5 ms·
...because of (a) car-price inflation kick-started by pandemic-era supply shocks, and (b) rising interest rates meant to drive down the rate of price inflation.
by cs702 3y ago
...because of (a) car-price inflation kick-started by pandemic-era supply shocks, and (b) rising interest rates meant to drive down the rate of price inflation.
In short, both cars themselves and car-financing are more expensive.
- jen20 3y ago“Supply shocks” make it sound like something that could not be anticipated, rather than something that was caused by active incompetence from auto manufacturers at the start of the pandemic.
- jandrese 3y agoEven worse, when you dive into the "supply shocks" they were all in all fairly minor and tracked the decrease in demand. A lot of inflation is just companies using the excuse to raise prices and pad the bottom line.
- jonathankoren 3y agoThe supply shocks of checks notes three years ago, were certainly unanticipated. But it's been three years now, and prices haven't come down even though supply problems are clearing up. So what's up with prices? Well, to paraphrase the old sportscaster Warner Wolf, let's just go to the quarterly reports! Around the all the industries profits are setting records while they reassure investors that supply chain price increases are immaterial, and have full expectation that customers will simply accept the new prices. https://www.kansascityfed.org/Economic%20Review/documents/9329/EconomicReviewV108N1GloverMustredelRiovonEndeBecker.pdf https://www.kansascityfed.org/Economic%20Review/documents/93...
- a_subsystem 3y agoWhen the government prints more money, all money loses value.
- jonathankoren 3y agoA trite response that doesn't comport with the available evidence of today's economy. But hey, faith-based economics drives the world.
- a_subsystem 3y agoNot sure what you're suggesting. Also, >> doesn't comport with the available evidence of today's economy. it doesn't?
- jonathankoren 3y agoIt helps when you actually read the comment you respond to, instead of knee jerk a bumper sticker.
- a_subsystem 3y agoFrom your linked article: >> the idea that firms are capitalizing on their market power by raising their prices higher and faster than the growth in their production costs. You think this is a plausible explanation in a competitive capitalist economy rather than the problem being trillions of dollars having been printed which devalues all money which makes prices go up which makes the corporations look like they made record profits because you HAVE to charge more money because all money is worth less and every input costs more? I'm not saying they didn't necessarily make record profits, btw, but if they did then good on them and that smells like a blood in the water type of business opportunity.
- abeppu 3y ago_But_ I also see some car ads with weirdly/implausibly low interest rates. My understanding was that in these cases the base price is artificially higher to subsidize below-market financing rates -- and in those cases even if you don't need the financing, you may be better off taking it. But the point ends up being that these are not independent phenomena; MSRP prices are set with financing in mind. E.g. https://cars.usnews.com/cars-trucks/advice/interest-free-car-deals https://cars.usnews.com/cars-trucks/advice/interest-free-car...