New Vehicle Inventory Stuck Near Record Low, Shortages Shift to Fuel-Efficient Cars, Prices Hit Record. But Used Vehicle Price Spike Runs out of Fuel amid Plenty of Supply

Still the strangest auto market ever.

By Wolf Richter for WOLF STREET.

The inventory shortages at new vehicle dealers continue unabated, and inventories remain desperately low, but the shortages are shifting, as demand has shifted, and there is now supply piling up, for example at Ram dealers, while fuel-efficient vehicles are essentially sold out, and EV models have long waiting lists – as people are tired of getting hammered by high fuel prices.

The number of new vehicles in “in stock” on dealer lots and “in transit” to dealers dipped to 1.12 million vehicles at the end of June, down by 70%, or by 2.61 million vehicles, from the same period in 2019, according to estimates by Cox Automotive, based on its Dealertrack data. On this basis, new vehicle inventories haven’t improved since December. By comparison, in 2019, new vehicle inventory averaged 3.66 million vehicles.

The term “inventory” accounts for what is “in stock” and what is “in transit.” And it may include units that have been pre-sold. A dealer’s website typically shows three labels next to the vehicles in their inventory: “in stock,” “in transit,” and “sold.”

The relentless new-vehicle price spike.

The average asking price (listing price) shows that dealers are in no mood to offer deals yet. The average listing price in June rose 11.5% from a year ago, to a record $45,976, according to Cox Automotive.

Cox also said that during the last week of June, asking prices “began to retreat slightly.” So maybe possibly perhaps, dealers are running into just a tad of price resistance in certain corners of the market.

Asking prices fell in January, February, and March, only to do a U-Turn in April – and part of this was seasonal as January and February are the worst months for dealers, when volume tends to plunge from the December binge. By June, they hit a new record, up by 11.5% year-over-year. This still speaks of a hot under-supplied market:

The average transaction price – the price at which vehicles were sold and delivered – jumped by 14% year-over-year, to a record $45,844 in June, according to J.D. Power data. Compared to June 2019, this was up by 36% or by over $10,000.

At these prices, dealers made record gross profits per vehicle delivered. Including finance and insurance sales (F&I), dealers made on average $5,123 in gross profit per vehicle, up by $1,174 from the already high levels of June 2021, according to J.D. Power estimates.

The chart shows ATPs for December and June of each year. Before the pandemic, there was an established seasonality, where the ATP hit a high in December but dropped from there to June every year. But in June 2020, the ATP in June was level with December for the first time. And in 2021 and 2022, the ATP just jumped from December to June without regard to seasonality. The green line connects the Decembers:

Shortages of fuel-efficient vehicles. No shortages at Dodge & Ram dealers.

Plenty of supply at Dodge and Ram dealers: Including in stock and in transit, Dodge dealers ended June with 90 days’ supply, and Ram dealers with 81 days’ supply. The industry considers 60 days about ideal between tight and sufficient.

Fuel efficient vehicles essentially out of stock. At the low end of supply in the non-luxury segments were the Asian brands with fuel-efficient models that were essentially out of stock: Toyota Corolla, Kia Telluride, Toyota Camry, Hyundai Palisade, and Kia Sportage.

At the low end of supply by segment:

  • Hybrids, 17 days’ supply
  • Mid-size cars, 22 days’ supply
  • Compact cars: 24 days’ supply.

Supply of full-size pickups is growing: At the high end of the 30 top-selling models were three pickup trucks and two SUVs: Ram 1500 (79 days), Ford Escape (69 days), followed by Jeep Compass, Ford F-150, and Chevrolet Silverado.

This is now a new inventory problem: the wrong inventory. Through 2020 and 2021, pickup trucks were particularly hard to get, and everyone wanted them. But then gas prices spiked, and suddenly the cost of filling up become one of the purchase considerations, and pickup trucks lost their edge. Demand swiveled to more fuel-efficient vehicles.

But due to the long and complex supply chains, automakers cannot instantly swivel with shifts in demand. And the supply issues, triggered by the semiconductor shortage, have taken on a new dimension through this shift in demand to more fuel-efficient models that automakers were not prepared for.

Used Vehicles: Plenty of supply.

The inventory at used-vehicle dealers, at 2.46 million vehicles at the end of June, was up by 5.5% from a year ago. Compared to 2019, it was down only 10%.

But sales have been lower for months, compared to 2021 and to 2019, as buyers have started to resist the sky-high prices. And days’ supply at the end of June, given the lower rate of sales, edged up to 49 days, just a tad above the average in 2019 (48 days).

Used vehicles: Crazy price spike runs out of fuel.

Between December 2019 and December 2021, over those two years, the average asking price for used vehicles spiked by 42%, or by $8,300 per vehicle, from $19,871 in December 2019 to $28,205 in December 2021, which was totally nuts, and that’s where resistance finally started kicking in.

By June, the average asking price dipped to $28,012, just a little below December. Declines in January, February, and March are seasonally normal, but declines in May and June are not. And by the looks of it, the completely crazy price spike may finally have run out of fuel.

But there is still no over-supply. The inflow into the used vehicle market from rental fleets has been tempered by production shortfalls of new vehicles for rental fleets, and they’re slower in turning over their fleets. And wholesale prices, though they’ve dipped from the spike through December, are still sky-high. In this environment, dealers are not motivated yet to cut prices by a whole bunch in order to move the iron. But at least the price spike has run out of fuel.

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  141 comments for “New Vehicle Inventory Stuck Near Record Low, Shortages Shift to Fuel-Efficient Cars, Prices Hit Record. But Used Vehicle Price Spike Runs out of Fuel amid Plenty of Supply

  1. MF says:

    A $10k average transaction price spike for used cars between pre- and post-pandemic translates to an *extra* $250/mo. in payment with no “hedonic” extras than before.

    The top 20% of Americans may be able to absorb this. But I suspect the bottom 80% are just fixing what they have. I’m noticing upticks in traffic to the local pick-a-part lots. While this is anecdotal, it would be interesting to see what’s happening in the salvage world.

    • andy says:

      Cashier in my local grocery store just bought Tesla Y. Perhaps her husband is in top 20%.

      • joedidee says:

        don’t care – I ALWAYS practice the 1 payment plan
        paid up for nice 2016 F350 diesel – worth every penny
        didn’t buy it for mileage but for PULLING CAPACITY
        see some of US WORK FOR LIVING TODAY
        besides if I want better mileage I just get new computer board with BULLSHIT DEF requirements
        govt says they want mileage
        then they institute cutting in 1/2 mpg using DEF

        • fade dance says:

          Literally nobody is claiming current EVs are replacing heavy duty diesel trucks for work. What a childish tantrum of a comment.

