.
    __________________________________________________________________________

    *Garranteed NOT • To • Catch • !FIRE! – one hopes.

    • heyjagoff says:

      What the Dickens is this drivel? Do I have to read backwards?

    • Old School says:

      Fed can’t do much to stop food inflation, but they can kill housing and new car market with interest rates and those markets should be dead by end of year.

      Plus we are getting to the real tightening now where it’s 3/4% per meeting plus QT which nobody knows exactly how much that affects financial markets.

      I don’t think Fed can ever say we are headed into recession as that would be self fulfilling, but if you interpret Powell’s language I think he knows that is where we are going.

      • Cookdoggie says:

        I read an article today where the NY Fed actually published GDP predictions showing negatives for 2022 and 2023. I was shocked. So, yeah, they know.

  34. Ed says:

    The supply of semiconductors is not one big pool like oil or cotton or wheat.

    Company A makes their chips at TSMC. Company B makes their chips at UMC or Intel or Global Foundries. Worse, remember that TSMC produces chips at 5 nm, 7 nm, 12 nm, 20 nm, 28 nm, 45 nm, 55 nm, etc. etc. They have new fabs being built at 3 nm and I suspect they still have some old fabs building legacy chips well above 55 nm.

    It is *hard* and *expensive* to move a product between processes even within a single fabrication company.

  35. Ed says:

    The author mentioned it, but it deserves to be underlined that the high prices have a lot to do with mix.

    Given the supply constraints, many manufacturers and dealers want to sell the expensive, high margin cars. Given the high prices, many low end buyers have decided to buy used for now. High end buyers have no such worries, by and large.

  36. jm says:

    Yesterday somehow arrived through a chain of twitter posts at a YouTube video by one “Lucky Lopez” titled “Used Car Market Popped (Update)” saying that (at least in Las Vegas and other markets he knew) the inventory on the car auction lots has begun to explode, and includes a lot of cars repo’d after just a few payments, many of them luxury models.

    @Wolf: What’s your view? Is this so nationwide?

    Also just read an article on thehill.com titled “American’s views of economy, finances Worsens: poll” referencing a CBS news poll in which I find the following:

    “One-third of respondents said they were very concerned about their ability to afford basic goods and services while 32 percent said they were somewhat concerned. Seventy-three percent expressed at least some concern for their ability to save money.”

    and

    “Sixty-two percent of respondents said the price of gas has had a lot of impact on them personally.”

    —–
    Are we seeing in these new vehicle pricings perhaps a reflection of splurging by that fraction of the people who are still doing well — perhaps having a lot of cash in their brokerage accounts from having gotten out of the market while still having large profits from stocks bought early in the bubble run-up, or feeling flush from the huge run-up in home prices?

    And what might we see in the repo rate for these high-priced vehicles?

    • Seneca’s Cliff says:

      I passed a new Benz dealership this afternoon and right out in front with the high end used cars was a row of 6 late model Tesla’s. Make of that what you will.

      • Wolf Richter says:

        Seneca’s Cliff,

        Used Teslas are hot sellers and allow dealers to make big profits. Dealers can buy them at the auction where they buy lots of their used vehicle inventory. At the Manheim auctions alone, dealers buy about 8 million used vehicles a year. Used vehicle wholesale is a huge business, and I report on it regularly.

        • Richard Greene says:

          I was about to give my 2005 Toyota Camry to a charity in May. 210,000 miles. Dead battery. Even if you jump started it, it would stall a few seconds later. And I couldn’t find the title. Not an easy used car to sell.

          My wife decided to call a Toyota dealer. They’d pay $1000 without even seeing the car. A salesman from that dealer called back immediately to say he’d pay $1100, and he did that day. Came over to the house with a “portable battery” and $1100 cash. Told us later he stalled six times on the way home and had to restart with his “portable battery”. But he was still happy about the deal.

      • james wordsworth says:

        There is a business in lining up to buy a new Tesla (several months), taking delivery and then selling to someone who wants one right away … at a $10K premium. A number of dealers have this as a side line.

    • Wolf Richter says:

      jm,

      I don’t know why it’s my job to discuss what every yokel on YouTube says. But here we go.

      Dealers don’t end up with repos unless they buy them at the auction for dear money (very dear money, these days).

      Used vehicle inventory in millions of vehicles at the beginning of June — and it’s not “exploding,” obviously:

    • Old School says:

      Saw a good chart where durable goods are still way above trend since Pandemic crash. But durable goods purchases are durable and so they were pulled forward and you can expect durable goods to fall below trend in the near future.

