Quote:
Originally Posted by redpoint5
I'm about 50/50 on which way I think things will head in the next 3 years...
The recession will mean less demand for new cars, so new cars will become available and dealerships won't be able to charge over MSRP for them (and manufacturers will offer rebates).
...but, in a recession, people hold onto their vehicles longer and used car inventory gets tighter, driving prices up.
Probably 10% of the 30% increase in used car prices is gobbled up by inflation and will never return to previous levels. That might leave a 20% reduction in prices on the table. I would expect no more reduction than that.
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I completely agree that the inflation will stick around. A 2023 dollar is going to be worth significantly less than a 2020 dollar and that won't change. I do expect the spread between new and used vehicle to return to normal though and new car prices to return to MSRP minus as opposed to MSRP being the starting bid on a new car.
As mentioned before my wife and I are looking to retire and travel. We wanted to work through a recession and then retire on the upswing. We thought that was going to be 2020 but the recession ended up only lasting a few months due to the massive response. (Which I believe was due to 2020 being an election year) Maybe the next one will be more normal.