    • Implicit says:

      From the trenches: Sometimes I wish that I had more money.
      I think many wise people that are in the top 20% got there by reading good data like Wolf makes available. Cost/value still counts towards economic judgement sense.
      Just paid 1g to get rid of my suspension air bag system in my 2001 x5 BMW, and replaced it with shocks, sway bars and shock absorbers. The old air suspension system had failed 3x in the past 8 years.
      About 6 months ago I bought a similar model driver’s side door kept in an air controlled environment for $300.00 in New Hampshire, and a mechanic exchanged the handle locking mechanism, and adjusted the existing electric window tracking for $180.00. The engine is great, and uses very little oil. The car is heavy duty, still flys, has no rot, and is fun to drive.
      My point being that temperance of emotion can save a lot of money, regardless of whether your rich or poor. It is just good economic decision making.
      My 2005 Mazda Tribute is “keeps on truckin” since finding a Canadian fix for the passenger side water build-up in the wheel well area causing rust on the cheap tin. There was a recall for the 2006 for that defect, even though the problem started with the 2005. The Canadian made custom machined fix was about $200.00 on Ebay, and a mechanic installed it for around 300.00. Have not had any big issues since that fix about 7 years ago.
      Every problem is a project that has a lowest common denominator in the cost value equation, if your willing to do the leg work. My relationship with my mechanics is more important than with my MD’s. My MD is an herbalist like me, and I don’t see him that often yet. I am a recent septuagenarian.
      For me, I still like going out to eat with my wife, adult kids, and grand kids. We’ll still overspend at restaurants, but we have started to cut back.
      Money saved is money earned.

      • robert says:

        “… suspension air bag system in my 2001 x5 BMW …”

        My only complaint about my ’88 Lincoln Mark VII. Everything else was fine, and I drove it for 15 years with no other failures.

    • gametv says:

      wolf – i am curious whether tesla has a significant market share in the US and the shift to BEV cars has increased the average selling price. i just dont see how the average selling price is 46K, crazy high.

      tesla buyers are saving a ton on gas, maintenance and will have higher future residual value, so sometimes it makes sense to pay a little more upfront. ($600 monthly payment for 5 years, but $150 in monthly gas/maintenance savings for the life of the vehicle) makes the financial equation much better.

      • Wolf Richter says:


        In terms of market share by brand, measured by registrations, in Q1, Tesla’s market share rose to 3.3% in the US, surpassing BMW and Mercedes-Benz for the first time. It has also been ahead of Mazda for a while. It’s behind GMC (3.7%), Ram (3.9%), and Subaru (4.1%). Toyota was #1 with a share of 13.7%. Ford was #2 (12.3%), Chevy was #3 (9.9%).

        Per registration data via Experian.

        Tesla’s near-luxury and luxury sports sedans and SUVs compete directly with BMW and MB.

      • Christopher Burrell says:

        For most working class people the cost of EV’s have to come down a lot to make them a practical buy. A friend of mine just bought the latest Tesla 3 extended range model. It provides him with 360 mile range and out the door it cost him 55k. He pays a premium with his auto insurer because it is a EV. He works from home, but has to commute 200 miles round trip one day a week to his office. At 90% the model 3 can make the 200 mile round trip drive with 10% battery life left. He has a 240V 50 amp charger, which is consider a fast charger. It charges 10% an hour. So on his commute days, his battery is at 10% when arrives home to charge it. The charger is continuously pulling 50 amps for 8 hours. His power company charges 13 cent per KWH. So it cost him 12.48$ in electricity to charge his Tesla. I commute 110 miles round trip, five days a week. My 2016 Mazda 6 averages 30 mpgs. At 4$ a gallons for gas, I pay around 14$ a day to commute. If I had my friends new Model 3 Tesla with the same charger, it would only cost me a little over 6$ a dollar in power cost to drive the Tesla. That translates to around 2000$ in saving per year over my Mazda 6…but my 6 is paid for. If I totaled it tomorrow, even with the crazy inflated prices of used cars, I could go buy the same model year with same amount of miles for 15K all day long. There are plenty of fuel efficient sedans in the 15K range that get 30 plus mpgs that have great reliability, if one doesn’t care that the mileage is over 75,000. I’ve owned a few and seen several fuel efficient Japanese sedans that easily go for 300,000 miles. As long as people can buy used ICE sedans that get 30 plus mpgs for 30K to 40K less than a Tesla, and it will last at least 100k more, with little maintenance, they will not buy EVs. The yearly fuel savings doesn’t out weigh the initial cost difference. And when gas was under 3$ a gallon, the power cost to charge an EV was only slightly less than to fill up a fuel efficient sedan. When the price of EVs come down to the 25K-30K range and EV maintenance comes down, only them will people begin to transition to EVs in large numbers.

        • Sams says:

          If a 110 miles round trip daily commute is common there is something very wrong with urban planning and orginisation of society. It is ridiculus ineffective in both time and energy used.

        • Brad M says:

          You seem to have forgotten a few things on your calculation.

          Sales tax being the first which is somewhere in the ballpark of $3800-$4500 depending on location. (with no trade-in)

          On top of that there is registration. In Nebraska, that would come out at around $1300 for the first year.

          The break even point compared to a V-8 4×4 crew cab pickup to an EV might be two+ years. Longer if gas goes down.

        • Christopher Burrell says:

          Brad M, it is not a fair comparison to compare the break even price of a Tesla to a 4×4 pickup truck. The people who are buying brand new 4×4 pickup trucks or large size SUVs for 50k to 80k range do not care about saving money at the pump. A Tesla car will never be able to perform the task that a 4×4 pickup truck or large SUV serves for many people. It is a apples to oranges comparison. Also, you pay sales tax and registration on a Tesla , so the point is moot. The main premise remains the same: until EVs prices come down and can compete in the compact and mid-size sedan segment where most of the cheap fuel efficient ICE vehicles are, and be as cheap and reliable over the long term as many cheap compact and mid size ICE sedan have proven to be over the years, the average Joe blow consumer who is on a month to month shoe string budget will not migrate over to EV cars, even with gas being 4+ dollars a gallon.

        • Christopher Burrell says:

          Sams, for people who don’t live in a big city, it is common for people to travel 30 or more miles one way to get to work. Battery advertised range for EV’s is like ICE’s mpgs, they are under ideal conditions. They don’t factor in extreme heat/cold, a fast foot or constant stop and go traffic. My friend isn’t getting the 360 mile range that was advertised on his new model 3 extended range…IMHO batteries powering cars is a stop gap until we find a better form of generating power for the electric motor in EVs. How can a finite resource like lithium which according to some projections, will be depleted in less time than oil will be, the long-term answer to breaking oil dependency? Replacing one finite resource that eventually will run out for another finite resource that will eventually run out, can’t be the ultimate goal…not to mention the environmental damage from the lithium mining itself. In Salar De Atacama Chile, 65% of the water supply is used for mining lithium. If we were able to wave a magic wand and have large scale lithium mining operations in place and had enough EV manufacturers to replace today’s market with only EVs, what would the large scale mining operations of lithium to produce all those batteries do to the world’s water supply? Especially when water in many emerging nations is a precious commodity. Does consuming so much of the world’s water supplies on such a large scale to make batteries for our EVs, so that we in the developed world can feel all warm and fuzzy inside about ‘ helping the environment ‘ really a price we want to pay? Do the ends really justify the means?

        • Isaac S. says:

          re “A Tesla car will never be able to perform the task that a 4×4 pickup truck or large SUV serves for many people.”

          apparently you did not get the memo that Ford now sells the F-150 lightning EV pickup truck, which does perform the task that a 4×4 pickup truck does. By 2025 they expect EV sales to realy ramp up then dominate.

        • Christopher Burrell says:

          Isaac S, in real world applications for those who actually work out of their trucks, the Lightning’s short range and quick drain of the battery while hauling any kind of a payload is a liability. It is not practical over the standard F150 and has a long way to go before it matches range, payload, and convenience of a standard ICE F-150…the lightning is for the vanity truck owners who never actually use their trucks for what they were designed for, but only to look cool while commuting back and forth to work.

