FI showroom red and grey logo
MenuMENU
SearchSEARCH

High Vehicle Prices Expected to Hold Their Grip on Auto Industry

Consumers seeking lower prices on dealership lots must wait until 2023, reported auto-industry leaders at the New York International Auto Show.

April 19, 2022
High Vehicle Prices Expected to Hold Their Grip on Auto Industry

 

Credit:

Quoteinspector.com

2 min to read


Consumers seeking lower prices on dealership lots must wait until 2023, reported auto-industry leaders at the New York International Auto Show.

They say inventory constraints will continue to affect new and used car inventories throughout 2022, in turn driving prices up.

Ad Loading...

Car prices remain higher than normal, albeit lower than record levels. But depleted car lots, strong consumer demand and lower factory output will keep prices higher than normal.

Even if the computer-chip shortage and other supply-chain problems correct themselves, the backlog of consumer demand will keep car inventories near historic lows, analysts predict.

“It could take years” before dealership stocks recover, said Steve Center, operations chief for Kia’s U.S. business. “You won’t see incentives, because we’re still going to be selling everything we can make.”

Soaring car prices point to broader inflationary pressure on U.S. consumers. In March, U.S. inflation surged to a four-decade high of 8.5%, driven by higher energy and food costs, supply constraints and strong consumer demand, according to the U.S. Labor Department.

But after reaching record highs, vehicle prices are starting to level off. In March, the average transaction price declined slightly for the third straight month, to about $43,700, according to J.D. Power. Even so, this figure is 26% higher than before the pandemic. The average transaction price hit $34,600 at the end of 2019, the research firm reports.

Ad Loading...

Used-vehicle prices also remain at near record highs. But vehicle leases have become less attractive as car companies pull back promotional terms.

For now, auto executives and dealers report new-vehicle demand remains strong, despite rising interest rates and higher gasoline prices. So many people seek new cars that auto companies expect buyers for every vehicle they can produce throughout 2022, auto executives and dealers said.

Dealers now sell vehicles into the pipeline with buyers ordering vehicles and waiting weeks or months for delivery. Meanwhile, consumers snatch up cars that arrive without a buyer as salespeople keep lists of vehicle shoppers, according to dealers.

Dealer markups or charges beyond the manufacturer’s suggested retail price will continue in 2022, they say.

Car shoppers with vehicles to trade in benefit from record-high used-car valuations. In the first quarter, buyers got an average of $9,300 for their trade-ins, 81% more than the average from a year earlier, according to J.D. Power.

Ad Loading...

The average dealership profit on a new car, including financing and insurance products related to the sale, averaged $5,000 in the first quarter, more than double 2021 levels, according to J.D. Power.

“It’s a tough time to buy a car,” said Toyota Motor Corp.’s North America sales chief, Bob Carter. “But it’s a great time to be in the car business.”

Originally posted on Auto Dealer Today

More Auto Finance

$5 bill poking out of blue jeans pocket
Auto Finance•by Hannah Mitchell•October 14, 2026

Interest Rates Further Squeeze Auto Consumers

Last month’s hike and a potential second increase this month add to a growing list of inflation woes that could continue to dent overall car sales.

Read More →
Staircase with no rails next to red-painted wall
Auto Finance•by John Tabar•October 8, 2026

Mind Your Process

Consistent steps taken in various aspects of the F&I office can make valuable differences over time, similar to an outline for a best-selling book.

Read More →
Scrabble letter tiles spelling fraud
Auto Finance•by Gil Van Over•September 30, 2026

Top Five Credit Application Fraud Flags

Compliance audits regularly reveal bad habits that can lead to fraud charges and should have been stamped out decades ago.

Read More →
Ad Loading...
Paper money, car key fob and calculator
Auto Finance•by Hannah Mitchell•September 14, 2026

More Auto Loans for the Taking in August

Riskier categories were on the uptick for the month as lenders loosened access in several areas while balancing out the exposure in another, Cox Automotive reported.

Read More →
A fan of $100 bills sitting on a white envelope
Auto Finance•by Hannah Mitchell•August 12, 2026

July Was Hot for Auto Borrowers

Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.

Read More →
stacks of coins, a calculator, paperwork, and a pair of glasses in the background, text Lender Experience Drives Dealer Decisions, F&I and Showroom
Auto Finance•by Lauren Lawrence•August 12, 2026

Dealer Lender Preferences Revealed

When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.

Read More →
Ad Loading...
man sitting at desk using a calculator
Auto Finance•by Lauren Lawrence•August 10, 2026

Auto Refi Savings Surge

Consumers with 84-month auto loan terms who refinanced saved the most on monthly payments, according to a new report by auto refinancing provider Caribou.

Read More →
Tiny toy car in front of small stacks of coins
Auto Finance•by Hannah Mitchell•August 5, 2026

Subaru Enters Lending Business

The automaker follows other brands in adding captive financing in the U.S., and says the move will strengthen its position here.

Read More →
Man climbing ladder in front of mountain landscape.
Auto Finance•by Lauren Lawrence•August 3, 2026

Positive Equity Reaches Record High

Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.

Read More →
Ad Loading...
Photo of document next to calculator and inkpen
Auto Finance•July 20, 2026

Dealerships Are Paying the Price for Extended Car Loans

Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.

Read More →