Vehicle demand is finally slowing down
Throughout the pandemic, vehicles have been in high demand and short supply. Automakers have struggled to secure parts, like semiconductors, causing shortages of vehicles on dealer lots and higher prices. But in recent months, we’ve seen some signs that the vehicle market is reversing course: supplies are improving and demand is slowing.
Ever since late summer, it’s been getting easier to find certain types of vehicles at dealerships, said Michelle Krebs with Cox Automotive: “We’re seeing inventory increase with the domestic automakers in particular, with full-size pickup trucks and luxury cars.”
That said, Krebs expects vehicle sales to fall 8% this year. That’s because demand for new vehicles is softening, thanks in large part to rising interest rates on auto loans.
“That bumps up the monthly car payment. The monthly car payment is well over $700 now, and that’s just not affordable for some people,” she said.
But as auto inventories continue to improve, new vehicle prices could become less inflated, said Karl Brauer with ISeeCars.com.
“You’re still paying more than you did before the pandemic for them, but the momentum seems to be shifting somewhat rapidly backward to normalcy.”
Brauer said he expects demand for new and used vehicles to continue slowing down into next year.
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