      • Erich says:

        The big problem I see with EV’s is how long will the battery last? I seem to remember some dude in Norway blowing up his Tesla when he found out it would cost him something like 22K $US to replace the battery. My car is a 2012 Honda Civic which I will drive until the wheels fall off. I’m 65 (retired) and hope to make it to 85. At that point I’ll be ready for the old age home and stop driving anyway.

        • Christopher Burrell says:

          Indeed! Long term maintenance cost and initial cost have to come down in order for the average buyer to purchase EVs…also battery tech has to improve…in the real world, with a brand new Tesla with no battery degradation, with the extended range model 3, 80% of the battery is used going 200 miles, not 360 miles as advertised. Of course working around electricity and electronics my whole career, I often think battery powered cars is merely a short term solution to a long term problem because batteries are highly inefficient and inferior to be other alternate forms of power generation.

        • Sams says:

          One battery may not last, but most do. And accidents write off enough cars that second hand replacements are at hand.

        • Apple says:

          New vehicles are all warrantied 100,000 miles/8 years.

  2. Matthew Scott says:

    I was offered $12,000 by for my 2015 Honda Fit (53,000 miles) at the dealer yesterday . Payed $20,745 for it new

    • Phil says:

      I have 230k miles on my 2007 Fit and I can’t figure out how to replace it. They stopped selling them in the US… boneheaded move.

      • Digger Dave says:

        I was in the EU in April for the first time in a long while. Um there’s so many basic non-lifted variants of every day cars there that are no longer or were never sold in the US. We were fat addled fuel addicts feeding our CUVs, SUVs and pickup trucks with cheap product. And when our product gets scarcer we’re the biggest bunch of pathetic crybabies you have ever seen. Gas should be cheaper because me, me, me! No, it should have had the sh%t taxed out of it to break our habit. Americans can only be counted on to do the right thing after all other possibilities have been exhausted. Just like the Fed should have been raising interest rates when the economy was going strong back at the end of the last decade. Now that they’re out of cheap money gimmicks they’ll finally start doing the right thing too.

        • Fulton Waterloo says:

          Right on!

        • Sams says:

          And there is a lot of small cars. On holiday in Rome I see a lot of two seat Smart cars, Fiat 500, Fiat Panda and that Jeep sligthly larger than a Fiat Panda.

          There is even some Panda 4X4 on the streets:)

        • hwy_str says:

          Just people in Europe are so poor that they can afford only small cheap cars. Wages are way lower than in US and prices for everything are much higher. This a Civic is almost a luxury car

        • Wolf Richter says:


          Lots of BMWs and Benzes in Europe, tho. People even drive Porsches.

        • Digger Dave says:

          hwy_str, “poor” and “wealthy” are relative terms. My ancestral homeland, the EU country I was in, is poor by European standards, yet the people eat better, have better healthcare, better levels of physical activity and stronger community ties than we have. It was quite the comparison. I live in a town of about 6,000 people where everyone has at least one car. I stayed in a town of about the same size where maybe 1 in 10 people have a car. I’m not an “eyes closed” kind of people. American “wealth” is not all its cracked up to be. Our upper-middle class is the most fuel hungry class of people in this world. Where I live the typical hobbies for these people are buying toys – 4-wheelers/ATVs, big trucks, 5th wheel campers, snowmobiles, boats, cars – every hobby is some fuel guzzling activity. In the cities and suburbs, where families are spread out over hundreds or thousands of miles, the hobbies are travel sports for the kids, commuting to work, and traveling to far away destinations by plane frequently. We have a real problem and we’re not going to drill our way out of it. I’ll take a lot less inflated American wealth if it makes us more resilient and improves our quality of life. I have no sympathy for anyone complaining about the cost of gas. I have even less sympathy for politicians (both parties) that pander to despots or anyone with an oil rig worth begging to. Once I got out of my sports-car ridiculousness phase of my youth, I was buying fuel efficient cars, even working a trade out of them, even when gas was below $2.00 per gallon. Anyone driving something that gets less than 30mpg in 2022 that does not use the vehicle for a trade has earned zero f&^ks for me to give.

        • Travis says:

          Remember that the US has no public transportation and long travel distances. Evs?

        • Apple says:

          Parking in European cities is terrible. Having a small car is a benefit.

        • Erich says:

          “Just people in Europe are so poor that they can afford only small cheap cars.”

          I guess you’ve never been on the German Autobahn. The people in the left lane going 200kp/h (125 MPH) and sometimes FASTER aren’t driving cheap cars. Most stretches of the Autobahn outside of built up areas have no speed limit.

        • Denise says:

          Parking is a problem in the EU whether you live in the city or a small village. In Milan, people hardly ever move their cars parked on the street for fear of loosing their space. Apartments with underground parking sell at a premium for those that can afford it. Public transportation is available, abundant, efficient and reasonably priced. Those that are educated and middle class have a high quality of life. Especially older millennials in tech. My children here in the US would love to pay €1000 Euro a month for premium day car for two. In Denver my daughter is looking at $3000 per month for an infant. Finding a space is the hard part.

        • Sams says:

          Re hwy_str, I do think you confuse small cars with cheap cars. Ok, the Fiat Panda is small and cheap. The Fiat 500 a fashion item and the Jeep Renegade a lifestyle asessory. Priced as such.

      • Old Ghost says:

        Phil wrote: “I have 230k miles on my 2007 Fit and I can’t figure out how to replace it. They stopped selling them in the US… boneheaded move.”

        My friend at Honda says Honda renamed the Fit . It is now called the HRV (not to be confused with the CRV). The biggest difference between the HRV and CRV seem to be the funky rear door handles on the HRV.

        I bought my used 2017 used about 3 years back. It had 16,000 miles on it and cost me $14k. Had some dents & scratches. Carfax says no accidents, so I jumped at the deal. Really glad I replaced my 2001 Civic before Covid.

        Sometimes it helps to have friends in Dealerships.

        • Adrian says:

          Tha’ts not true. HRV is bigger and higher than the fit but yes everything else is the same. Honda never stop selling the Fit. Only in United States. In the rest of the world it is called the Honda Jazz. Don’t know why they don’t just use the same names in every market but anyway the new HRV got even bigger so honda made a big miss calculation. They have nothing small anymore in USA market. Hyundai did the same thing. Discontinued their smallest car and replaced it with a CUV. Toyota discontinued thir Yaris Ford got rid of cars all together except for the muscle car. No one makes small cars anymore .

        • Sams says:

          There are a lot of small cars made. Not in the USA and those made elsewhere is not imported to the USA.

          Well the Jeep Renegade may be considered a small car in the USA and the sell that one. In Europe you get it with a hybrid drivetrain. Check the Italian Internet sites.

        • JohnnySacks says:

          No manual transmission, just the go-kart CVT belt drive. Never. Very expensive problems waiting to happen. The Fit and anything like it is dead.

    • andy says:

      Do you park it or just bring it inside?

  3. Publius says:

    I’d love to hold out, but one run red light later and I’m stuck in this market.

  4. David Hall says:

    I bought a new Ford Escape SE earlier this year for about $32k including registration and sales tax. I checked a local Ford dealer. There are three new Escapes on the dealership lot for sale.

    The BLS CPI June report stated new vehicle prices increased 11.4% in 12 months. Used vehicle prices increased 7.1% in 12 months.

