# New Vehicle Inventory Dips, Near Record Low. Fuel-Efficient Cars Vanish. But Supply of Full-size Pickups & SUVs Rises, Discounting Sets in to Move the Iron

### Average prices jump relentlessly from record to record.

#### By Wolf Richter for WOLF STREET.

Inventories of new vehicles on dealer lots and in transit at the end of July dipped from a month earlier and remain stuck at the same woefully low levels where they’ve been all year that constrain sales, frustrate dealers, and turn off customers. This scarcity continues to push up prices to new highs.

But the mix of those inventories is changing with red-hot demand for fuel efficient vehicles depleting inventories of minivans, sub-compact cars, compact cars, and midsize cars to nothing-on-the-lot levels, while inventories of full-size pickups and SUVs are building, and some brands have reached very high levels, at the top of which are Ram 1500 trucks with a worrisome 88 days’ supply.

By the end of July, there were only 1.09 million new vehicles in inventory on dealer lots or in transit, the lowest since February, and in the same desperately low range all year, according to data from Cox Automotive. This was down by 70% from July 2019! With some vehicle segments essentially sold out, and with inventories building in other segments.

Days’ supply at the end of July declined to 37 days, from 38 days in June, same as in January. By comparison, in 2019, supply averaged 89 days.

Essentially out of stock: Small fuel-efficient vehicles. 20 days’ supply, which includes inventory on the lot and in transit, means that many dealers are essentially out of vehicles when you show up to buy. Here are the top-selling segments with about 20 days’ supply, according to Cox Automotive data:

• Minivans: 20 days
• Mid-size cars (Camry, Accord, Malibu, etc.): 20 days
• Subcompact cars (Accent, Spark, Versa, etc.): 20 days
• Compact car (Civic, Elantra, Corolla, etc.): 24 days

Suddenly plenty of supply: Large vehicles. 50 days’ supply and up. So overall, there is plenty of supply. When supply gets to 70 days or 80 days, there’s too much supply. There’s 88 days’ supply of Ram 1500 pickups.

Some of these segments (pickups especially) were super-hot during the pandemic while fuel prices were low. But this year, fuel prices hit the pain-threshold, and vehicle-purchase preferences adjusted. The top-selling segments with 50 days’ supply or more:

• Full-size SUV (Expedition, Yukon, Wagoneer, etc.): 50 days
• Full-size pickups (Ram 1500 = 88 days, F-150 much tighter): 51 days
• Full-size car (Avalon, Stinger, Chrysler 300, etc.): 61 days

Time for that $10,000-off-MSRP ad for the Ram 1500? Instead of these obnoxious MSRP-plus-addendum prices? Oops, already happening. Results may vary, but I just checked at one of my local Ram dealers, and they had five Ram 1500 Quad Cabs and Crew Cabs in stock, model year 2022, and after various factory and dealer discounts and rebates, the advertised price was$3,000 to $9,000 below MSRP. That part is back to normal. Sales handicapped by shortages of what’s in demand. Supply is a function of inventories and sales. By the end of July, inventories were very low overall, but there were essentially no inventories of fuel-efficient cars that are suddenly in high demand, while inventories of pickup trucks and full-size SUVs are building, as demand has weakened. So overall inventories were very low, and sales were horribly low, handicapped by this weird mix of inventory shortages and wrong inventories. Shortages of specific microcontrollers and semiconductors that the auto industry uses for mundane things on a vehicle continue to dog production and trigger plan shutdowns and production cuts. The industry has attempted to keep plants running by building vehicles with some components missing and putting them on storage lots until the missing component arrives. For example, at the end of June, GM had 95,000 unfinished vehicles on storage lots. That would represent 8% of total sales in July that didn’t happen because the vehicles, though built, weren’t finished and couldn’t be sold. There is starting to be a glut of chips that are used in crypto mining rigs, PCs, and smartphones – but they’re not the specialized chips and microcontrollers that automakers are using. Only 1.128 million vehicles were sold in July, according to data from the Bureau of Economic Analysis. Compared to July last year, when inventories were already a problem, sales were down by 12%. Compared to July 2019, when there was plenty of inventory, sales were down by 19%. These are sales levels first seen in the 1970s – horrible sales in a horribly mature industry dogged by inventory shortages: Average prices keep jumping from record to record. The average transaction price jumped by 12% year-over-year to a record$48,182 in July. The average listing price jumped by 11% year-over-year to a record $46,400, according to Cox Automotive data. In dollar terms, over the past 12 months, the average listing price jumped by$4,600; and over the past 24 months, it jumped by $8,159. These kinds of price increases, on top of already very high prices, are crazy when you think about it. And eventually, people are going to think about it, but not yet apparently. Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how: Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here. ## 193 comments for “New Vehicle Inventory Dips, Near Record Low. Fuel-Efficient Cars Vanish. But Supply of Full-size Pickups & SUVs Rises, Discounting Sets in to Move the Iron” 1. Sporkfed says: Plan ahead. Buy a vehicle you can live in. • Wolf Richter says: Nah. Buy a vehicle you can afford, and that does what you need it to do. • Nunya says: We just got back from vacation. We needed a rental that could fit 7 plus luggage. Reserved a Ford Expedition, ended up getting a 2022 GMC Yukon Denali, loded to the t!ts. Wife liked it, asked why I’ve never mentioned it. I asked her to look it up and build it as we got it.$81K.

It’s nice, but not $81K nice. You could live in that thing. Our 10 year old Pilot does the job like Wolf says, but it lacks pizzaz. Again, pizzaz doesn’t seem to be worth$81K. Replacement cost for our Pilot as a brand new car would be $40K. Most people would agree buying two SUVs seems kind of stupid when you only need one. Different strokes for different folks. • Djreef says: Don’t need a car, don’t buy a car. Esp when they’ll be much cheaper in a year or two. • Degobah Smith says: Just to riff a bit on that… We moved to downtown Savannah a little over three years ago. Sold the wheels in SoCal when we left. We’ve been without a car since then and I love it. No maintenance, payment, insurance, etc. Public transport is great and free (at least in the downtown area), and there’s Uber for where it doesn’t go, and there are rentals or Turo for longer trips. Walking (1 mile) to the grocery store with my little trolley a couple of times a week keeps me fit. Caveat – I work from home so it works for me. Point is, carless is neato if you can swing it. Just sayin’. • deplora beau says: Loathe carlessness. Hate cycling WFH. Hate public transport. Devil created Uber. Good cars won’t be made anymore. Gasoline cylinders with a stick and a hammock. Ghetto blaster. Pod racers. RIP — Big data and advertising space. — • RockHard says: I have to wonder about the minivan numbers. I used to own one and that was not what I’d call fuel efficient (20 mpg overall). Can’t beat it if you have to haul a lot of people or stuff though. When I sold mine one of the potential buyers did camper conversions. • Nunya says: Minivan fits the people, but not the luggage. • Shiloh1 says: My only exposure to modern minivans over the last several years has been by rentals. The Caravans had the mid row and back seats which can disappear in the floor. • Lili Von Schtupp says: You can’t find a Toyota Sienna or Honda Oddessy anywhere here. Carvana, maybe, but aside from their insane prices you couldn’t pay me to drive a used minivan with no warranty. With the dogs and kids’ sports and camping trips, I finally decided a compact SUV wasn’t working, shelved my ego and checked out minivans a few months ago. Notta. Local Toyota dealers all said they’re sold out and orders are going well into next year. Even old Honda Elements are still going for a premium with over 200k miles on them. • Rick Vincent says: The Ford Escape seems to be a lot better quality than it was a few years ago. Maybe check one of those out. • Greg Hamilton says: Rock, Apparently a lot of self employed who used to buy pickups are now buying minivans. I’ve been seeing many handyman types with overloaded minivans working on houses in my area. If you don’t need to tow a minivan is an economical replacement for a pickup. Also they get much better mileage than an SUV with similar sized interior dimensions. Even Chrysler Pacificas are in short supply–especially the plug-in hybrids. • Harvey Mushman says: Yep, my cousin up the PNW (Port Angeles/Port Townsend) is self employed doing home remodels. He works out of an Astro Van. • Seb says: Hahaha.. you can live in a car but you can’t drive a house!🤣😂 On a serious note, that’s terrible advice. If a couple years down the line you find yourself unable to pay for a roof over your head you’re probably not making car payments either and your driveable “home” will end up repossessed lol. • Old school says: I think you can finance the camper vans for 15 years so some people buy a monthly payment and hit the road. • Clete says: Gotta turn off all the ‘location services’ apps so the repo man can’t track you. • otishertz says: Buy an old car that is easy to work on and save on parts, insurance, and interest expense. So many amazing analog old cars to be had out there for a song and a dance. If you can build a PC you can fix an old car. With a new car you need a PC to tell you what’s wrong with it. If you have all the money in the world get a Hummer EV and a personal trainer. Average people can get on down the road just fine with a carburetor. • Trucker Guy says: I wish I was in the same position for housing as I am for cars. I drive a 40 year old beater truck and have a cheap motorcycle to get around on to save gas. I wish you could get a cut rate beater house for next to nothing and fix it up. Maybe someday. A fancy vehicle is such a massive waste of money. • VintageVNvet says: Keep your cash ready TG: Last time around this kinda scenario, a good friend was working for a guy who bought houses for$3 to $5,000.00 at the courthouse steps in flyoverstan… Friend fixed whatever wasn’t working and usually did a total paint job and the guy sold them for$20-30K or rented them and refinanced them to go buy another.
It was a ”side gig” for both of them.
Houses were, per your request,,, ”beater houses.”
Just don’t jump too soon, as some of us have done in the past, eh?

