Edmunds’ Jessica Caldwell shares update on inventory shortages, interest rates, and high car prices

Back in 2020, the automotive industry started experiencing supply chain delays that continue to impact the market today. On this edition of Inside Automotive, we’re pleased to welcome back Jessica Caldwell, executive director of industry insights for Edmunds, to give us an update on where things currently stand in the auto market. We’ll also take a look at some recently released data from Edmunds, all about summer car shopping.

Many vehicles listed for sale on car dealers’ websites have already been sold or customers are on waiting lists to receive them. For about a year, low new car inventory has plagued the auto industry. Moving into the second half of 2022, Caldwell says analysts were expecting to have a clear timeline as to when supply would normalize. However, there is no distinct end in sight which may explain the trepidation auto retail professionals have. Despite this, car dealers are reporting record profitability.

At the end of last year, automakers were making bullish predictions of where the year was going to go. Caldwell explains that now, automakers don’t know how the year will end, or if they do, they’re hesitant to announce it. Right now, circumstances are atypical because there is less inventory, rising interest rates, and high car prices. Usually, these factors would deter buyers, but due to low supply, they don’t necessarily have as significant of an impact.

In the first half of the year, average monthly payments for customers that finance their vehicles were incredibly high. New cars averaged over $600 per payment and used vehicles averaged over $500. Caldwell believes there is a slow down in consumer demand because prices are high for many commodities across the board. Consumers might not be willing to pay premium prices for vehicles that aren’t even on the lot yet. There will likely be a market segment that defers buying vehicles for these reasons.

For more great insight from Jessica Caldwell, watch the entire interview above.

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