    It is worse in Russia. Due to sanctions they can not get new vehicles or parts from automakers in participating nations. Cuba can not get American auto parts due to sanctions first imposed in 1960 after their revolution seized US corporate assets.

    • 2banana says:

      Russia has hypersonics vehicles and regularly sends stuff into space.

      They will be able to figure out how to produce an automobile, especially with all that cheap gasoline and diesel.

      • Ulev says:

        Read your news…
        Razputin just canned’ the head of the Russian space program.
        Let’s ‘see’ how he can provide ‘rockets’ other than those that are being used in the Invasiin… which don’t seem to ‘work’ very well…

      • Cytotoxic says:

        They can’t even build the tanks they need.

    • ru82 says:

      Did you check out the physical store lot or online

    • robert says:

      Cuba has been able to trade with 180 other nations for the last 60 years or so. Most convenient would be Canada, but many others have US parts, or anything they need.

      • David Hall says:

        Why are there 50’s vintage American cars on the streets of Havana? They are blockaded and cannot get just anything they want. They are allowed modern buses for public transportation. I saw those in photos of Cuban city streets.

        • Apple says:

          Maybe same reason they are on the streets of the US?

        • Sams says:

          And those old cars have become classics. It is 20 years since I visited Cuba. There was new cars there too, but I do think quite a few did like those old cars. With no need to drive a lot, why not keep that old car?

          Even then taxis and rental cars where newer cars like other countries.

          If nothing have changed, Cuba is an example that an US economic blockade is not very effective.

        • David Hall says:

          Obama removed sanctions on Cuba in 2015. Trump imposed new sanctions on Cuba before leaving office.

        • Realist says:

          As far as I know, it is allowed to freely trade and own cars in Cuba that were registered prior to Infidel’s revolution, thus the reason to keep those old cars in use. Usually the engines have been replaced with Romanian or Russian diesels. Damned good mechanics there, everything in the engines metric, everything in those cars in inches.

  5. 2banana says:

    Same exact article was written in 2007.

    We never learn.

  6. Matt says:

    Never believe everything you read from a survey co. Case in point. Where I live in Maryland north of Baltimore 3 months ago every auto dealers lot had just a few cars. Now every single one is bulging with new and used cars. And I do not live in a poor area

    • Wolf Richter says:


      Hahahaha, RTGDFA

      1. This is NOT based on some kind of opinion survey, or internet survey, or whatever, but on actual inventory data from dealer computers (2nd paragraph).

      2. Yes, there is plenty of supply of used vehicles, as the article explained and showed with a chart.

      3. There are shortages in fuel-efficient cars. But pickup trucks and SUVs are starting to build inventory, as the article said. Doge and Ram dealers have lots of supply.

      4. Your dealers are probably not “bulging” with the vehicles that are in short supply, as the article pointed out: Toyota Corolla, Kia Telluride, Toyota Camry, Hyundai Palisade, and Kia Sportage. And in general, with hybrids, mid-size cars, and compact cars.

      5. You might not be able to tell the difference between new and used vehicles by just driving by. What you thought might be “new and used” were likely just “used.”

      • Flea says:

        #4 No American vechiles = Ivy League idiots ,no wonder the world eats our lunch . To much greed

        • El Katz says:

          Flea: The domestic manufacturers consciously abandoned the passenger car market, leaving it to the imports. We thought they were idiots when they did it and they laughed at us for still making a full spectrum of them.

          The domestics were right…. for awhile. Passenger cars required higher incentives to move them off the lot, but – since a product development cycle (R&D, testing, tooling, etc..) is several years, we stuck to it. Apparently, now for the win.

        • Rusty Trawler says:

          Got caught by a CSX train yesterday. We counted the cars was over a hundred and they all were car carriers empty. They were heading east had never seen a train comprised of just car carriers before was really strange.

        • Wolf Richter says:

          Rusty Trawler,

          Yes, railroads’ autoracks are full only one way. Then they return empty to the rail yard near the auto plant or to the port, where they’re loaded up again.

          Lots of containers are shipped empty as well, as they go back to the port. You just don’t see inside them.

        • COWG says:

          You probably saw the empties being returned to the eastern seaboard importers…

          One of my first jobs as a teenager was a driver for the processor of the cars when they they came off the ships in Jax, FL…

          We serviced Southeast Toyota at the time (early 70s)…

          Lots of cars out by rail….

      • Jay says:

        From YAA:

        “Auto plants in Europe and North America auto plants canceled another 104,000 vehicles from their production schedules because of chip shortages.” In addition, GM said they have 95K cars sitting on lots “supposedly without chips”.

        No reply needed, just venting Wolf, but no one can convince me that GM et al does not want low lot inventory for these three reasons:

        It makes absolutely ZERO sense for GM, Ford, etc to continue to manufacture vehicles when they can divert new chip shipments to the holding lots to send those cars onto dealers UNLESS THESE POINTS ARE TRUE WHICH I BELIEVE THEY ARE:

        They know a new car sales storm is coming. The consequence of this is extra bargaining power with the UAW when sales really tank, and they have to negotiate longer production stoppages than what have been implemented to-date.
        They know people are willing to pay higher prices when they’re fewer cars on the lot to choose from.

        Now, does that mean that the chips shortage has completely abated? No, but what it most likely means is they want low inventory on lots to sustain high prices. It’s simple supply & demand econ 101 here.

        Just my $0.02.

        • Wolf Richter says:


          Read up about the aircraft manufacturers Boeing, Airbus, and Embraer: This was discussed at the top level this weekend: They’re all suffering from chip shortages.

          These chip shortages caused engine shortages. So the plane makers can build the planes but without engines, and then add the engines later. These engine-less planes are called “gliders” in the industry. Airbus has built a bunch of gliders that are now waiting for engines which are now waiting for chips. Boeing’s CEO said this weekend that he refuses to build gliders as a matter of principle. So aircraft makers are all suffering from the same problems.

          As are appliance makers, automakers, chip equipment makers, etc. They all have problems getting enough of the specific chips they need. If just one chip is missing, you cannot build the engine.

          People who are claiming that this is somehow all fake, and some kind of conspiracy among those manufacturers to pump up prices, are clueless “and” there is something wrong with how their brains function in that they refuse, and I mean “willfully refuse” to understand the data and the facts, and instead spread their own fantasies. I now have zero tolerance for people abusing my website to spread this clueless fantasy BS that the chip shortages are somehow fake.

  7. Wisdom Seeker says:

    Re “But at least the price spike has run out of fuel.”

    Could the used-vehicle average list-price data be skewed by changes in the inventory mix?

    A list-price index will be overweighted by whatever’s not selling. And a drop in asking prices for vehicles that aren’t selling isn’t exactly deflationary, when the prices of the vehicles that are selling is still rising.

    It’d also be really interesting to see what the European vehicle markets are doing. If the headlines here are to be believed, the energy crisis should have an even stronger impact on vehicle choices over there…

  8. otishertz says:

    Maintenance on my old chevy averaged about $75 per month for the last five years.

    Sure, I only get 12-15 mpg, 8 if I use the horsepower. With insurance at $560 a year and easy availability and cheap parts interchangeability I can’t see how people think they are saving money on a $60k financed car with 28mpg.

    I’m not so smart but I’m pretty sure some car buyers aren’t.

    • Marbles says:

      I mostly agree that it’s less costly that way. However, I want a vehicle that is comfortable and will also get me through mud, snow, and ice when I need it to, without breaking down in between. So for me, newer is, or has been better.