• MostNon-Triumphant says:

You stole my idea!

I did spring for a nice (used) motorcycle that I get compliments on.

I like carbureted bikes, but fuel injection is where its at considering they are monkeying with the gas.

That and disc brakes. Drum brakes at high speeds is scurry

2. Oldpaperboy says:

Just wait until the vehicle is in stock…About a year from now…

3. Valerie in Australia says:

All I can say is “good!” I’m sick of these gas guzzlers hogging up the road, parking lots and school pick- ups. They use up more than their fair share of a finite resource. It’s about time the chickens came home to roost.

• historicus says:

Lithium is a finite resource.

• historicus says:

The world could face lithium shortages by 2025, the International Energy Agency (IEA) says

• Apple says:

Lithium can be recycled.

• Anthony A. says:

“Lithium can be recycled.”

Not easily or cost effectively recycled if it’s bound up in batteries. Only a few plants have been built to even attempt this.

• Wolf Richter says:

Anthony,

There hasn’t been enough supply of 8-10-year old EV batteries for recycling because there were hardly any EVs sold back then. So you don’t need lots of plants to recycle them. This is going to ramp up slowly, as these old batteries are taken out of use.

More interestingly, utilities are starting to RE-USE the old EV batteries for the grid. These batteries don’t need to be top notch because they stack them, and space and weight are not an issue. Utility-scale battery installations can be used to deal with demand spikes and other purposes. But what folks are now figuring out is that they can use utility scale battery installation to arbitrage electricity prices, charging the batteries (buying electricity) when prices are low and selling the electricity when prices spike. This is apparently a very profitable business – and somewhat unexpected. And it’s becoming the dominant use of batteries in the grid. The EIA did a report on it recently. And that’s where old EV batteries will be going. And they’ll be making someone some money :-]

And after utilities are done with the old EV batteries, they’re headed to the recycler. So this is many years after the EV was first produced.

• historicus says:

“Lithium can be recycled“

so you are saying the IEA didnt factor this in but you noticed
you should let them know

• Wolf Richter says:

historicus,

People have been talking about the “lithium shortage” off and on since 2015. And production keeps rising as needed.

A high price solves all this. Eventually the lithium shortage talk will end in a lithium glut, and the price will collapse.

It did that before, most recently between Nov 2017 and May 2020, when the price of lithium collapsed by 84%.

• Anthony A. says:

Wolf, good to know about lithium battery REUSE. Recycling to recover lithium metal was what I was referring to, which has been proven to be difficult from spent batteries. Maybe as time and research goes on, a viable solution will surface.

If there is a big movement to reuse EV (and other large) batteries with some loss of capacity for the EV, that will sure help create a good business and help solve some problems. Home and some commercial solar systems can benefit from battery storage for night use when the panels can’t produce.

• historicus says:

” utilities are starting to RE-USE the old EV batteries for the grid.”

More uses equals more demand. And alternate uses mean less recycled for EV use, IMO.
I don’t doubt what you are saying regarding grid backup use for old EV batteries is accurate, but it is tough to imagine all those batteries stacked up and daisy chained into the grid.
That would be quite the fire hazard.
Maybe the Bitcoin miners could use the old EV batteries for their power needs? That would be quite a marriage of industries.

• rick m says:

The telephone company used to give their old batteries away. Even at over 400 lbs per two-volt cell and just 20% Ah available, plenty of free energy storage. No more 90volt square wave ringer, no more free batteries.

• rick m says:

historicus – you’re quite right about the hazards of banked batteries. Differing internal impedances makes charge/discharge management interesting. The available short-circuit current(contact welding potential) available in a battery storage system dwarfs that of residential electrical utility service. Technicians who value their eyes wear safety glasses and a face shield around big batteries.

• curiouscat says:

At least litium is no long wasted by putting it in 7Up.

• Cytotoxic says:

Wolf I am fascinated by this use of old-EV for electrical grid arbitration! Where did you hear this from? I don’t doubt you I’m just very interested in the subject.

• Wolf Richter says:

Cytotoxic,

Yes, fascinating. I get this stuff directly from the EIA in my email :-]

This one is titled: “Battery systems on the U.S. power grid are increasingly used to respond to price.”

https://www.eia.gov/todayinenergy/detail.php?id=53199&src=email

I underlined “price arbitrage” in red; red arrow is also mine (click on the chart to expand):

• jm says:

Petroleum is a finite resource, and not recyclable by any technology.

An atmosphere with a carbon dioxide level that does not cause disastrous changes in climate is a finite resource, and not restorable by any economically practical technology.

A number of battery technologies using materials much more common than lithium, sodium in particular, will be successfully developed long before we run out of lithium.

There are other energy storage technologies for non-vehicular use.

Climate change is not just a matter of slightly higher temperatures. Every degree centigrade of temperature rise increases the moisture-holding ability of air by 5+%. This increases its ability to dry out the land over which it passes, exacerbating drought, while simultaneously increasing the amount of water it can dump as rain. All around the world, floods of the kind that just hit Kentucky are now no longer rare events.

The climates based on which the world has organized its economies and patterns of habitation are a finite resource.

• Cytotoxic says:

….you do realize the lithium batteries do not generate electricity right? They store it…the electricity has to be generated.\

So lowering carbon emissions requires a reliable source of clean energy ie nuclear (and nothing else besides maybe boron fusion). Is there a rule that this has to be used to charge up EV batteries in cars as opposed to creating fuel out of the carbon and water in the air itself? There’s been advances in catalysis of that process very recently. With a cheap and abundant central energy source, it could perhaps be more sensible than EV. New carbon-neutral non-fossil fossil fuels!

• Happy1 says:

Flooding is a regular event and has been for millennia. Your assertion that this has increased recently due to man made climate change is not supported by facts. You and your ilk ascribe every weather event to climate change. This is not science it is anecdote.

• Jach von Dee says:

So is crude oil.

• John says:

More and more electric cars, more and more fat people climbing into them.

• Gomp says:

Can’t ride a chicken without a saddle.

• Harvey Mushman says:

Haha!!!
I don’t know what that means, but I like it!

• DawnsEarlyLight says:

I think it has to do with…..roosters🐓

• otishertz says:

Serious question; how do lithium batteries get recycled? Looking at the schematic of a lithium battery shows multiple layers of dissimilar metals and dielectric materials. Can you just put batteries in a smelter?

There are hazard warnings on batteries and documentation that comes with batteries to “dispose properly” and not in the trash. How does this work? Because lithium and other rare earth mining is horrifying for the environment and the health of the miners who are trapped in corporate slavery/freedom where it is mined.

“Lithium in tap water may cut dementia” according to the BBC. So, that’s one way to recycle it.

Where can I buy a recycled battery?

• Wolf Richter says:

“Where can I buy a recycled battery?”

You misunderstand. You recycle the battery to extract lithium and other materials (battery ceases to exist as battery).

