Musings from the Front Desk

The world hit a collective pause around this time last year. The streets were strangely empty, storefronts were dark and people were at home, waiting and wondering. Business of all kinds was stopped by government mandate, lack of workers or shortage of materials. Every area of the country and the world felt the effects this enormous event.

Strange Days

Like many sectors, the auto industry is in an unusual place these days. The average vehicle has never been older at almost twelve years old, according the Bureau of Transportation Statistics. Not only are cars older than ever before they are also more expensive. Kelley Blue Book reports an average new vehicle transaction price of over $40,000, up more than $2,000 from the beginning of 2020. It’s hard to reconcile the economic upheaval of the past year with record prices on major purchases but it’s true.

A supply shortage has hit auto manufacturing in a major way. GM, Ford and new Chrysler parent company Stellantis have had multi-week shutdowns at manufacturing plants because of a lack of computer chips. Vehicles are being parked in an incomplete state until parts arrive to finish the build. Some factories have stopped altogether to allow time for parts supply to catch up. These stoppages have been occurring for the last few months and are expected to continue for months to come.

For Sale

It’s a seller’s market in car sales. Limited supply has been the main force behind record new car costs. Dealers are unwilling to lower prices, knowing that restocking their lots will be difficult. Demand is also high so a buyer hoping to negotiate will be pushed aside by another willing to pay the asking price.

Used car prices are also very high right now. Lightly used cars are selling for almost the same price as they cost two years prior. Trucks are especially hot, with some trucks increasing in value from their sales price a few year before. The old adage that a car loses 20% of its value when driven off the lot seems to be out the window.

Keep it Running

Anecdotally, we’ve seen an increased willingness to repair older vehicles; ones that may have been traded in a few years ago. For some, working at home means many fewer miles driven and keeping an old car makes more sense than buying a new one to let it sit unused. For others, the high cost of an equivalent new car makes the cost of a major repair more palatable. It’s hard to put exact numbers to these thoughts but in day to day interactions, people are ready to invest what is necessary to keep their cars on the road.

Of course, repairing a car requires parts and materials in the same way building a new car does. We have had difficulty getting certain types and brands of parts. There have been delays in ordering and delivering parts as well. What once came in overnight may now take several days, if it’s available at all.

This next year will be very interesting, to say the least. We can’t say when things will return to the way we have grown to expect them to be. It’s safe to say that it won’t be soon. Lockdowns and shutdowns have left scars on the way we live life and conduct business. Some of the changes will be beneficial, forcing new thought into old routines. Some will be harmful, disrupting what was made efficient through years of practice. All of them are worth reflecting on, thinking through and mining for wisdom.

What’s been your experience? Your thoughts? Call the office or send a message through bbackcarcare.com and let us know. We may feature your response in future content.

And as always, if you are in need of a repair, tires or maintenance, request an appointment online or give us a call.