By Don Bradley
Here’s a number that will leave your mouth open like a garage door.
That is the national average monthly payment on a new car purchase in August, according to J.D. Power, the industry scorekeeper.
That’s an all-time record. Not long ago, $716 sounded more like a mortgage payment. The average price for new cars is now up to $46,259. Factor in rising interest rates and that’s how you get up to $716
The reason for the price jump is a convoluted soup of parts shortage, a global pandemic, inflation, supply chain disruption and the war in Ukraine.
Fewer cars are making it to the dealers. It’s a seller’s market. It also means fewer trade-ins, which has reduced used-car inventories. Kelley Blue Book says the average price for used vehicles jumped in July to more than $28,000.
“There’s not many to look at and the price is high,” a man in his 20s said a recent evening as he checked out inventories at the string of dealerships along 103rd Street between Wornall Road and State Line.
“You don’t get to pick options that you want. I’ve been putting off buying because I kept thinking things would get better. It hasn’t yet. But I still need a car.”
Further south at Rob Smith Ford in the Martin City area, operations manager Bobby Sight hears the frustration every day.
“We are struggling for inventory,” Sight said. “It’s a tough time for a car buyer. It’s tough to go out and find exactly what they want. They have to be patient or they have to be ready to buy as soon as they see a car they want.”
He advises new car shoppers to be patient, order a vehicle to secure a price up front.
One of the bigger dealerships on 103rd Street is Molle Toyota. An executive for the giant automaker recently said buyers should not expect the inventory crunch to improve anytime soon.
“I do not think we’re going to see growing dealer stock for one more year,” Jack Hollis, Toyota’s executive vice-president for sales, told the Automotive Press Association.
He predicts the shortage will not ease until late 2023.
Toyota’s U.S. sales dropped 22 percent in the second quarter.
Not far from Molle Toyota is Cable Dahmer Buick GMC. The company also has dealerships for Chevrolet and Cadillac on the 103rd Street strip.
Mary Barra, General Motors CEO, agrees no letup will come until late 2023. A key to eventual recovery, she told Bloomberg Television, is for the U.S. to produce its own semiconductor chips, the shortage of which is a big reason for the country’s car crunch.
Last week, President Biden signed the CHIPS and Science Act, a $280 billion effort to boost domestic chip-making and reduce U.S. reliance on other countries, mainly China.