      Economy is still all scrambled up, but markets usually will heal on their own over a few years. Additional sovereign debt will be a drag on economy going forward.

      • VintageVNvet says:

        good one OS: ”Economy is still all scrambled up,”
        SO clearly,,, but you seem to be the first to call it…
        Thanks for this and your many good comments…

    • Steve says:

      The bottom 70-80% are flat broke now, have no money, and can’t get financing for their level of cheap vehicles. The top 30% are still swimming in asset gains and living good. But it’s mostly paper wealth so that can change. Layoffs are accelerating.

  37. Uber Driver says:

    I see many signs of recession in my area. In the last four months many businesses have just closed down without notice. Strangely the closures are more in the wealthy areas.

    I think we’re in recession and the Fed is not coming to the rescue.

  38. tom20 says:

    Interesting read & comments.
    I cant speak for personal use, but on the commercial side…..that clock is running out. We do not own 10yr vehicle with 15K on it, and a shiny hitch that has never pulled anything. The pent up demand has got to be significant. Every contractor I work with has been playing the same waiting game as my business.

    I did let my Amish neighbors know that Amazon may be recruiting them for deliveries.

  39. wakarimasen says:

    They buy at what costs soever because they believe when the next crisis hits the next helicoptermoney will come – so buy better now, after the second wave of helicoptermoney things getting even more expansive.

  40. Steve Sovring says:

    As a used truck dealer 20 years, with the lowest prices on high demand low mi units 2003 – 2013 in the $8-$12k range, people have stopped buying completely. Nobody is calling. For months now it’s gone dead and I am losing a lot of money. People are refusing to pay the new prices, and they have no money. This economy has collapsed it appears, in this segment anyway. I have seen many dealers with the same ad going on over a year now. Still holding the pandemic prices. 08 09 10 was not even this slow. And this crash barely started. A few more months and many like me will be kaput.

    • tom15 says:

      Are you selling 1/2 tons & heavy duty?

      I hear ya on the slow down.
      Manufacturer in my town took down all their job postings.
      That did not happen even in 08/09.

      The number guys will be behind the curve for this sh*t show as usual.

    • JJ says:

      Steve Sovring,

      Sorry to read about how tough it has been moving inventory. If you don’t mind, can you share where you’re located, roughly? Urban or rural area? If you don’t want to be specific to protect your location privacy, I understand this…but I was curious as to whether the slowdown is a regional issue or not.

      • Steve says:

        I live in So Cal where there are millions and millions of drivers. I advertise on Autotrader only. I have full size but I am a Ranger specialist and people are even having a hard time now with these they always sell quickly. I have the lowest prices on everything and high demand trucks with low miles. People have just stopped buying. Period. The psychology is deathly fearful. All my shops are now getting the same. The pandemic,
        no more stimulus, inflation, war fears, layoff slowdown fears have spooked the market to death. Plus most people bought forward for years with all the free money. Demand is about zero now. Not in twenty years was it like this. The bottom 70% my buyer segment is week to week now barely surviving. When housing blows which looks likely as renters default, the whole mess then collapses. This is the first year I’ve lost money doing this, and it’s been a lot.

        • JJ says:

          Ouch Steve, but thanks for letting me know how it’s going in SoCal. I’ve often considered LA area to be an important bellwether for the rest of the country, so the news you’re sharing is dire for the rest of us, to say the least.

          I hope you find a way to hunker down and successfully pull through this long, lean period in the meantime.

        • Gruesome Newsom says:

          Anecdotal but my observation through watching the diesel truck market here in NorCal through CL is that sales have slowed tremendously. Maybe it’s the sky high prices people are asking, expensive fuel cost or lack of financing options? A dealer that advertises regularly on CL with good 3/4, 1 ton diesel truck inventory has now had the same truck inventory for the past month and just lowered prices (a little). Up until the spring time these truck were selling at this dealer in a week if not days.

          Also, check the truck websites for Ram, Ford, GMC, Chevy. All have special financing now down to 0% APR offers. This was unheard of just a few months ago.

