Too bad for cars under $ 20,000
Over a decade ago now, when gasoline prices were reaching all-time highs, small cars were all the rage because they were stingy on gas and inexpensive. I remember a colleague at the time who was buying a Hummer and other colleagues saying how against the prevailing winds this purchase was. Shortly after, Hummer is dead. Of course nowadays Hummer is back and people can’t get enough of big cars, even with gas prices approaching all-time highs.
There have been a few theories as to why this is the case, the most compelling being that cars are more efficient these days than they were in 2008 and 2009, and therefore running an SUV doesn’t is not as expensive a proposition as it was back then. This is not exactly true – but I’m not sure how else to explain the large and persistent demand for expensive trucks and SUVs. It may also be the case that the new car market is another case where the rich get richer and the poor get poorer, in the sense that before the rich and the poor were in the mix, and now it’s just the rich.
There is also the shortage of chips, which prompted automakers to prioritize making their most profitable vehicles, which are their most expensive, with the prices of new cars now averaging over $ 45,000.
It’s a long way to say that those of us who are looking for a car under $ 20,000 have fewer options than ten years ago, because in America, the Honda Fit is dead, the Chevy Sonic is dead, the The Toyota Yaris is dead, and so is the Ford Fiesta. A little over a year ago, we cataloged the 17 cars you can buy in America for under $ 20,000; this list could be even shorter now. Also, don’t tell me the Ford Maverick costs less than $ 20,000 as its starting price of $ 19,995 doesn’t include destination charges and I doubt many people will buy a base Maverick with no options. , anyway, although I’d be glad to be wrong about that.
Anyway, Automotive News further away interrogates the landscape:
For dealerships who have traditionally welcomed buyers to the lower end of the market, the semiconductor shortage has made it difficult to stock vehicles that once sold below their purchase price with incentives.
âThis has been a problem for first-time buyers, students, or anyone looking to get a reliable, inexpensive car,â said Ayman Moussa, CEO of Carnamic Automotive Group in Northern California with Mitsubishi, Nissan, Hyundai Stores. and Kia.
” We sell [Mitsubishi] MSRP Mirages and used Mirages that we were selling for under $ 10,000 are no longer available now, âsaid Moussa. Ditto with its other brands. “They are not available to start, but when they arrive they are gone in 10 days.”
The most suspect here are the quotes from the automakers themselves. For example: Mark Reuss, president of GM, who laments that he wants GM to sell cheaper cars, but he just can’t, for opaque reasons.
“I don’t think they’re gone,” he said at an event last week. âWe used to offer cars in this segment, a lot of cars in this segment, and that segment has dried up. And it wasn’t because we weren’t offering such things, it just wasn’t there anymore. I have to be careful what we do there, but would love to have cars in this price range.
Auto News also says that since electric vehicles are so expensive, it’s probably wise not to expect more new cars under $ 20,000 for the foreseeable future, even including government subsidies. Let me also add another likely reason why the average price of a new car is going up, which is that a lot of people think they can afford a more expensive car than they actually can, thanks to 84-month auto loans and more. I don’t see how it will end badly. Get yourself a new Mitsubishi Mirage, I say, while you still can.