• jm says:

Lithium is, chemically, about as far from being a rare earth as an element can be. Most lithium comes from underground salt deposits left behind when ancient seas and salt lakes dried out many millions of years ago. It’s mined by the same methods used to “mine” other salts. The lithium salts are extracted along with the others by pumping water through the deposits to dissolve them. In China they pump out water containing lithium salts from deep aquifers under the Gobi desert. Very little human labor involved. Some environmental issues, but most of these deposits are by their very nature in deserts, so not many people impacted.

https://www.volkswagenag.com/en/news/stories/2020/03/lithium-mining-what-you-should-know-about-the-contentious-issue.html#

• Christopher Burrell says:

There is nothing environmentally sound about the process of mining lithium. It is estimated that for every tonne of lithium mined it produces 15 tonnes of CO2 emissions. It has been estimated that for every model 3 Tesla battery produced it emits 3 to 16 tonnes of CO2 pollution. Not to mention the other heavy metals and toxic elements that contaminated the soil and waterways near the extraction sites. Also, there is massive amounts of water used at extraction sites to mine the lithium. Using massive amount of the earths most precious resource for life: water, to make batteries. IMHO batteries can only be a stop gap for a time, until we can come up with a more efficient and superior way to generate power for a vehicle. Anyone that thinks batteries are environmentally friendly and sound is only deluding themselves, and saying they aren’t as bad as oil isn’t really saying much.

• Wolf Richter says:

Christopher Burrell,

Why don’t you people add up the tons of CO2 emissions that occur during the production of ICE vehicles??? A V-6 ICE power train (500-700 pounds including cooling, exhaust, etc.) is a mix of aluminum, steel, cast iron, precious metals, etc., all of which are based on mined metals whose mining, processing, transportation, and production into parts produces lots of carbon emissions.

PLUS, there are 6 pounds of carbon in a gallon of gasoline. Over an ICE vehicle’s 300,000-mile life, at an average 30 mpg, the vehicle consumes 10,000 gallons of gasoline (x$3 a gallon =$30,000, BTW), which contain 27 metric tonnes of carbon, which went out the exhaust system into the air over the life of the vehicle.

There is nothing environmentally sound about ICE vehicles, and about the mining and processing of the metals that go into them. If you want to do something environmentally sound, DON’T BUY A VEHICLE.

I’m so tired of this cherry-picked BS.

• SomethingStinks says:

Yeah cause tesla runs on pure air and a gwaddamn poem.

4. David Hall says:

There is a chip shortage. It is supposed to be worse in America than other areas, except in Russia where they can not import cars or auto parts.

The U.S. is supposed to get new chips supplied later this year or the next, if production is delayed. There are new inventions demanding chips. Autonomous vehicles, driver assist systems, and robotics need more chips.

• Harvey Mushman says:

An article came out earlier in the week about the semiconductor maker “Micron”. They specialize in memory chips. They are saying that there is a fall in demand. I have a suspicion that we will hear more about this.

• Ed C says:

Memory chips are used primary in PC’s and graphics cards. Demand for those have dropped off. My PC is five years old and I see no reason to get a new one.

• Wolf Richter says:

Harvey Mushman,

Fall in demand: PCs, smartphones, crypto mining rigs.

Consumers loaded up during the pandemic, they all have what they want. And now cryptos crashed. It’s very specific. They all said that: Micron, NVIDIA, etc.

• otishertz says:

I was recently forced to replace my perfectly good Xiaomi phone and replace hardware (through an approved installer) on the perfectly good Viper Smartstart GPS security and remote control system on my car because the perfectly good 3g systems are “no longer supported.”

That’s forced demand creation right there.

With forced demand it is you that is faced with a demand. Upgrade or you get bricked. Corporations that need money demand you Upgrade or be obsoleted.

• otishertz says:

… my 54 year old car…

Now needs an upgrade on the bought and paid for security system with an ensuing perpetual payment.

• SomethingStinks says:

I know what you mean… guess what other major manufacturer(s) forces you into manfatory security upgrades via OTA updates that kills battery life and performance. It will be hilarious if cars with OTA updates encounter this… no that can’t happen, these are such splendid upstanding corporations with customer service as their top priority!! \end rant.

• Depth Charge says:

“Upgrade or be obsoleted…”

Designed obsolescence is about as environmentally unfriendly and UN-green as you can get, BUT CRICKETS. This whole “climate change” sham is just that. If they were serious, they would force manufacturers to build serviceable products instead of landfill waste.

• Ed C says:

Russian car production is down 80%. They depend on Western parts, of which integrated circuits (chips in the vernacular) are only a subset. Retired now but I was an engineer. I would design circuit boards for test equipment and order IC’s (my preferred term; chips remind me of potato chips) for those. If it was in stock in Digikey I would design it in. Never a problem getting them, of course my needs were low volume. The IC (OK chip) shortage is a mystery to me.

• Hardigatti says:

Industrial ICs typically use older fab technologies maybe a couple of generations behind the leading edge or more. A good way to squeeze out a few more dollars from an obsolete fab.
The main problem is that there is little profit to be made on these ICs. Intel or TMSC would like to see 50%+ gross margins after investing $5B in a state of the art fab. One could port the designs of these old microcontrollers to the new fabs but their price would go up 5x. • jm says: The chip technologies for which the new fabs are purposed operate at much lower voltages than those of the older fab technologies, and have different electrical characteristics. For vehicular applications in particular, parts and assemblies must undergo much testing to prove they can withstand the harsh vehicular environment (e.g., very wide temperature range). Just replicating the logic functions is not enough. • unamused says: “There are new inventions demanding chips. Autonomous vehicles, driver assist systems, and robotics need more chips.” Solutions in search of problems that have to be invented. Gadgets that are no doubt profitable, except for failed hype-‘n-hoopla financializationistas, do nothing for quality of life. I’m bored with gadgets, do not need a refrigerator that aggregates my data and sells it to con artists, er, malicious marketing guys, and don’t want to get into arguments with a neurotic device about opening the damn pod bay doors. • Cytotoxic says: We get it: you’re old. Go yell at a cloud somewhere else, I want my drone-delivered pizza. • Bruce A Forbes says: But…..global warming!!! • Happy1 says: Amen to that. I dread the day that largely analog vehicles are not available. • Anthony says: Of course they can, eventually…. When have sanctions actually worked…. The black market always works, plus they have a 1000 mile border with the worlds biggest car producer, China…. 5. NoBadCake (formerly Mark_2) says: We all (esp. the West) need to use less [list of everything here]. : ) • Joey says: Just cut out all wealthy people’s mansions, yachts, private jets, and other obscene consumption. Until then I ain’t eating no bugz. 6. smashsc says: Just listened to a “Boots on the Ground” report where a correspondent said their vehicle manufacturing plant shutdown for a day because there was NO PLACE TO PARK THE VEHICLES that would’ve been produced. The report indicated there is work underway to create another parking lot for, I think 10,000 vehicles. Guess those chips aren’t showing up soon. • Wolf Richter says: Make sure to add that these are UNFINISHED VEHICLES waiting for components. At the end of June, GM hat 95,000 UNFINISHED vehicles parked on storage lots waiting for components. Other automakers did the same. There are hundreds of thousands of unfinished vehicles parked on storage lots in the US waiting for components. They do this to keep their plants running. This chip shortage is still creating a huge mess. • Matthew Scott says: So can we imagine a point where it tips the other way and we see a sudden glut of cars once chip production catches up? • Wolf Richter says: Yes, I’m waiting for it. But by now, something like 3-4 million consumers that would have bought a new vehicle since the summer of 2021 didn’t because they couldn’t find what they wanted to buy and decided to out-wait this mess. If this goes on for another year, there will be something like 7 million people that are eager to buy a new vehicle, that would have bought one but didn’t. This is in addition to whatever other demand there will be. My gut feeling is that automakers will be making vehicles for which there is not enough demand when supply starts catching up, but will be short on vehicles for which there is lots of demand. So I think this is going to be messy even as the chip shortages wane. • Rob says: This sounds a lot like what happened with what happened / is happening to new home construction projects which wolf’s written extensively about. I wonder if we could see parallels in softening demand. Wolf, could the “unmet demand” level for new vehicles be picked at the way folks do what’s been commonly used to help prop up RE bubble? Anecdote , but we will need a “new” car but not something off a lot. Something like a high end RAV4 but a year or two old from when the recession is really underway. New for us seems like an extravagance, we’d rather put any extra into picking up the best home we possibly can. Fwiw, I’m hoping this binge buying of overpriced new vehicles + a glut of suddenly complete new vehicles leads to massive downward pressure on great uses cars. • Franz Beckenbauer says: That’a what you get from turning a vehicle into a Tamagotchi. 7. Anthony A. says: Used cars are piling up on lots around here. One public “park and sell” lot near me is jam packed with pickup trucks and large SUVs. And they are just sitting there from day to day. Chrysler/Dodge/Ram dealer is pounding the TV ad time with deals below MSRP like Wolf says above. It’s gong to get interesting if we slide into a recession. • JohnnySacks says: I remember the late 70s gas crisis, couldn’t sell them for 50 cents on the dollar. Can’t believe so many wage slaves bought them in the first place. History will repeat itself with Corolla and Civic being in demand and sold over MSRP. Meanwhile, warning light on in our 2008 and freaking out about having to find a Corolla or Camry. Need to hang on for a while, fingers crossed. • El Katz says: I just glued together a 100K plus ’06 Civic for my daughter to use as a sacrificial car in the LAX parking lot. Your Corolla has lots of life left in it. Buy a code reader and, if you’re the least bit handy, you will likely find what is wrong with it. It can be something as simple as a gas cap that sets off the CEL. Or a leaky vacuum hose. CEL’s (the money light) doesn’t always predict a catastrophe. The first thing I did with her “find” was to replace all the cheap bits (radiator cap, oil, hoses, thermostat, gas cap, filters, etc..) and spent a day doing that. The interior was a hazmat site. Replaced the schrader valves on the A/C and had it recharged. New tires, brakes, rotors, bled the brakes, fresh oil, coolant, belts, ran a tank of Shell premium through it…. About$1,600 worth of bits and a week’s work and it runs like it’s on rails. Still looks like a hooptie, but you can’t make it too nice or it will get stolen. She bought the car from a friend for $500…. she’s been offered$6K for it.