          Tide has shifted. I’m watching and hope to pull the trigger in a year or so on something new to me

    • Flea says:

      I’m looking let me know on web

  41. Richard Hill says:

    Hi Wolf, Love your work. A story about your priorities. Food vs autonomy. About 3 crises ago I was filling up. Oil prices were skyrocketing. I said to the pump jockey “I guess they will be driving less now”. He said “No, they will let their children starve before they give up their cars…”

    • Flea says:

      Wolf how about a article on Russian default,my opinion this could become global. Then Russia taxes the fall ,when the global bond market evaporates

    • Wolf Richter says:

      But they DID give up on cars, and auto sales collapsed in 2008-2009, and GM and Chrysler and a whole bunch of component makers when bankrupt. People are not monsters, usually.

      • VintageVNvet says:

        that’s right:
        Bought new PU in 07 for the usual 30% off MSRP,,,
        Similar truck in 09 was more than 50% off, but had sat on dealer lot a long long time, including the six months while we ”negotiated” the deal, with every call from the sales mgr taking another 5-10% off their offer.
        I finally heard a deal I couldn’t resist, but still had to pull the ”jump up and head for the exit ”ploy”” when we went to close the deal and take possession.

  42. ben sargent says:

    Very interesting that sales are still strong with limited inventory maybe like housing a rush to beat future price increases.
    Cars have been replaced since they first came on the market for variety of reasons.
    USA huge market and almost all global manufacturing tries to get a piece of the usa car market

    • Wolf Richter says:

      ben sargent,

      Sales “still strong?”

      They’re down about 18% yoy in June. That’s not “strong.” However, it’s quite a bit above zero, that’s for sure. I will post exact figures in early July, when they become available.

      But sales are down because of supply shortages, NOT because of demand.

      • Steve says:

        Demand/capacity to buy is way down, from the bottom 70% that is. The stats do not show this separation because they’re mixed in. In the sense the bottom 70% want to buy is there, they just don’t have the capacity. The top 30% still no problem. People will not pay anymore the new greedy sky high pandemic prices like they did. Put the old price, it will sell. But the stubborn greedy dealers still overpaying at auction and won’t relent raking the consumer. Yet….therefore can not make a profit now because wholesale is still too high while retail price came down too far to get a sell. Giant dealer washout commencing now we’ll see who survives this time. I broke even 2008-2012. This year I lost a lot. Might be forced into retirement.

  43. ben sargent says:

    Comment to Steve Sovring
    Really sorry about the inventory of trucks not moving. Hope that situation changes.
    oil price has been dropping but demand for trucks has softened and i’m sure your depreciation and interest costs on those used vehicles is large and difficult to overcome.
    Trade in offer for my ram 1500 4wd 2009 with 120k miles was 6 k so your pricing seems reasonable. I kept the truck for a 3rd vehicle because i thought price was too low

  44. 2BFrank says:

    I think we’re in recession and the Fed is not coming to the rescue.

    Yep I agree. The FED can’t drill for oil, it can’t build vehicles, it can’t grow food, it can’t control supply shortages, it is a two trick pony, helicopter money or pull it all back, boom, bust, boom, bust.
    That cycle by the way is what largely creates the vast difference in wealth, during the boom the top 10% make out like bandits, during the bust they have a cushion to fall back on, the other 90% lose almost anything they made during the boom, in the course of the bust, so 1 step forwards, 2 steps back for them.

    The recession started on August 15 1971, together with “transitory” inflation

    • Thunder says:

      2B Frank, Yes, Nixon’s final capitulation was the start of print, we can afford it and we must, to pay out Vietnam War bill.
      Now after they lowered and lowered and lowered interest rates to afford it the Bill for it is about to come due.
      It is not Americas problem on there own, Japan and Europe are complete Basket cases that have no way out. Japan first then Europe, then Hell.
      Credit card debts have consequences.

      • Miller says:

        “Credit card debts have consequences.”

        The USA has much higher credit card debt levels (and consumer debt in general) than Japan and Europe do, so your analogy breaks completely down there. In fact that’s been a primary and defining difference for the US vs the EU and Japan for decades now, even with their own public debt headaches (which themselves vary, ex. low-debt in Germany and other core countries), private debt and household debt are much lower overseas. That’s a fundamental cultural difference that a lot of us noted on our postings abroad–Americans tend to have much lower savings and more willing to go into debt than many other countries esp in Europe and Japan, while they strongly frown on debt, again it’s cultural more than policy. That’s why even with their own issues, they have a bit more wiggle room while the US has bigger asset bubbles and more vulnerable in many ways to downturn and high inflation, Americans on a household level have much higher debt, lower savings. Plus we’re a trade deficit country, Japan and EU trade surplus gives them a bit of extra cushion.