      • Steve2wryt says:

        I have a 1999 Chevy 1500 with 379K miles, okay so the second motor is probably got 200K, but the transmission is original and I’ve only had the transfer case worked on once. Honestly the motor replacement was my fault not doing maintenance on it as I should have. When I was a contractor my mantra was “no tools in the cab,” so the interior is a little worn but very comfortable, power seat still works, drives really nice. If I put good quality tires on it I can get through mud and snow cuz it’s got on the fly four-wheel drive. Sure I get 16 mi to the gallon but thankfully I don’t have to use it as much as I used to since I have a different job, so why would I get rid of this thing when I still need something to haul dirt and tools to help with projects etc. My wife has a Subaru that also doesn’t get great gas mileage but we don’t have huge commutes so what’s the point of buying new or replacing at these ridiculously expensive prices? Seems like there’s a lot of sorting out that is happening in the EV market and as long as I don’t have to buy anything I’m going to wait and see how things evolve. We’re still needing to deal with the infrastructure beef up that’s going to have to happen if there’s a ton of more EVs on the road and in town, even charging stations in the garage seems to me. I’d wager in a couple years there’s going to be some really good products out there from a variety of manufacturers and then we can all argue about which is better. I just wish somebody (maybe my youngest?) would invent a new battery technology that makes more sense.

    • Fulton Waterloo says:

      How about $14 k for a car that gets 50 mpg?

      • JohnnySacks says:

        Like the Volkswagen diesels were? Can’t have that, can we? No problem for the rest of the world though. Visit Volvo’s European site to see how many simple models there are. Ever hear of a Mitsubishi L200 small pickup. None for us.

        • J7915 says:

          We rather turn vegetable oil, food, into ethanol than biodiesel. Irony is that Rudolf Diesel designed his engine to used vegetable oil IIRC.

  9. Ulev says:

    Not to brag about vehicle choices But…
    My 2010 Prius is now averaging 45 mpg
    That’s also with the AC on….
    No reason to accept some interestingly
    High offers at this time…just keep a great choice of vehicle and stick’ it out, for better ’times….

    • drifterprof says:

      Seems like a lot of car enthusiast people hate the Prius, viewing its steering and road feel as marginal, as well as lack of desired power. However, I drove my parents’ Prius on a couple of long trips, and it seemed comfortable enough, and I really liked the good mileage.

      I had driven their Camry for several years, after they bought the Prius, and gave it to my brother (who with non-brotherly greed sold it to me when I needed a car). For me, the Camry seemed somewhat luxurious, although I’ve never driven American tuna-boat luxury models.

      • HollywoodDog says:

        It’s not being *in* a Prius that’s the problem, it’s being *behind* one.

        • El Katz says:

          The Prius is more affectionately known as the “Pious”.

        • Jeff T says:

          For sure. They are the new generation of people that drove VW vans. Road rule was: always pass, as quickly as possible.

        • Anthony A. says:

          “The Prius is more affectionately known as the “Pious”.”

          Down this way in Texas they are known as the “penalty box”.

        • Miller says:

          lol some truth to that, at least the earliest versions that came out late in the 90’s. Maybe some kind of self selection among bad drivers but at least out on West Coast, if we spotted one of the “Prius pioneers” we knew to give ’em a nice widened berth, stay a couple lanes away and pass as soon as we could.

    • Lynn says:

      My 80’s Isuzu hatchback got the same, although it probably wasn’t as cushy. Made of metal though, IIRC.

  10. Itsbrokeagain says:

    I unfortunately had to purchase a new (used) daily driver at the height of this nonsense. Wife and I had a 2003 BMW 325xi that we bought with 103k miles on it from someone who owned it from new.

    Since I used to fix them at the dealer and had access to a friend’s shop and network of aftermarket parts dealers, I overhauled this thing soup to nuts and replaced every wear item, had a spare set of wheels with snow tires on them so wife could get two and from her pharmacy in all kinds of weather. It let us down only twice, once when the fuel pump crapped out (expected at it’s age) and one front axle.

    At 152k miles, I swapped in a motor out of a 330i that a friend and I rebuilt from the ground up. Proceeded to drive it to 171k, not burning a drop of oil or leaking anything, ice cold AC and heated seats/steering wheel, all the creature comforts.

    We had prolly a grand total of about $12k into it, including purchase price. Maybe a touch more. 70k miles well driven, averaging 23mpg (30 on the hwy) no car payments. Had it almost 5 years. You couldn’t find a,NY kind of car with the options it had without spending 20k+.

    Got totaled by a youth who was obviously just troubled and a product of the system. Pulled a left in front of me because he decided he didn’t want to wait for the guy in front of him to make the left first. No apologies or anything from him or his family who tried to blame the accident on me. Had to fight with insurance to get anything decent for what it was worth.

    Needless to say, I had to buy another used car in January this year. Ended up with a 2000 Jetta TDI, which, aside from it’s amazing MPGs is a piece of junk. $4200 for a car with 255k miles on it, needing all the maintenance. Anything that was remotely maintained was fetching 7k+ and ‘i know what I got’ attitudes. Honda civics or Toyotas? LOL. 10k+. Plus they would get stuck in the snow.

    I’ll be commuting in this hunk-o-junk for the rest of my career, or until I come out one morning and it’s a pile of black dust and 4 tires.

  11. ri82 says:

    I went car shopping today. I looked online at a Toyota dealer that said it had 11 hybrid RAV4 and 14 ICE RAV4. Their new inventory search showed over 24 different models available

    When I went to the dealer it was a different story. They had 4 total vehicles i could buy today. 2 Tundras, 1 Pathfinder, 1 Highlander.

    I asked if they had a RAV4 I could at least test drive as I have never ridden in one. I was told no. I could sit in one that was already sold.

    I asked how long is the wait time for a Hybrid RAV4. If i ordered today it would be 1 1/2 years.

    If I was not picky, An ICE RAV4 could be about 30 to 60 days. They get a shipment and then start calling the wait list and tell them the color and features. If the buyer declines they call the next person on the list.

    • ru82 says:

      I was told it does depend on the model as some Hybrid cars wait time was not as long. But at least 9 or 10 months

    • ru82 says:

      I am thinking go king on Lithium. lol

    • Wolf Richter says:

      Yes, this is very typical for Toyota dealers. They’re essentially out of vehicles on the lot. They show inventory online, and then you go there, and there is nearly nothing.

      When you check the inventory online, always look whether it says “in stock” or “in transit” or “sold” by the vehicle. That might still not tell you the whole story, but it helps.

      • El Katz says:

        The inventory listing on the dealer websites is usually driven from the manufacturer’s data. The “available” cars cannot be reported sold until the vehicle hits the ground. Since vehicles “on hand” availability is triggered by a clock (average shipping time), any delay in the arrival of the vehicle will potentially trigger an “on hand” categorization, when in fact, the vehicle is still on a truck somewhere.

        The opposite can happen when a vehicle arrives prior to it’s scheduled date. It will show “in transit” when in fact it is on ground.

        The “sold” part requires someone at the dealership to maintain that category. When the car is reported sold (RDR’d), it disappears from the website inventory.

        It’s an inexact science and there are likely trucking issues with the cost of fuel resulting in fewer “split loads” or partial loads (aka waiting for a full trailer before going to East Sasquatch to make the delivery).