• Anthony A. says:

We are heading for the old days when Honda Civics were the most stolen car and F150’s were the least stolen. LOL

• Djreef says:

I plan on dropping $3-$5 grand on my 2006 Expedition at the beginning of next year. It’ll be at 200,000 miles so it need another tune up plus other stuff. It only gets 18 miles per gallon, but I love that thing, so I don’t mind ponying up for gas. It only gets 2-3 days use per week, so it’s not a big deal. I figure this will give me another 3-5 years of use before it’s really ready for the junk pile.

But then, you never know.

• RockHard says:

Anthony, in my area at least Kia is the most stolen brand, partly because the keyless start is easy to hack, but also because there’s a lot of demand for less expensive cars.

• Ed C says:

Get one of those code readers for $40 and interrogate the system to see what it is squawking about. I hope it is an easy and cheap fix. • Harvey Mushman says: If you drive your car to AutoZone, they will loan you the code reader (FREE) and you can get the code right there in the parking lot. • El Katz says: Harvey: The code reader Autozone uses is designed to sell you parts. If you look at the readout, it’s not really diagnostic output but a sheet from a computer in the store that outlines the defaults and parts needed for the repair. At least that’s how the one given me was arranged. There’s many inexpensive code readers available that are far more capable (and less restrictive). • Educated but Poor Millennial says: Bought one OBD2 reader/scanner with blue tooth option for$5 from aliexpress and downloaded an free app so can read the code.

( OBD Auto Doctor is reliable app)

LOL forget paying extra.

• Flea says:

Go to autozone they will do a plug and play = tell u what the problem is

• Ccat says:

Oooohhhh! Will do that. I recently spent $175 to get the local dealer to test my pickup, but they wouldn’t give me the part number to fix it, even though its what I asked for up front. Instead, they gave me an$850 estimate to fix it. I’m angry. I could go on.

Thanks to all for the tip.

Ccat

• Mendocino Coast says:

I was a Smog Inspector for Chevrolet at one time let me tell you
about code readers and why then have FREE TESTING .
Code readers most often only give a general area of concern
and often give a generalized guess about whats wrong not an exact cause .A simple Vacuum Line leaking or off may suggest you need to buy a $89 to$300 Part ,I have seen this time after time again for years .I good Smog worker defines the Area of concern then starts with the simple stuff just testing Visually
A Place Like Auto Zone sells you the part the code reader says
and you can’t return it because its used now .When you say you found a Simple fix like 3inches of bad Vacuum line they don’t reply because they don’t know any thing about cars they just SELL PARTS > like a Catalytic converter for example.
Be forewarned

• Space Cowboy says:

While the chip shortage existed and gas prices were low, traditional manufacturers loaded up on the more profitable high margin trucks and SUVs in order to maximize their return on the limited supply of available chips. Why waste chips on lower margin compacts and sedans when you can make more money elsewhere?

This kept them afloat while hiding the fact that they could not compete in the energy efficient vehicle market that was being taken over by the likes of Tesla.

Now that gasoline prices have risen and the tide has gone out, they’re product line weakness has been exposed.

Why should millions of inventory cars on lots throughout the country, comprising 20% of annual vehicles sold be considered desirable when Tesla has a multi-month backlog and near zero inventory on hand?

The internal combustion engine manufacturer/dealer model will be collapsing under its own prodigious weight over the coming years.

• 91B20 1stCav (AUS) says:

Mendo-well-said. The transition of ‘trained mechanic’ (formal and/or self) to ‘parts changer’ under the imprimatur of ‘technician’ has been going on for at least two decades, now, by my count…

a story from the moto-shop i’ve told before:

back in the early aughts i was the parts manager at a successful independent. our service manager left for a week’s vacation and i was tasked (more because of my age/experience than actual expertise) with keeping an eye on a new potential hire from the front-running moto-trade school at the time. one of our customers brought in his 500-4 Honda for its annual tuneup. as it was well cared-for by its owner, i thought it would be a good starting point to evaluate the new guy’s chops. later that afternoon, the poor, embarrassed kid came to me and confessed he didn’t understand how the 500’s ignition timing worked-turns out the trade school only dealt with machines less than ten years old (so virtually everything he’d learned on was ‘electronic’), but worse, didn’t teach the basics of battery-coil-points-condenser-mechanical advance ignitions (thank the stars we weren’t dealing with a magneto…). i think we finally got him clued in by the end of the day.

he moved on soon after for a dealership known for (wait for it) not accepting service work on any machine older than ten years-including their own brand…

may we all find a better day.

• Geo says:

Disconnect the battery and wait a week. Reconnect.

• unamused says:

“It’s gong to get interesting if we slide into a recession.”

It’s going to get interesting as you slide into a recession, and not in a good way.

• Anthony A. says:

unamused, what makes you think I have any possibility of sliding into a recession in a bad way? Do you know something about my situation?

• unamused says:

You’re not a national economy, so you can’t slide into a recession, but your weren’t referring to yourself, were you? You can slide your statement from ‘we’ to ‘I’ by moving the goalposts, but the economy will not avoid a recession with wordplay.

• DawnsEarlyLight says:

Life is a harsh mistress. 😏

Sorry Heinlein!

• Wolf Richter says:

Anthony,

Yes, there is plenty of supply of used vehicles. Sales are down about 15% from 2021; prices have spiked, and a buyers’ strike has set in. But dealers are slow in cutting prices because there aren’t a lot of used vehicles coming through the wholesale market because new vehicle production has been so slow, and rental fleets are keeping their units longer. It’s this sort of complex interplay.

Days’ supply is above the 2019 average:

• VintageVNvet says:

OF course it is AA:
”Last time” we had these conditions in RE and auto mkts,
WE, in this case the family WE, bought a brand new pick up truck for less than HALF the MSRP…
And according to what I read here on Wolf’s Wonder,,, as in wonderful information,
NOW, WE, in this case WE pick up buyers, will see that kind of pricing again,,, and perhaps a bit sooner in the ”cycle” ,,, ”This Time”…
OF COURSE it’s different this time,,, as “IT” is always different every time,,, LOL
But clearly only different in the ”details” where some would tell US ”the devil dwells”…

8. JRH says:

Flash backs of the early ’80’s. Cars got small, lighter and absolutely ugly. In some cases dangerously so.

But I’ll still drive my F350. Why? Because I need a 4wd on logging trails year around. I must be evil. Yup. Where does your lumber and livestock come from city boy? There won’t any working EVs around here.

• Wolf Richter says:

JRH,

“Where does your lumber and livestock come from city boy?”

Thank god we’re all different. Otherwise we’d all be doing the same thing and trying to drive the same thing.

So as reminder: Without us “city boys,” there wouldn’t be this website, or any of the other websites, and you wouldn’t be able to make your comment known to thousands of people. You’d have to go to your local bar and tell the two people next to you.

• perpetual perp says:

love that

• HowNow says:

me too

• Gabriel Fontana says:

Hmmm….lumber builds houses and livestock feed people. City boys don’t feed the masses and put roofs over their heads.

