According to Moody's Analytics, monthly auto loan payments for vehicles increased about 40% from pre-pandemic levels. Where is this increase coming from?
iSeeCars.com Executive Analyst Karl Brauer joins Wealth! to give insight into the inflation of monthly payments for auto loans and the impact it has on consumers:
"So automakers believe it or not, have kind of made out pretty well. And you've seen a lot of their numbers because they're selling a lower volume, but they're selling it with more profit per unit. And I think they discovered this and they kind of like it. Now we're seeing incentives come back. They're kind of getting pulled back into the we got to produce more cars and have more options on the dealer lots. So that should start to drive prices down. We have seen them come off their highs, but I think we're a long way from getting back to pre-pandemic levels because we had this long buildup of supply shortage and demand build..."
For more expert insight and the latest market action, click here to watch this full episode of Wealth!
This post was written by Nicholas Jacobino
Video Transcript
We were also looking at some data going back to last week about where all the places inflation still is and isn't.
And and even as we think about auto insurance, there's also just monthly car payments for new vehicles that we've been keeping tabs on Moody's analytics estimates that the the monthly payment for a new vehicle in May is around $750.
Our viewers are seeing their own screen back in May of 2019, $530.
So we we ran the math, the average transaction price for each payment are somewhat similar when you're accounting for inflation, but that is a 40% increase from pre pandemic levels here.
So I mean, what, what, what gives here, what's kind of driving this and uh the the price discrepancy that we're seeing or the disparity at least between 2019.
And now I think automakers realized that when they had a lower supply, they could sell fewer cars at a higher profit level and you saw them killing like, you know, base models or if it was all wheel drive and front wheel drive options, they just went with all all wheel drive models So automakers, believe it or not have kind of made out pretty well.
And you've seen a lot of their numbers because they're selling a lower volume, but they're selling it with more profit per unit.
And I think they discovered this and they kind of like it.
Now, we're seeing incentives come back.
They're kind of getting pulled back into that.
We've got to produce more cars and have more options on the dealer lots.
So that should start to drive prices down.
We have seen them come off their highs, but I think we're a long way from getting back to pre pandemic levels because we had this long build up of, of supply shortage and demand build and it's going to take a while to release all that pressure that built up then and you have people who still have enough money to pay this kind of price for these cars and they're doing it.
Uh It's unfortunate to see people taking out these kind of loan levels though with $700,000 monthly payments.
That's, that's kind of crazy carl super quick before we let you go.
We only got about 15 seconds here but Fisker bankruptcy that coming across this morning.
Uh What type of net impact do you see that having here?
Uh, and especially for those owners of Fisker or even, or even the people that were thinking about buying one?
Well, this is round two.
So, you know, it's kind of a fool me.
One thing.
Right.
I mean, if you bought a Fisker and now you're gonna try to drive it for a while.
I don't know how you're gonna get it serviced.
It's unfortunate.
And what's more scary is this might not be, but this might be the first and the trend line we're gonna see on these EV makers.
It's a tough market to make evs.
"auto" - Google News
June 22, 2024 at 07:00PM
https://ift.tt/K0VBoQN
Examining the steep rise in monthly auto loan payments - Yahoo Finance
"auto" - Google News
https://ift.tt/uDL8NRg
https://ift.tt/UWSAGj5
Bagikan Berita Ini
0 Response to "Examining the steep rise in monthly auto loan payments - Yahoo Finance"
Post a Comment