        • Lily Von Schtupp says:

          Cultural, sure, but Americans also have much less of a social safety net than other first world countries, particularly with healthcare and education costs.

        • Miller says:

          Lily von Schtupp,
          “Cultural, sure, but Americans also have much less of a social safety net than other first world countries, particularly with healthcare and education costs.”

          True, very true. That might be why this inflationary spiral is hitting Americans so much harder than a lot of other countries in terms of standard of living and quality of life, at least based on reports we hear from our partners domestically and abroad. Healthcare costs and college tuition already take up a huge chunk of Americans’ income that people overseas are able to stash into savings or investments. (And taxes overseas really aren’t higher than the US contrary to the usual talk, not from what we’ve found, they’re just split up into more chunks.) So inflation in the US hits a lot more people already paycheck-to-paycheck living on the edge, with little in the way of reserves. Plus the housing bubble and rent surging there too. Another reason the Fed really has to go full Paul Volcker here.

    • Augustus Frost says:

      “The recession started on August 15 1971, together with “transitory” inflation”

      It was definitely the beginning of artificially inflated living standards and fake “growth”.

      Most people (including those in charge) somehow came to believe it’s real and the upcoming reversal won’t be taken peacefully.

  45. Anthony says:

    With all this chip shortage it’s a good thing that Taiwan is not involved in any wor….

  46. Thunder says:

    2B Frank, Yes, Nixon’s final capitulation was the start of print, we can afford it and we must, to pay out Vietnam War bill.
    Now after they lowered and lowered and lowered interest rates to afford it the Bill for it is about to come due.
    It is not Americas problem on there own, Japan and Europe are complete Basket cases that have no way out. Japan first then Europe, then Hell.
    Credit card debts have consequences.

    • Thunder says:

      Apology for twin posts.

    • Old school says:

      It’s all a big experiment since Nixon. French tried something similar during late 1700’s with paper notes and surprise, surprise they had do keep doing more and more until the notes became worthless and economy cratered. They chopped your head off if you got caught paying with gold.

      You will know we are in real trouble when posting anything critical to monetary policy is taken down for being fake news.

  47. Jdog says:

    Remember in the 90’s when 45K would get you a premium vehicle and not just an average one? At this rate, soon the average person will not be able to afford a vehicle at all. They already cannot afford a home.
    The age of feudalism has returned.

    • SoCalBeachDude says:

      I remember in the 1970s where the top prices for Rolls-Royce (Silver Shadow) and Mercedes-Benz (600) were around $25,000. That was before federal government regulation made a mess of the auto industry and resulted in the horrible shoddy vehicles were have today.

      • Wolf Richter says:

        “…resulted in the horrible shoddy vehicles were have today.”

        Hahaha, I had a 68 Mustang that I bought in 1976. It was only 8 years old, and it was a true POS. It was “literally” falling apart, with stuff falling off while driving, such as the clutch linkage (remember the POS 3-speed stick-shift?) which I had to jog back on the highway to retrieve and then put back in right there; the armrest fell off, the carburetor leaked, the speedometer stopped working… The speedometer, the fuel gauge, and the engine-heat gauge were the only gauges it had. The fuel gauge stopped working later. That thing was a death trap, and despite the V-8 didn’t have a lot of power. And don’t even get me talking about the drum brakes it had at all four wheels that took their goodly time to slow the vehicle. I later owned a 78 Mustang II with a four-speed, which was better but still shitty compared to today’s vehicles. The progress automakers made over the decades is immeasurable. We drove our Infinity G-35 for 14 years, and it was still in great shape when we sold it. We now have a 2018 Ford Fusion Hybrid, great car, just got over 50 mpg on our five-day trip into the mountains.

        • VintageVNvet says:

          Agree that vehicles ”had” become much much better in the fifty or so years from ’68 to ’18 Wolf, but IMHO they have gone SO overboard on the tech/electronics recently that it’s become absurd.
          When the ”plain jane” tailgate for the ’19 Ram became $3,000.00 to replace ( PLUS painting to match ) and many cars now sitting for months because of a $0.25 electronics part that cannot be made by anyone locally, and nobody at a very large dealership knows how to ”reprogram” a car so it works correctly after minor repair, IT’s ABSURD!

        • Halibut says:

          I had a 69 Chevelle I bought in 1977. It didn’t fall apart as bad as your Mustang, but it blew up in Iowa and rolled to a stop at country gas station. We both knew the engine was blown, but the guy at the station pulled off the valve covers for a look. He said, “Ahhh. You use Quaker State, don’t ya?”. I’ve been a Pennzoil man ever since.