• Wolf Richter says:

Gabriel Fontana,

Without these city boys, who would you sell this lumber and livestock to? To yourself? To your neighbor? You wouldn’t even have at truck without city boys, you’d be on a horse. And you wouldn’t have a gun either. And there would be no electricity without the city boys that over the past centuries developed the technology. You’d have nearly nothing of modern life without the city boys. So that’s the trade: the city boys make the trucks, guns, equipment, washers and dryers, the tech that you need to post this idiotic comment, etc. etc., and the city boys pay you money for your lumber and your ag products so you don’t have to live in the abject poverty of subsistence farming. That has been the trade for a very long time. And it’s mostly working pretty well.

• Cytotoxic says:

Thank you Wolf. I’d add the ‘city folk’ are paying for various subsidies these faux-individualist tough guys of the country are quietly entitled too. Regardless, they are ever more obsolete with each passing year.

• Cytotoxic says:

Australia: we get it. You have a huge chip on your shoulder and are very proud of your ignorance and strawmen. Don’t really care to be honest.

• 91B20 1stCav (AUS) says:

careful, Wolf, you’ll be shaking the foundations of country music…

may we all find a better day.

• Harvey Mushman says:

“Where does your lumber and livestock come from city boy? There won’t any working EVs around here.”

You couldn’t be more wrong!
Checkout these EVs. They would crush your F350 like a beer can. This company is right down the street from me.

• DawnsEarlyLight says:

Awesome!

• Ccat says:

I have long driven f250 diesels. I am a farmer. But you gotta realize that all that lumber is delivered to city boys, long haul, by electric trains and (soon to be) electric Semi trucks.

You use what works: sometimes that is electricity.

Ccat

• VintageVNvet says:

Good one Ccat!!!
SO similar to every other ”MAJOR” manufacturing operation of any and every type, as well as ”construction” where cost effective efficiency is the ONLY,,, repeat, ONLY long term consideration.
WE, in this case the construction companies WE,
that I have worked for as employee and contractor for ”professional services” for the last 40 years or so have always,,, ALWAYS!! looked at the very bottom line of costs, as should every company, no matter if ”corporation, sole proprietor, or any of the clearly more likely to succeed options ‘this time”’
EVs now and continuing will eventually come to dominate every aspect of manufacturing, and a lot sooner than later…

• 91B20 1stCav (AUS) says:

“…i don’t like dictators, but the whole country should be run by electricity…” Woody Guthrie

may we all find a better day.

• Jeff says:

Who is complaining about lumberjacks or ranchers driving F350s?

9. dao says:

Manufacturers stopped selling small cars in the U.S. a couple years ago. Not because fuel efficiency was out of style but because the primary buyers were lower income and they could no longer afford them (Honda Fit was $19K-20K by 2020). Anyone remember Scion? It was Toyota’s effort to appeal to the younger generations with funky reliable low cost cars. Turns out it was the middle aged and seniors buying them up. The young people couldn’t afford them and the brand was phased out after the Great Recession hit. • El Katz says: Scion: There were two on my street. Both driven by kids – one in H.S. and the other in junior college. Scion was an attempt by Toyota to build a “third channel”, with a required separate showroom (like Mini and BMW) but the project was not viable for the dealer (not enough gross to justify the expense and sales people hated them because every deal was a “mini” deal). The Scions were then mixed with Toyotas (remember the Echo?) on the showroom floor and created customer confusion….. add to that the costs associated with the support of a third channel of parts / advertising, etc., . The rest is history. Honda had the Element (aka “the toaster”). It was originally intended to be a car for the young adventurer, with an interior that could be cleaned with a hose (of course, someone forgot to tell the engineers who put computers underneath the front seats….). It was commandeered by the dog folks (and geezers) as it was pet friendly. Went through several trim iterations only to be abandoned after one product cycle. Fit is still being built, but not sold in the U.S.. Production going to South America (made in Mexico). HRV grew and is still available in North America (based on Fit). Many of the vehicles shipped from Salaya, MX to North America suffer huge damage (broken glass, stolen batteries, stolen tires, bullet holes, people sleeping in them and using them for outhouses) despite the guards on the rail cars (bribed by the cartels), locked and enclosed rail cars (they cut holes in them), and promises from Mexican authorities to have the Federales protect the cargo. It is a study in what NOT to do as they have to be “reworked” when they arrive in the States. The issue is not the affordability for youth. It is that no one wanted the stripper trim. Due to customer demand, the trims went upscale and so did the price. I guess plastic hubcaps weren’t cool. How many hooptie Civics do you see with rims that cost more than they paid for the entire car? Young people not being able to afford a new vehicle is nothing new – unless daddy stroked a check. I’ll bet that there’s many a story of folks on here describing their duct-tape-and-baling-wired-together scheiss kiste that they drove as a youth. Small, cheap, low content cars do not sell in the U.S.. Never have. Those that did, sold to geezers. Plus the government mandated safety features (backup cameras, ABS, emissions, etc.,) make it difficult to hit a price point. • unamused says: “Small, cheap, low content cars do not sell in the U.S.. Never have. ” The Honda Civic (8 million) and Volkswagen Beetle (4.7 million) say you’re spreading disinformation, but then, your entire comment is a collection of weird conspiracy theories about economy cars. • El Katz says: unamused: Honda Civics are not low content cars. Haven’t been since the early 1980’s. The Beetle in its recent format is not a low content car. The air cooled version was, but it hasn’t been sold in the United States for decades (1979) because they were unsuitable for American roads (pollution standards, highway engine performance, and crashworthiness to name a few reasons) and the cost to bring them up to such standards wasn’t economically feasible and still retain the price point. The “cheap” VW you describe would currently cost about$17,000 in today’s inflated dollars.

Limit your condescension, puffery, pontificating and sophomoric comments to topics you have a modicum of knowledge about – not gleaned from wikipedia.

PS: I worked in the auto industry during the study of the viability of “third channels” in the early 2000’s when it was all the rage. The Toyota brand was the first channel. Lexus was the second channel. Scion was to be the third channel, but was not profitable and the product overlap was it’s demise. The masked intent of those third channels was to get around the dealer franchise laws by adding an additional franchise – which allowed more outlets in metropolitan areas and expanded the network of dealerships. The dealers had a hand in killing it due to the investment required vs. low return.

Conspiracy theory my _ _ _.

• VintageVNvet says:

Other than IMHO your quantity on the VW bug is very low una,,, I agree, like totally dude or dudette…
Worked up many years ago, from a $100 first purchase, total cost, ’53 bug many years ago, and without any new cash, to a one year old ’67 ”bug” that made about ”$a grand” net above the last one, when sold…
Wish I still had the first one, now apparently worth north of $60K, but SO cute with the arms that came out to signal turns and the split rear window… And SO IT GOES,, per K Vonnegut,,, eh • Happy1 says: I would like to see a return of the Honda Fit and Toyota Tercel. • Lili Von Schtupp says: The Element absolutely was unaffordable to its target audience, long known to be why it tanked. Great car, total beast in the snow and perfect for dogs. And a complete nightmare for anyone trying to, say, access the back seat with an infant carrier, unless you got lucky and find an end space with no hedges so you could open the doors. Who doesn’t love parking in the grocery store’s No Man’s Land with infants in tow praying someone doesn’t park next to you blocking you from the back seat? An adventure with every shopping trip. On a fresh section, I had to leave one half of the back seat flipped up and crawl the baby/ carrier in through the trunk. Popped positive with Thing 2 & had enough, the beloved Element went bye-bye. Eliminating young families meant the car was most practical to either late teens/early twenties, or middle age on up. Guess which generation could most easily afford a$23k car in 2007?

• Clete says:

Honda Element! That was a strong contender for us, but it turned out that the back window didn’t open. No dog of mine wants to ride with his head inside the car.

• Lili Von Schtupp says:

Great car, miss it almost every day except grocery runs. But those back doors were the worst.

• 91B20 1stCav (AUS) says:

Clete-do your hound a longterm vision favor and get ’em some ‘doggles’…

may we all find a better day.

10. Ben says:

Affordable vehicles is the key. Daughter needs a new car both her vehicles have 180k miles and both are in the shop and she has a loaner.
She wants a GMC Denali suburban 4wd and can afford it. Her current one is a 2008 Denali 4wd that I gave her at 80k miles she drove 10 years and has a blown cylinder on her second engine.
My advise the her and husband are to wait it out a few months and can save a few thousand on a new or used one. But only after reading this great Summary article. Thanks Wolf!
I’m never going to live in a car!

• Harvey Mushman says:

“I’m never going to live in a car!”

Knock on wood.