      • Wes says:

        The Ford Maverick is also in very high demand and Ford has not even been advertising it. When it came out in October 2021 they had so many orders that they ended up filling the one year allocation by January 2022 (Note: They had estimated production around 100,000 units). They also experienced supply constraints on certain options. They essentially underestimated the hybrid option and had to limit the number to be built for 2022. Now, they’re having to carry over 2022 orders into 2023 due to multiple option supply constraints.

    • ru82 says:

      I went to a different Toyota dealer today.

      RAV4 Hybrid is only 6 to 9 months.

      RAV4 ICE is 1 to 2 months

      Who knows what to believe. The dealer in my previous post said I could put down a $500 deposit and if I did not like the vehicle, I would get my money back. This dealer with the shorter lead time said I would not get my deposit back if I do not like the vehicle. But at leas they had one to test drive.

  12. Flea says:

    2016 very Passat 25 k on odometer 4 cylinder turbo only replaced front tires ,apparently Michelin tires are not very good .no ev for me at 70 k or higher

    • COWG says:

      Brother flea,

      You, my friend, have never ridden in a 7 series BMW, with Michelin Pilots…

      Mercy… what a ride…

      • SoCalBeachDude says:

        I have 2 BMW 7 series in my driveway right now, and they do ride quite well for a moderately priced sports luxury sedan.

        • JohnnySacks says:

          Huh? BMW 7? Moderately priced?
          Starting MSRP $93k. This is why we’re where we are with transportation appliance prices.

        • Cmogruder says:

          He awakens Me morning by morning,
          He awakens My ear
          To hear as the learned.
          The Lord God has opened My ear,
          And I was not rebellious,
          Nor did I turn away.

    • El Katz says:

      Michelins on the front of a Passat….. Did you rotate them as directed?

      I put a set of Michelin Cross Climate 2’s on the technomobile (AWD). I have approaching 20K on them and the tread depth measures near new (measured at the tire dealer a month ago). However, they’ve been rotated 3 times and I am religious about tire pressures. Those tires completely changed the ride and handling characteristics for the better.

      • Flea says:

        Same tires since new,dealer told me they put cheapest tires available on ar factory ,never last long

        • El Katz says:

          They might have been the cheapest Michelin available but certainly not the cheapest tires. Think the Michelins suck? Put on a set of Continentals.

  13. Depth Charge says:

    What a truly disgusting situation. What I find particularly repulsive are some of the anecdotal stories of who was buying up a lot of the new cars, pushing prices into the stratosphere – a demographic apparently referred to as “stimmy ballers” by the car salesmen.

    A “stimmy baller” was a person who was collecting UE bennies as well as the “extra $600” per week that the federal government decided to kick in, for reasons to this day I do not understand, and in turn thought it prudent to head right out and buy a new car they could normally never dream of affording with their sudden windfall, not caring that it was temporary income and well beyond what they’d ever earn once forced back into work. And the banks were apparently fine with qualifying them based upon stimulus payments, not actual job income. How gross.

    Stimmy ballers were doing things such as putting $20k down on a Hellcat in 2020, then defaulting on the loan a year later. Who in the f*** decided it was a good idea to give people free money to do such thing? And now we have some of the most disgusting price distortions the country has ever seen. Unreal.

    • drifterprof says:

      Meh. Doesn’t disgust me at all. That’s the way a significant proportion of people always have been and always will be. I remember my cousin married a native American (Klamath Falls tribal region in southern Oregon) back in the late 60s. Somehow the leaders of the tribe got the U.S. to allow them to sell part of their beautiful, wonderful property (mountains, lakes, river), which was a tragedy. The land must be worth 50 or so times more now than it was then.

      What was the first thing the guy my cousin married did with the free money? Go out and blow all his money on a shiny new pickup truck with all the bells and whistles, and have a year long drug / alcohol fueled party with many of his buddies doing the same. I remember him showing up with my cousin at my parent’s house (in the area about 45 minutes drive south of San Francisco — my parents were typically away somewhere for the weekend). He literally had a duffel bag full of drugs, which blew my mind. Nice guy though.

      What disgusts me is the Federal Reserve bailing out hedge funds. That kind of corruption makes the pissant “stimmy ballers” (whose default record well be tracked forever) just a drop in the bucket.

      • tindrum says:

        The guys that own the hedgefunds own the govt.
        USA 2022 = USA 1895 just without the land, oil, trees, gas, etc etc.

        • unamused says:

          The USG has many owners, all of whom have more money than, for example, you. What they don’t have is an IPO.

      • Einhal says:

        So? The fact that a significant portion of people always have had and always will had significant character flaws and moral failings doesn’t mean that the rest of us have to encourage them.

        • COWG says:

          But the problem today is because of social media and cell phones…. We know who they are… and they’re looking for a fight…

      • Depth Charge says:

        “What disgusts me is the Federal Reserve bailing out hedge funds. That kind of corruption makes the pissant “stimmy ballers” (whose default record well be tracked forever) just a drop in the bucket.”

        It’s not an “either/or” thing. The FED disgusts me, too. But Wolf’s post is about the auto market, and the unbelievable distortions therein.

    • Nate says:

      If you want money spent on asset/boats/art. give stimmies to the rich. If you want money going to local restaurants, WalMart, car lots, etc., give stimmies to the middle class and poor.

      It’s not rocket science. It’s just that bailing out investment banks and let everyone else go broke during a recession is stupid. When you give money to the poorer folks, they immediately spend it local.

  14. Sams says:

    Follow on from low volumes of cars sold and delivered the last years there will probably be less used cars from these years on the market in the future.

    The mix of modells sold and delivered is now know, finding a fuel efficient second hand car from 2021 can get difficult;)

    Prices on second hand cars may adjust to this.

    • Gerald says:

      Good point…

      I’m debating if I should keep my ev or sell it now before the recession hits. But with limited future used car supply, maybe used EVs and hybrids will continue to remain high for a while???

      • Sams says:

        My guess is that in the USA the supply of second hand EV and hybrid cars from the two last years will be limited. Gas guzzling trucks maybe not to the same degree as more of those where sold.

  15. Alan says:

    I work for the largest volume Chrysler Dodge Jeep Ram dealer in New York State. The small cars like the compass and renegade and Cherokee are sold before they even come off the car carrier. The big monstrosity pick up trucks and grand Wagoneer‘s are still selling fairly well even with the ridiculous high price. It continues to amaze me that people will come in and spend $70-$100,000 on one of these things finance it for seven more years and then have to feed it with $200 worth of fuel every week. I just don’t understand the mentality of I want it i’m buying it and I don’t care what It cost to operate or pay for or insure.
    And then we get the most ridiculous ones of these kids living in mommy’s basement but they come in and buy their 50 or $60,000 pick up truck and have a job that pays and 15,000 a year. I’ll just keep on driving my 21-year-old caravan with 250,000 miles on it until it doesn’t run anymore.

    • Jeff T says:

      I had two Plymouth Voyager vans in the 90’s. Transmissions didn’t make it past 50,000 miles. Rear hatch lift cylinders tore loose from the body. The rear air conditioner seal ended up leaking. Went to a junkyard to look for some parts, every voyager or caravan van had a damaged body where the lift cylinder was attached. Then I bought a used GMC Suburban. Turned out to be worse than the Voyager vans. Moved on to only owning Toyotas and Hondas.

