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Car Prices Might Be Unsustainable for Buyers
(www.wsj.com)
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this post was submitted on 22 Aug 2023
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My understanding is that a big part of the reason car prices are up is that everybody wants luxury brands + high-end trims now. So a lot of these delinquencies could be for people who would have had no problem affording a $300/month car lease if they'd opted for a cheaper car.
Consumer preference is part of it, but car manufacturers have also intentionally stopped competing for the low end and small vehicle market. It’s textbook tacit cooperation.
During the pandemic, there was a chip shortage that led makers to prioritize high margin cars like trucks and luxury SUVs. Many makers decided that they liked being a low volume high price seller and just cut their lower priced cars altogether. If everyone does it at the same time, there’s no market mechanism to punish them. Many people can’t buy smaller cars even if they wanted. It doesn’t help that all of our car regulations in the US and Canada encourage this by having much weaker regulations for bigger vehicles. The whole market is a mess.
@fresh The Answer, at least historically, is consumers buying foreign cars. That’s one reason VW’s took off in the 1950’s-‘60’s. Of course, that’s been foreclosed by EPA & NHTSA regs. But EV’s would avoid EPA regulations. IDK what it would take on the safety end.
But, like you said, the foreign makers are also making big cars to comply with our corrupt pro-corporate regulations.
EVs are looking to be both more expensive and more dangerous. I have zero hope that they will be an improvement in any way except emissions.
We need weight and size based taxation to discourage big cars. More than that, we need to move away from car dependence.