11. Mendocino Coast says:

I expect GAS Big Car /Truck supply to continue to increase until they stop making them .They are to costly along with Gas to costly

a long time ago now when Toyota VW Etc began the takeover of the Car market America missed the Boat now trying to catch up

Sheer stupidity like the Fed

• 91B20 1stCav (AUS) says:

Mendo-always beware the ‘…not invented here…’ syndrome-‘national hubris’ has torpedoed more than a few industries (or civilizations…).

may we all find a better day.

12. Digger Dave says:

Don’t let gas prices drop too low. A few months of high prices is not long enough to get the overproduction of antisocial vehicles under control. People need to feel it for much longer. Yes, I’m hoping supply and demand will do what the feds, manufacturers and buyers won’t do. Vehicles are getting bigger, quicker from the line and too safe for everyone in them, at the expense of everyone else. FYI, as a tradesman, I own a GMC 3/4 ton truck with a trim that’s really called “work truck.” GM killed that name in recent years – God forbid a pickup get advertised for it’s original purpose. So yes I can throw stones at vehicular stupidity.

• Jk says:

“Don’t let gas prices drop too low.”

Right, stick it to the working poor and lower middle class… The ones barely making it.

Pfft.

• Digger Dave says:

Sorry, I stand corrected. Keep gas prices irresponsibly low, and f&%k the planet and everyone else because of the working class.

If you really cared about them, we’d undo our destructive silly automobile-centric lifestyle. I have lots of working class relatives in the EU. Somehow they seem to be doing better than us for all quality of life metrics, despite having had high gas prices for a long time.

What about housing? Good schools? Safe neighborhoods? Quality food? Pensions? Safe roads?

Or maybe we can stop selling friggin tanks as passenger vehicles and bring back affordable vehicles with good fuel economy, like a responsible society would.

Where are the down-market used affordable fuel efficient cars? For the working class? That’s right, they don’t exist, because up market wants giant SUVs and pickup trucks.

We are in the extreme minority. We have two fuel efficient FWD cars for daily drivers in a place where 90% of drivers insist they need 4wd or AWD, both of which are under 7 years old and both of which cost less than $15k. We are a working class family, combined income has never been above$100k ever.

Spare me the indignity.

• HowNow says:

Digger Dave, your reason and logic is no match for Libertarian rationalization.

• COWG says:

“ Don’t let gas prices drop too low. A few months of high prices is not long enough to get the overproduction of antisocial vehicles under control. People need to feel it for much longer”

Sooooo Dave,

What price do you think gas should be to make YOU happy and save everyone from themselves…

• Digger Dave says:

How about starting with enough taxes to fully fund road and highway maintenance?

• COWG says:

What’s your number, Dave…

Not trying to bait you, I have my own numbers in mind and am curious what you or anybody else thinks what is fair price…

My numbers are around $3 for regular and$4 for diesel… extra road tax for diesel since diesel users tear up the road more than anything else…

• Digger Dave says:

COWG, that I don’t know. We have to make assumptions.

Let’s assume that we want the gas tax on the federal and state levels, and not debt, to fund existing road maintenance (not building new stuff we can’t afford).

I’d imagine, since the US is spread out and automobile dependent, gas taxes would be much higher than in other comparable countries, not lower. Even Canada doesn’t fully fund road maintenance via taxes only, but they are much more responsible and it shows when you cross the border and convert CAD/litre to USD/gal.

And if we were more like the EU, with compact road networks and not much “federal” support for maintenance (in addition to requiring countries to be somewhat fiscally stable), then I’m sure our road taxes would be just awful.

The real questions are: how much of current road maintenance do we want the present users to fund and how much do we want to debt-fund while hoping for ever increasing growth? The longer we kick the can down the road, the worse the equal and opposite reaction will be when the party ends.

• VintageVNvet says:

ME TOO DD,,, but ya got the focus a little bit,,, just a little bit skewed:
Trades folks NEED a reliable vehicle, usually a pick up truck for the last 50 years or more, to do their work most cost efficiently, far damn shore!!!
That the manufacturers have distorted this reality into some sort of ”wussy wagon” ,as should be clear enough to any observer , is truly a crime,,, and WE, in this case the pick up truck buyers who need them WE, must, absolutely MUST help these manufacturers SEE this…
Maybe, probably WON’T,,, but we can try,,, mostly by voting with our dollars/purchases.

• Phil says:

It’s a disaster that at a time with huge demand for fuel efficient vehicles, there is no supply. The free market has failed here miserably and the world suffers for it.

• Franz says:

No, all distortions were created by cartels like the CBS. Fascism is the fusion of the state and crony capitalists at the top. We are reaching peak effective Fascism and not even aware of it.

13. unamused says:

The 2022 Hyundai Elantra starts at $19,950, less than half the cost of the average gas hog, a type that is no doubt insufficiently profitable for US automakers which are really financializationistas that make vehicles on the side. Americans are notorious for being suckers for overpriced wasteful vehicles. US automakers got caught with their pants down after the oil embargo in the 1970s with fleets of overpriced gas guzzlers and the Japanese makers ate their lunch, the same ones who now compete with South Korea and other foreign makers for the US auto market because they’ve all figured out how US makers operate. I do not recommend US-made vehicles to prospective buyers because I have ethics. My Bentley Mark VII will last forever and will never need an oil change, although I expect new tyres could be hard to come by when the current ones wear out someday, but I’ll think of something. I always do. • Seneca’s Cliff says: Ok, I’ll bite. why will your ancient Bentley never need an oil change? The only thing I can think of is that the oil leaks out so fast and has to be topped up so often it is essentially new all the time. • Apple says: LOL! • unamused says: “why will your ancient Bentley never need an oil change?” No crankcase. It no longer has an internal combustion engine and runs on H₂. • Greg Hamilton says: Un, Which conversion did you use? Did you build it yourself? That’s the most interesting comment I’ve read here in quite a while. Please let us know. • Shiloh1 says: Several of the domestic gas guzzlers from that era were small / mid size body cars and initially powered by modest 6 cylinder engines, then demand grew them to massive v8 with 4 bbl carbs. Valiant > Dart > Swinger > Demon. 178 ci / 2.8 L Slant 6 to 440 ci / 7.2 L Hemi! Iacocca said as much in his first book; he was still at Ford at the time and they were doing similar. I had a 70 something year old aunt who had a ‘71 Demon 318 who drove it like Mr. Magoo. Had all kinds of religious statues on the dashboard, too, which was a nice effect. • rick m says: Whenever I consider British automotive history I’m motivated by the example of Joseph Lucas AKA the Prince of Darkness. He pioneered the intermittent wiper, although that wasn’t his preferred duty cycle. All his electricks were intermittent. • Seneca's Cliff says: Reminds of that old Joke. The British drink warm beer because they have Lucas refrigerators. • Harvey Mushman says: Hah! My buddy used to love to tell me that joke. Way back in the day I drove an Austin Healey Sprite. • ft says: Lucas gets a lot of badmouth that properly should have gone to Magneti Marelli. • 91B20 1stCav (AUS) says: ft-too true. Lucas built components to price points specified by the manufacturers-BMC/Leyland/Standard/et al.-i.e.: as cheap as possible to ensure it would drive off the lot. (will repeat old Lucas joke, anyway-Lucas never relied on electrons to do work, but smoke, instead. When the smoke would escape the wiring, things would stop working… agree from time spent on old Alfas that MM is the first Italian swear word a budding young wrench learned…but, they’re still in biz today and a leader in FI tech/mfg. may we all find a better day. 14. rick m says: If the swing to small fuel efficient vehicles was driven by the price escalation of the past eighteen months, and especially since the Ukraine invasion, shouldn’t everyone who’s looking now notice the recent fall in gas prices and consider that when buying a car? Prices around here are around$3.30, I’ve seen$3.22. That compares to twelve years ago, IIRC. If it doesn’t go back up by Halloween or so maybe people will begin to believe, and buy bigger gashogs. They’ve gotten used to prices in general going up, and then falling some to a higher new base level. They’ll suck it up. Dodge trucks used to have homely styling and indestructible engines like the 225 slant six. My first car, a$75 Plymouth belvedere wagon had one. Always wanted a Duster with the big V8. Or a sharknose Roadrunner/Charger Daytona. Ram trucks styling won’t age well. Bunches of used trucks of all brands will be for sale cheap by Thanksgiving anyway as construction tanks and the bills for the vacations everybody figured they owed themselves this summer come due.my guess only.
Didn’t realize minivans only get 20mpg, my 3/4ton Ford van with a 4.6l V-8 gets 15mpg carrying several hundred pounds of tools. But it’s pretty flat here and too hot to get in a hurry.

