Buying a car has never been more difficult, more expensive, and less rewarding, according to automotive news company Jalopnik.
In 2022, the automotive industry suffered a few major hits. Inventory issues were triggered by supply chain problems — in particular, a huge deficit of semiconductors hindered the car manufacturing process. Some brands scaled back, and others had to shutter plants entirely while they waited for parts to become available. Most cars that were obtainable were pre-sold, leaving consumers in the lurch.
These shortages created other problems, such as delivery delays and backlogs. Tom McParland, Founder of AutomatchConsulting.com, told Jalopnik that he knew of buyers who waited over a year for cars they had purchased and paid for, which were supposed to be in stock within four to six months. Additionally, to get cars out to consumers, some brands, such as Ford, removed options like upgraded audio systems.
Another issue in 2022 was markups. While limited-production cars have always been much more expensive than mass-produced cars, when the supply chain slowed, every car became a limited-production car. Popular rides like the Nissan Versa were marked up more than 30%, and according to Edmunds, 82% of new cars were upsold for more than the sticker price. Even used car prices skyrocketed, and leases were higher than ever. Many leases didn’t provide buyers with the usual discount, and lease payments ended up being more than financing a car.
It’s hard to know if the automotive market will cool in 2023. Some experts say that a recession is potentially on the horizon or already here. If there is a recession, the auto market will likely continue to see high prices and perhaps more issues with production. But if a recession isn’t in the cards for 2023 and supply chain issues or inflation begin to ease, the market could finally see some relief.