The Rising Cost of Owning a New Vehicle

Since the start of the pandemic in 2020, the car industry has faced unprecedented challenges and navigated a series of economic shifts, with inflation drastically influencing both prices and consumer behavior. At Twin State Ford, we’ve both directly experienced and closely observed inflation and car prices, adapting our approach to every challenge and new opportunity for growth. Drivers seeking a new or pre-loved vehicle have expressed concerns about how the car-buying process will affect them when inflation seems endless. However, hope for lower prices may be on the horizon, as a slowdown has started to ease the price surge.  

Inflation and Car Prices

During the early pandemic, most industries, including car manufacturing, felt the full blow of supply chain issues due to lockdowns and safety restrictions. Essential materials for vehicle production, including steel, aluminum, plastic, and computer chips, saw price surges, which unfortunately affected the cost to manufacturers, only to be passed on to consumers. This factor, along with logistical issues and supply chain disruptions, increased prices and extended waiting periods for new models on the dealership floors. To approach this phenomenon more economically, consumers altered their purchasing behavior to prioritize functionality over luxury. They chose to hold on to their previous vehicles if not to opt for more affordable models. More drivers took an interest in used or certified pre-owned automobiles, resulting in inflation and car prices increasing. Across the board, the car inflation rate affected new and used vehicles, leading to a difficult-to-navigate market for consumers and manufacturers.

Hope is On the Horizon

The impact of inflation and car prices has caused consumers to be hesitant when re-entering the car-buying market, fearing price gouging and not getting a deal worth pursuing. After nearly three years of higher prices, that frustration is valid; however, brighter futures appear to be on the horizon, with consumers altering their buying decisions and manufacturers having time to catch their supply of new vehicles up to the demand. At the start of January 2023, American car dealers had approximately 1.74 million new vehicles available on their lots, and as of January 2024, the supply sits closer to 2.61 million. While this total isn’t quite as near the pre-pandemic level of around 4 million automobiles across dealerships in the United States, the increase in new cars becoming available indicates a cooling of inflation and car prices. This is great news for dealers and consumers alike, as the cost of purchasing a new vehicle may be much less than what has been seen in the last few years, and will continue to decrease as supply continues to return to normal levels.  

Buying Your Next Ford

Here at Twin State Ford, we’re doing our duty by continuing to monitor these economic trends as the automotive industry proceeds toward resuming its pre-pandemic levels. We sympathize greatly with the frustration of navigating and buying a car in this challenging, yet slowly stabilizing market, and we are putting in our best efforts to help customers shop while providing the highest quality service possible. Our professionals are available to answer any questions regarding financing and current offers and guide you every step of the way through the process of purchasing your next vehicle. For your utmost convenience, we even offer home ordering and delivery for purchasing and acquiring your new car or truck with our Mobile Delivery Program. Visit us at Twin State Ford today and we’ll help you get back on the road with total confidence.