      • Halibut says:

        Good move. Walking is good for you, but sometimes, it’s profoundly inconvenient.

      • Christopher Burrell says:

        I will consider an EV when they can compete with the cheap, extremely reliable, fuel efficient, low cost of maintenance Japanese econo cars that hold their value well and are still running 20 years later with 300k miles on them…until then EVs will be a niche market competing well with the luxury car segment.

    • unamused says:

      “It continues to amaze me that people will come in and spend $70-$100,000 on one of these things finance it for seven more years and then have to feed it with $200 worth of fuel every week. I just don’t understand the mentality”

      I shall explain. All humans possess a characteristic shared with no other animal, the neurotic need to feel ‘special’. Rather than learn to control it, your Marketing Culture teaches people to feed it, and indulging a weak ego can be extremely expensive, not to mention profitable.

      Sucks, doesn’t it? The sheeple have spoken, and they have said ‘Ba-a-aa’.

      • THRILLHOU says:

        @Una Really insightful observation, at which you are excellent. I think that need to feel special is indeed a shared human trait. Americans, however, take this to the Nth degree with the myth of the American Exceptionalism, City on a Hill, and the collective Puritanism/Calvinism which are always just under the surface. The weak ego is kept weak by the rigid authority Calvinism demands. The Salvation we sought has now morphed into the quest for Validation instead . And the gyre widens. Thanks as always for your contributions here.

    • Lily Von Schtupp says:

      I’m assuming here, but without saying the specific dealership in mind this sounds Westchester-y to me. The Westchester mindset is something else. You have plenty of people who genuinely have the $, and plenty more desperate to make the neighbors think they do. The driveway is the trophy case.

    • Rowen says:

      You can’t believe how many I meet who will buy a new full sized vehicle for the “tax write off”. I tell them you can either pay the tax to Uncle Sam or to GM and Exxon, but it doesn’t quite sink in.

  16. Seneca's Cliff says:

    Many of the commenters do not seem be be getting Wolf’s point. For whatever reason, the American and World auto industry does not seem to be able to produce the cars that consumers want right now. This is not some short term situation caused by a blockage at the docks or bad ordering. And sorry, it will not be fixed by everyone going out and buying a “magical” used car that can run forever on bubble gum and bailing wire if you know a gifted mechanic. There are no used car factories. The supply of good used cars is being “burnt thru” everyday that the scrap rate is higher than the number of new cars coming in to the system. The real question is if the car industry can solve this problem before happy motoring comes clanking to it’s demise.

    • El Katz says:

      Consumer shifts (big trucks to small cars) happen over night whereas auto manufacturers take about 90 days (at a minimum) to shift production – and that depends on component availability and product line/factory capacity/factory configuration/stamping configuration/engine casting, etc. Many cars share the same pan but use different subframes for the multiple models using the same pan. The subframes are usually cast aluminum and the suspension parts are different lengths and geometry.

      Any new product has to go through the EPA and NHTSA crash tests – which is quite costly and time consuming.

      It’s not like going from baking bagels to bread.

      And the “why didn’t the stupid manufacturers do X” question…. they build what sells. As Wolf has repeated said, no one bought the “Ka” in any volume (or name any small sh*tbox). When (and if) gas prices moderate, the small car production coming on will be met with stiff consumer rejection because the average consumer has the attention span of a gnat.

      • Sams says:

        But a car tested and documented to be safe and roadworthy in EU, is that not sufficent to homolgize the car in the USA?

        An European model could then be sold in the USA when there is a market for a more fuel efficient model.

        Jeep Renegade is an example of a car sold both in the USA and EU. Same for Stellantis and other small vans like the Ford Transit Connect.

      • RockHard says:

        “Consumer shifts (big trucks to small cars) happen over night whereas auto manufacturers take about 90 days (at a minimum) to shift production”

        It’s almost as if we’re expecting corporate managers to read trends and anticipate, rather than react.

        Also, these manufacturers USED to make small cars. They quit because huge cars are more profitable. You know what that sounds like? That sounds like someone who’s fully invested in cryptos, then their exchange freezes withdrawals, now they’re stuck with an illiquid investment. “well, gee, maybe we can take a bit less profit and continue to serve the bottom end of the market… nah, YOLO baby!”. Sounds like every other part of the investment market, TBH.

      • Christopher Burrell says:

        True, the compact and mid size car segments have been getting whacked for several years now. Sales numbers are way down, even for the big boys like Toyota and Honda. There have been several auto manufacturers that have axed their mid size sedan models because sales have been so dismal in the last few years, getting out of that segment entirely. The manufacturers simply follow market demand, and in the last 4 years there has been hardly any demand for sedans. Manufacturers aren’t going to keep throwing money into product lines that has little to no ROI.

    • Depth Charge says:

      Greed did the industry in. Now they’re begging CONgress for help.

    • random guy 62 says:

      We have noticed this weirdness in our factory too. 2016 was our best year in our history, by all metrics…units, dollars, profit per unit, etc. Strong demand and low commodity prices meant high volume, and fat margins in that period.

      In 2021/22 we have struggled to even come close to that 2016 performance, despite having just as much demand. We keep wondering what the heck changed. The labor and components just aren’t materializing to allow us to really hit a stride.

      Our bankers say they hear the same from other manufacturers too – That these have been the toughest two years the managers can remember. I suspect the sentiment is similar at the auto companies.

      The best way I can describe what it feels like every day here is “bogged down”. The company feels bogged down by high cost and low supply of so many inputs… both materials and labor.

      The past year has felt like driving an overloaded truck, trying to get up to 55mph, with the pedal to the floor, and only getting up to 40 mph. Another analogy might be music. Manufacturing is a complex symphony, but right now the instruments and the artists are all playing out of tune.

      I believe it is mostly a result of too much cash overstimulating the economy all at once.

  17. Mike R says:

    In a year or two, there will be a crap ton of used cars for sale, as repo’S are already spiking, and even way more new cars for sale, as we will be soon in the throes of a live depression, where virtually nobody will be buying. Whatever price gouging has been done, had better have been substantial, because the opposite will occur, and dealers will be begging people to buy their heavily discounted pieces of metal and plastic. Ultimately many dealers will be going out of business, a shake out that’s been in the making for years.

    • Wolf Richter says:

      Mike R,

      “… repo’S are already spiking”

      This is braindead BS clickbait being spread out there by headline-readers and publications like ZH and Barron’s that want to get clicks. Did they show you a long-term chart? NO!

      Repos are rising from historic record lows in 2021 when people used their stimmies to get caught up on their auto loans. Repos were near zero in 2021. And so the percentage increase from near-zero is big, but repos are STILL HISTORICALLY LOW.

      I will blow out all this BS when I report on Q2 auto loan delinquencies, which will be up from the historically low levels in 2021.

      In Q1, note the “spiking” auto-loan delinquencies from the record low levels in 2021. Repos come after 30-day delinquencies and are fewer because a lot of delinquencies get cured when people catch up with their payments.

      And you’re wrong with this BS: “In a year or two, there will be a crap ton of used cars for sale.”

      There won’t be because where are these used cars supposed to come from? A year from now, automakers will have under-produced for THREE YEARS . The under-production will amount to about 8 million new vehicles by then. These cars would have fed into the used vehicle market, but they were never built, and the used vehicle market will be under-supplied by these vehicles.