15. Nathan Dumbrowski says:

In the market for a used Audi S5. Dealer prices on 4-5 year old models are dropping fast. One model has gone from $49k to$43k in the last 30 days. They called and texted several times to try to get me to return. I figure the market is softening quite a bit and I can wait it out. Several other dealers on similar models are showing the same results.

Happy to see this direction in the market and will keep watching but not buying until the trend slows down. Then I can make my mid-life crisis purchase

• Rob says:

Nathan, what tools do you use to track market pricing on individual vehicle make/models?

• Nathan Dumbrowski says:

Carfax. They have my presets of what I am looking for. They have access to many of the dealers both larger and smaller independent sites. Also using Edmonds but not CarMax so much as they charge what appears to be ~10% higher than all other sites

• Rob says:

Thank you.

16. medial axis says:

I haven’t had the need to own a car for the past 30 or so years so I haven’t.
It’s likely easier to do here in the UK than the US. Even so I suspect many own a car because they think they ought to. After all everyone else does.

17. Michael Engel says:

1) F-150/Camry sales are inverted. As long as the music play prices
are moving up, like Chinese RE prices. When the music stop, Ram 1500 supply might reach 188 days.
2) Next month the Fed will raise rates. The yield curve is inverted.
The 10y-2y is up from minus (-)0.61 to minus (-)0.41. The real GDP indicate a minor recession. It might get worse.
3) In Germany the yield curve isn’t inverted. Gravity with US lift the
the long duration. Both the 10y and the 30y are above 2y. The German economy is booming.
4) We got chips for creepto, pc and smartphones, but not for F-150 doors. F-150 discount might exceed ev discounts.
5) Sales might test the lockdown lows. Buyers might be on car payments strike and the gov will support them.

• David W. Young says:

Michael, I think Americans would rather eat and have a roof over their heads than be stuck with the vehicle payments on a new or used grossly overpriced ride. But minor recessions, esp. with the world having more debt ever since the Big Bang, inflation still 600 basis points plus OVER the Fed magical target, and political unrest spreading faster than Covid, have a bad habit of turning into big or gut-wrenching recessions. Widespread layoffs and company failures and debt defaults do not help GDP.

• Synergy3000 says:

The nice and fancy large vehicles at the food banks tell a different story.

• 91B20 1stCav (AUS) says:

Syn3K-you’ve noticed that too? (…and not just recently…).

may we all find a better day.

18. Franz Beckenbauer says:

The explanation for all of this is really very simple. All you have to do is look at the housing bubble of 2008 and replace houses with Cars.

Dealers are now making more money on the loans they write for a sale than on the actual sale itself. So they go for higher priced cars. Simple.

What was the HELOC for a house (” you can always refinance”) is now the negative equity in a car loan that is just rolled over into the next loan. It’s called the “trade-in treadmill”. If there are only high-priced cars available, buyers have no choice but to suck it up and join the rat race.

Of course it will go the same way as in 2008 with houses. The Fed will buy car loans. Who knows what’s next after houses and cars ? Refrigerators could be an option. Or Baseball cards.

They’ll find something.

• El Katz says:

For many years, dealers have made more profit on the auto financing and aftersale items than the vehicles. At least the visible profit on the vehicle sale. Plenty of money “below the line” is available in holdback and other financial shenanigans to shield gross profit from the sales people and managers – which reduces compensation costs.

The primary contributor to dealership profit (and has been for over a decade) is the service and parts departments.

Cash for clunkers did a lot of damage to the poorer folks as it removed a large number of perfectly serviceable low cost vehicles (and spare parts) from the marketplace The move to plastic everything (plastic oil pans, plastic intake manifolds, plastic radiator components, plastic water pump impellers, etc.) have also reduced the service life of vehicles as the plastic deteriorates from the heat cycles and warps or fails entirely, often resulting in catastrophic failure of the engine.

• w.c.l. says:

Case in point, the radiator on my small truck that was replaced a mere 6 years ago, went out last week and had to be replaced again. The plastic components went bad and wouldn’t hold pressure. I couldn’t believe this material would be trusted to such a vital item.

• HowNow says:

Thanks, EK, for the deep dives into the auto industry. And you do an excellent job of describing it.

Hate to see you and Unamused in a scuffle.

• Franz Beckenbauer says:

It’s called “planned obsolescence”. Same with computers of a certain company making tons of money that has a habit of changing their entire platform every few years with the perfectly working Computers left in the cold. I installed Linux on some of those still perfectly working sweeties to give them a few more years. The amount of hoops you have to jump through just to remove all the pitfalls and traps to basically block the Hardware from working with anything else than the company’s operating system is incredible.

19. DV says:

To me, this sudden shortage seems to have two causes. One has to do with chips supply and is that Chinese (and Koreans) keeps ships to themselves, exporting vehicles. China now exports 300 000 vehicles a month. This marks its successful advance along the value chain ladder. This is reflected in the trade surplus. Last time oil prices were at $100, China’s trade surplus was close to zero, now it run at 100 bln/month. The second is that the Western car manufacturers seem to have decided to move to high-end segment only for a variety of reasons – costs, margins, potential phase-out of ICE vehicles, moving to EVs and eliminating ICE offerings in smaller vehicles segments. The result – the US car manufacturers are increasingly becoming low-volume/high-nd manufacturers, leaving the market without affordable cars. This is not just in the car markets, where the relentless money printing allowed them to hike prices and still be able to sell to higher-income consumers. It is everywhere. The manufacturer’s pricing now seems to be based on the incomes of the top 30% of consumers. But this strategy has its limitations, as car manufacturers need a diversified portfolio to survive and prosper long-term. High-end crowding is starting to backfire with slowing sales and companies do not have a low-end buffer. They will have to go downmarket again. 20. JoshWx says: Just put$2600 into my 2012 Honda Accord; inspection, oil change, new front & rear brakes, calipers, shocks, etc. Next vehicle I own will be a truck but I have no intention of buying at these prices. Should be able to get 3-5 more years out of my Honda and hopefully by then sanity in the vehicle market will be restored. 196k miles and my car still rides likes new; why spend 10-20k on a down payment for a new one?

• Flea says:

These are easy fixes ,if your handy have a few hand tools ,watch a video . You could do these repairs for 600$• JoshWx says: Yeah, I probably could. Car maintenance is one area I have little to no experience in. But maybe to save some bucks, I’ll dive into some Youtube one of these days. • TheFalcon says: I’m with you Josh, just put$2200 into my Lexus with 230K on it, drives great, holding off on an SUV purchase (used prices up 100% on Lexus GX in my area that’s right 100%), the older the SUV the higher % increase LOL, guessing it will be several years before I buy.

21. historicus says:

Notice Biden called for refiners to drop the price of gasoline…
but didnt call for the EV makers to drop their prices.

22. JC says:

A sample of north eastern pa. Aug 12th.

2023 Aucra Intergra Aspec. Msrp 37500+2500(gouge)+740(processing fee, opaque theft)=$40740 before sales tax for a tarted up civic. 2023 Toyota GR86. MSRP 29000+4000(gouge)+740(processing fee fraud)=$33740 before sales tax.

23. Michael Engel says:

Cars shipped from Mexico suffer huge damage :
broken glass, stolen battery, stolen tires, bullet holes, people sleeping
in them and…
PR and Santo Domingo can reduce the Mexican Cartel.

24. Educated but Poor Millennial says:

You see a dip and one reason can be that the 3 year lease is due. The car that people leased 3 years ago, right few month before the pandemic started, now has to be returned. That time car production stopped.
During the pandemic , all people I know, they bought out their leased car because we had a shortage . A sense of desperation. Now people are looking for new set of wheels again. and they dont want to do a buy out option. Now they are started to look for new redesigned autos again. This just can be one of the reasons but they can be also many other factors.

25. CreditGB says:

So, I buy that Ram 1500 and essentially get $9,000 off to put into my pocket. My existing Ram 1500 gets about 22 MPG the way I drive it and I can pack lots of everything into it that I can’t fit into the tiny economy car. So, using the$9,000 to reduce my current $4 per gallon fuel cost by$2 per gallon to $2 per gallon, that should buy me 4,500 gallons of gas at$2 per gallon cost.

That 4,500 gallons of gas will drive my Ram 99,000 miles at the $2 per gallon cost. So the high cost of my very comfortable, infinitely useful Ram only starts after 99,000 miles when my$9,000 cash discount is used up.