        • Richard Greene says:

          I worked in the auto industry product development for 27 years. Retired in 2005. Was so tired of our brand cars (that I drove) needing service that I have purchased two Toyota Camrys (competitor) after retiring.

          From 1986 to 2004 I leased a new company car every year at low cost with free insurance and free service. You’d think having a new American car every year would result in very few problems. I wish that was true. Most brands have significantly improved quality since then, but Tesla is near the bottom of the barrel. And Land Rover has always been there.

  48. Michael Engel says:

    Von Lily, if in Jan/Feb 2023 your water pipes will freeze and blowup,
    people might wave a white flag, or become animals.

    • Tom10 says:

      Migration to florida will intensify.

      • VintageVNvet says:

        WE, in this case the those of us who know FL well WE, I certainly hope NOT T10…
        The flower state is not only going to be the first to go under the water once again as has been certifiably the case formerly,,, but is already way under water in some of the lower areas, once again, also certifiable, or close. There is credible evidence of tidewater height increases in much of the states.
        While there will not likely be folks froze to death as is common elsewhere when folks ”live out”,,, there will continue to be folks die from the heat in FL, ditto.
        With the shut down of the railroads possibility for free rides to FL as was the case for many years,,, and ditto ”the dog” etc., and ”hitch hiking”,,, it will continue to become more challenging for those, ”on the road” to get to FL and return,,, and hence, more likely for more deaths due to extreme temps north and south…
        Best to promote policies and practices to ensure at least some stability for temp or ownership housing for those who will choose to partake, knowing full well that some really and truly do NOT want any home.

        • Michael Engel says:

          Dirty coal clouds will block the sun, cool temp down,
          feed the trees.

        • COWG says:

          “ With the shut down of the railroads possibility for free rides to FL as was the case for many years,,,”

          Probably won’t be long and we’ll see em hanging off the back of RVs… :)

        • tom10 says:

          Heat exhaustion or frozen ice cube?
          I’ll still put my money on melting & learning to surf.
          As a Florida native, who has spent to many winters
          way up “nort” working outdoors….you will need
          a more doom & gloom nimby pitch.

          I currently live in what used to be a glacial lake.
          I’m also sure that some day the glaciers will return.
          Hopefully Florida will not be one big oyster bar & grass flat.
          Should make for good fishing.

  49. ru82 says:

    Car prices seem to stick. What are the odds that they will ever drop.

    When supply chain problems get worked out. Maybe we see a $4k or $5k drop at best but still the average price of a car will be abovce $40k.

    From what I noticed, it is it seems most cars have 3 trim levels.

    Basic (SL)
    Medium (SLT)
    Everything (limited)

    Right now I don’t think they are selling any basic trim levels. If you can only make a limited amount of cars and the demand is there then sell them with a lot of add-on packages installed as the only option.

    I am guessing that has lifted the average price 3k to 5k at least? Just guessing.

    Anyway…the new normal is the $40k plus new car.

  50. makruger says:

    Even though the average price is now $45K, America is unlikely to change it’s love affair with personal car ownership, car dependent suburbia, multi-lane stroads, or it’s utter distain for walkable communities.

  51. Turtle says:

    I was bummed that my car got totaled late 2019 because I was forced to buy a new one sooner than planned. Now I count it as a blessing! Almost three years later and it’s worth $5,000 more than I paid for it. That’s not supposed to happen. It’s a freaking car, Jerome!

  52. Willy2 says:

    – It seems consumers are really getting hurt by those high gas prices. more and more cars are being repossesed. And those cars are then parked at special parking lots before they are taken to auction. The amount of cars taken to auction and not being sold (at auction) also seems to be growing. Those cars are then put back into that special parking lot.
    – Banks who own those re-possesed cars are not willing to put all those cars in one swoop up for sale (at an auction). So, the amount of cars in those special parking lots are growing at a rapid pace.
    – This all doesn’t bode well. It may take sometime but I think it’s inevitably that prices will come down much more. I fear this is going to be (very) “messy”.

  53. Michael Gaff says:

    I have never paid more than $16,000. for a vehicle, and that includes the 2002, Acura that I gifted my wife in 2002.
    We sold her some ten eight years ago. The Acura, named Pearl, in honor of my wife’s grandmother.
    We both regret the sale.
    We still keep in touch with the new owner.
    He loves the car, and we miss her.
    It isn’t always about money, you bunch of pissants.

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