      Even if we eventually see a big wave of repos, these people will still buy a car after the current car is repoed. Do you think that Americans who get their repoed are just going to walk? If you do, you don’t understand Americans. Americans are going to drive, but they’re going drive some cheaper vehicle after the repo. So the repo goes to auction and another used car is sold to that person, and the net balance of used vehicles for sale is the same, the only thing that changed is the composition. It always works that way.

  18. Franz Beckenbauer says:

    It is not strange at all. It is simply a replay of what happened to housing in 2008. With car repossesions rising because people cannot pay their loan any more, supply rises and prices come down. And yes like mortgages in 2007 car loans were packaged and secutitized as ABS. Just one more black swan circling the sky.

  19. Michael Engel says:

    1) Repos are up. Debt service is down to 9% of disposable income. The zombies are not paying interest.
    2) The rich and the upper middle class are buying Tesla and ev horses,
    herding together, imitating each other, creating a bubble.
    3) Pickup trucks are out of class.
    4) The elite politicians are the untithesis of the idle rich. They mingle with
    minorities and blue collar workers hit by the high inflation.
    5) Thou shall not steal. Headbutts to the Bronx, outsmart the brute in VT.
    6) Sam Zell work every day. He doesn’t care about Lyriq.
    Sam Zell isn’t a “wealth aristocrat” desperately selling Crypto on margin calls. Sam Zell isn’t waiting in the back of the line in O’hare airport.
    7) Unemployment is low. Consumer spending hit a new all time high. Co losses are piling because of higher wages, higher energy cost , shortages and other expenses.
    8) If companies dare cut wages it might lead to violent responses, to strikes like Chicago Haymarket strike in 1887. Strikes will be back.

    • Wolf Richter says:

      Michael Engel,

      “1) Repos are up.”

      So I’ll just repeat it here.

      From near zero in 2021 when people used their stimmies to get caught up with their car payments. But repos are STILL HISTORICALLY LOW.

      In Q1, auto-loan delinquencies ticked up from the record low levels in 2021. Repos come well after 30-day delinquencies and are far fewer because a lot of delinquencies get cured when people catch up with their payments. I’ll post Q2 delinquency data when it’s released, to blow these publications that created brainedead clickbait about “exploding repos” out of the water.

      • unamused says:

        Maybe you should make readers pass a test before they can post comments.

        If you really wanted to have fun you could post scores.

        • Michael Engel says:

          my unamused score is “F” : delete/ waiting for confirmation on 70% of my comments.

      • Michael Engel says:

        In recessions, when nothing move, when the parking lots are loaded, delinquencies 30+ are rising.
        In 2022 repo cars can be sold again and again after 30 days, for high turnover and higher profit. New loans quickly replace delinquent loans, charging more.
        source : Wolfstreet

      • Depth Charge says:

        Where can we find actual yearly car repo numbers going back 20 years?

        • Wolf Richter says:

          I give something much better: auto-loan delinquencies. Repo is the final stage, after the delinquency doesn’t get cured. Delinquencies came first. Delinquencies is what you need to pay attention to. You cannot have a repo without first getting a delinquency.

          I also give you third-party collections and consumer bankruptcies.

          All going back 20 years. Q2 coming up in early August, as part of my quarterly consumer credit report.

          I think this time, I will break out auto loans into its own article so it doesn’t get buried in the long consumer credit article. Seems like I need to lean against this repo spike nonsense a little more vigorously.

  20. Clete says:

    Anecdotal: It’s been a couple of weeks since I sold my Infiniti, “profiting” $6K over the lease buyout. We’ve been all over and looked at a lot of ’19-21 supposedly high quality cars. The main dealership where I considered a couple of things told me that they were $2-5K under water on all of their used inventory because they were buying relentlessly over the last six months or so. There were plenty of used cars at most of the dealerships, but they all had something important wrong that needed repair. I’m guessing they aren’t doing repairs until someone expresses interest?

    We settled on a new Subaru Outback with all the bells and/or whistles, with the expectation of keeping it for a decade or more. No AMV markups and no haggling either, so don’t bother asking. The local dealer had zero on the lot, but the salesman called me twice to say that he had one come in (not the trim level we wanted) and if we wanted it, we had to come in right then or somebody else would get it. I decided not to play, and I’m sure he went down his list.

    When we got home, I went online and radiated out from here to see what inventory was around. It wasn’t a rush, but we were ready to go if we found one. I struck out within 50 miles, then went to 75 and spotted the trim we wanted. I called the dealership (this was about 5 p.m.) and was told we were “lucky” because that one was on the lot. To their credit, They did all of the paperwork on the phone and online, so all we had to do the next morning was sign some stuff and drive back. And the kicker: one of the keys was missing because (I assume) one of the other salesmen had snuck it home hoping no one would sell the car before he could. When I mentioned this hypothesis to the sales manager, he said “Either you’re in sales or you’ve managed sales.” Both, as it turns out.

  21. 9339 says:

    I don’t think I have seen it addressed here, but shouldn’t the long-term demand for cars be significantly lower because so many more people are now permanently working from home full- or part-time compared to 2019? This will mean that they drive less because they don’t have to commute to the office, so their cars will last that much longer because they incur lower annual mileage. Also, I would think that with lower miles being driven, the number of cars being lost to crashes has fallen.

    • Wisdom Seeker says:

      Mileage IS down, but not that much, and the persistent high prices and low inventories are saying loud and clear that demand for new vehicles far outstrips supply.

      Work-from-home apparently isn’t that many people, or those people haven’t given up their cars yet (cant WFH every day), or the reduction in demand from lower-mileage cars lasting 20 years is just gonna take a while before it leads to truly lower overall demand.

      Or maybe we’re just not all sure WFH is going to last…

      • Cynical Engineer says:

        Speaking as a WFH: My driving has been reduced to the point where we could get by with only one car. We’ve already agreed that if one of the cars gets totalled, we aren’t going to replace it right now.

        With car prices in the stratosphere, we aren’t planning on getting rid of the second car because that would put us in the position of HAVING to buy a car if our only car gets totalled in an accident.

        I’m seeing 2-year-old used cars sitting on the lots with asking prices higher than the MSRP for the equivalent car brand new. The dealers are definitely pricing to extract the maximum money from the poor sods who need a car Right Now.

  22. Trucker Guy says:

    Wolf, given you experience in the car industry and keeping your ear to the ground on business, where do you see the cars as a subscription service going in the future? From my understanding small cars are only profitable in service fees and maintenance at dealerships. Meanwhile large trucks and SUVs are the main segment making a profit from sales alone. With BMW and Lexus testing subscription services for luxury features and dwindling sales margin profits for auto makers, it seems that the only path for auto makers in the US to maintain high profits is to not sell cars but build some kind of month to month leasing scheme and charge subscription fees. If I recall correctly agriculture manufacturers like John Deere have suggested or implemented a system where you buy their equipment but computers lock you out of repairs. Seems easy to implement a system where they forbid sales, repairs, use, etc without paying your monthly payment.

    Seems substantially more profitable to phase out older cars by making them sellable back to dealers only, charge a monthly fee, and capture the market of used cars by crushing models older than a certain date. Expanding into the EV sector, fuel costs, and emissions standards will push ICE vehicles out of the market in time.

    Washington doesn’t seem likely to protect consumers like the EU because they’ve got to protect the American autos or whatever excuse for big business. We’ve already seen lots of things follow to “live service” model. If you are the type to watch tv you likely have 20 subscriptions on top of cable tv.

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