OR, maybe I have messed up in my calculations.

• JC says:

You missed the part your behavior is humanity committing suicide… the earth is burning.

• Harvey Mushman says:

Lol!!!

Like George Carlin used to say “The planet is going to be just fine, it’s the people who will be f**ked”.

• Harvey Mushman says:

If you enjoy it and you can afford it, then your calculations don’t matter.

• rick m says:

CreditGB- a consideration is that you know your existing vehicle and have an accurate sense of how “breaky” it is and who’s good to take it to and roughly how easy or not it is to get parts and whether they are pricey or not….
This varies from car to identical car, consumer reports are only useful by brand and model year. New vehicles have warranties, but they aren’t guaranteed to have the parts or service technicians available as quickly as you may have become accustomed to in the past. There’s lots of multiweek delay stories, and they cannot really compensate you for your lost time and profit opportunities that you might have missed while your car is waiting on a
part covered under the warranty.
Math is indeed hard, others must check yours. I might be interested in an EV when they get to a decent price point and the bugs worked out. But the last generation of ice vehicles are going to likely be orphans for which parts and service will be unobtainium.

26. Depth Charge says:

This is a total fookin’ clown show. It’s now been an entire year since “industry experts” predicted the chip shortage would end and auto inventories would start building. Now some are saying it won’t be until 2024.

• Flea says:

My daughter wants a new highlander hybrid,called fleet sales manager ,was told this shortage won’t end until 2026 . Seems like fraud to me or just well planned out by uncle

• Einhal says:

Yeah, that might be true if inflation continues out of control and everyone, including the top 20% who feel asset rich, keep spending with abandon. If that isn’t the case, then there will be fluts.

27. DawnsEarlyLight says:

Is it true, under the new inflation reduction act, that only EVs assembled in the US qualify for the $7000 tax credit? • Apple says: It also includes a mandate that a specified portion of battery components must be manufactured or assembled in North America. I don’t think any EV currently for sale qualifies. 28. historicus says: And the balance sheet will drop by how much, reported this week…? 29. Willy2 says: – I have heard/read a story that car dealers are coming under more pressure from their lenders. That means that car dealers are being forced to get rid of their inventory that doesn’t sell “too well”. That’s why I expect that car dealers will be forced to offer deep/deeper discounts for their cars that remain too long in inventory. Or that car dealers will increasingly send that inventory to auctions to be sold over there. Therefore I expect that auction sale prices (especially for the (more) expensive cars) will start to go down in the (very) near future (this month ???) – I also heard one story that car dealers are becoming more and more willing to “negotiate” the price of a car (= accept a lower price offer). – In that regard it makes sense to wait a (little) longer before buying a car. • Wolf Richter says: 1. “I have heard/read a story that car dealers are coming under more pressure from their lenders. That means that car dealers are being forced to get rid of their inventory that doesn’t sell “too well”.” Quit listening to this BS. 2. “I also heard one story that car dealers are becoming more and more willing to “negotiate” …” You can try a Ram dealer. See article. Some others that you might try include Volvo (now a Chinese automaker), or some models at some brands where interest is now sagging. But good luck “negotiating” over a vehicle that the dealer is out of, and that you can order but maybe have to wait 5 months to get. • ru82 says: – In that regard it makes sense to wait a (little) longer before buying a car. That is exactly what the FEDs want. The expectation that inflation is over and future prices will start dropping. People will wait and delay purchases for lower prices and a better deal later. The auto sales will slow down. Housing will slow down. Retail sales will slow down. These sectors will start laying people off so the job market will not be so hot. These people without jobs will spend less on services so services will slow down and they will start laying people off. Over stretched people will lose their house or car. Then prudent savers can go out and pick up bargains on houses and cars. People start thinking we will have a recession and they will start saving more money. Paying down debt and the over extended will just stop paying and get a lot of their debt forgiven. The FED waits until there is enough pain to stop raising rates or lowers rates and we have another bull market. The Government will add some more fiscal spending to help goose the economy and add more debt. Wash, Rinse, Repeat. 30. sunny129 says: ru82 ‘The expectation that inflation is over and future prices will start dropping’ China is slowing down. Europe is already if not, soon in recession. Oil dropped suddenly by$3 if not more. Global recession is on the way

But here, in the good ole USA, the power of perception and the hope for an early pivot is still reigning. Mkts remain disconnected

• Miller says:

This is where the pivot enthusiasts, squawkers and the “Fed will be back to rate-cutting any day now!” idiots go from being annoying, to just intolerable with all their hot air–now they’re openly playing around with the very definition of “recession”, trying to prematurely declare it in a desperate bid to get the Fed to loosen. No, the world is not in a recession yet even by the loosest definition and there is NO basis for the Fed to halt QT or stop the rate hikes.

For all the talk about EU economic slowdowns, Europe’s economy actually performed pretty well in Q2 and Q1–a 0.7 percent increase for the Eurozone in Q2 on top of 0.6% increase in Q1, best in developed world and despite the conflict to the east. There is absolutely no scenario that Europe is in a recession right now, it’s mathematically impossible. China’s economy while slowing is not in recession, it still grew in Q1 and Q2, ours chart says around 2.5 percent growth for the half-year. (The same squawking idiots then trot out the “but can you trust China’s numbers?” talk when China’s own reported numbers are a bitter disappointment to the Chinese government and well below the 5.5 percent target–so even when they themselves report a big miss, the squawkers want to have it both ways and we can’t trust them?) Yes, China is rate-cutting but for reasons that can’t be generalized to the US–their inflation is comparative tame and the slowdown mainly artificial due to COVID restrictions (and slowed exports overseas) and lack of investment due to the layers of COVID protections. That deliberate demand suppression is exactly the kind of (uncommon) situation where a rate cut makes sense and won’t stoke inflation (plus the loosening is temporary and they’re NOT doing dumb things like QE Fwiw).

Even in the United States, although GDP fell in both Q1 and Q2, the NBER has stated we’re not in recession for legitimate reasons–employment and spending in the USA is still strong, the GDP drop was big part due to the inventory excesses and over-stimulus in 2021 that of course had to be pulled back, starting BEFORE JPow and the Federal Reserve began tightening. All while inflation is hitting Americans even harder. Wolf is right about this, the base problem in the US is still over-stimulated demand (esp for the wealthy asset-holders who got most of the COVID stimulus benefits) and too much of stoked inflation, the conditions are absolutely ripe for the Fed to keep tightening even more aggressively, if anything QT should be sped up more.

31. Ross says:

Didn’t so-called America automakers just recently abandon the sedan segment of the business? I wouldn’t lament for a single minute should Uncle Stasi-Sam not bail out the Big Three and they go under. Actually they should go under.

32. yells2k says:

Wolf, why didn’t you let my comments post? There was nothing wrong with them. Is everything scripted here?

• Wolf Richter says:

Both comments were just links. I don’t allow links. if you want to promote something, do it somewhere else.

• yells2k says:

Wolf,

They were not promotions. They were references in response to statements your readers made. They supported the conversation. Your readers said there was no evidence that climate change is man-made, I provide a place to find that evidence. Your other reader said no one recycles or refurbishes Lion batteries, I provided a link to show that they do.

• Wolf Richter says:

1. That whole discussion on climate change is such hackneyed old hat, that I’m bored to tears by it. No one ever changes their mind on it, or on anything else, and it doesn’t matter what links either side supplies. And I’m not going to tolerate a battle of links. Period.

2. The second link was definitely a promo of a private company, and one that engages possibly in very dubious to fraudulent activities. Look at it! You just googled recycle lithium batteries, and you grabbed the first link that came up without checking it out. This website offers to sell “refurbished” and “recycled” lithium batteries. They can sell them, alright, but those batteries won’t hold enough of a charge to be useful

This is the disclaimer on their website:

“By purchasing this product, you agree that seller makes no warranties whatsoever with respect to the goods sold on this website, including any (a) warranty of merchant ability or (b) warranty of fitness for a particular purpose, whether express or implied by law, course of dealing, course of performance, usage of trade or otherwise. Buyer acknowledges that it has not relied upon any representation or warranty made by seller, or any other person on the seller’s behalf. If purchasing for resale, buyer assumes all responsibility and agrees to forward all notifications and warnings to the purchaser.”

33. J. Towel says:

Why is everyone saying “Just wait until next year prices will be much lower”? Automakers have underproduced by 3 million units and chip supply is still a big issue. Plus going forward automakers have indicated they want to keep more lean inventories. I think MSRP will be a reality for many years on popular models.

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