At the gas station this week, I encountered my first “I did this” sticker. Sold on Amazon and other e-commerce sites, it shows an image of President Joe Biden pointing – at gasoline prices.
Like the viral “Let’s Go Brandon!” Campaign that swept through Red America this fall, the sticker is a tough dig on Democrats and their policies, softened slightly with humor. But this sticker – and the one that comes with it with Nancy Pelosi – won’t hurt this administration as much as the lingering effects of the sticker shock in the auto-buying world.
Thanks to a transmission that left this world far too soon, I was immersed in this cold and barren landscape last week. The land is unrecognizable from what it looked like when I last bought a car over Christmas six years ago.
The parking lots have large expanses of open sidewalks. Websites promise “in transit” or “coming” vehicles. A few well-equipped Jeeps – Jeeps! – go for over $ 100,000, near the median price of a single-family home in West Virginia. More worryingly, some dealers are pricing in more than $ 10,000 above the Manufacturer’s Suggested Retail Price, or MSRP.
When asked about it, sellers shrug their shoulders and say “chip shortage” or “inflation,” which may be true, but ignores the bigger problem here, which is that millions of Americans are. about to be seriously underwater in their cars, just like they were home in 2009.
“Everything is so expensive now,” said one salesperson solicitously. “It’s inflation. I was just shopping for seafood for Christmas Eve and couldn’t believe the price of scallops.
When I pointed out that he wouldn’t try to trade these scallops for new ones in four years, the seller got no response. Not that I’m not sensitive to seafood supply chain issues. But that’s not a proper comparison. Scallops cannot be taken back.
December is usually one of the best times to buy a car, but not this year. Even before the chip shortage, the average payment for a new car had climbed to its current level: almost $ 600 per month, slightly less than my first mortgage payment 30 years ago. According to Consumer Reports, auto debt in the United States has skyrocketed over the past 10 years and now exceeds $ 1.4 trillion. For context, that’s more than Australia’s gross domestic product.
The number of people who are underwater in their car loans by the time they leave the parking lot is also increasing, more than the usual depreciation. “Almost half – 46% – of the loans in the data we looked at were underwater; that is, people owed more on the car – $ 3,700 on average – than the value of the vehicle, ”Ryan Felton wrote for Consumer Reports.
Plus, many people now finance new cars for six or seven years, which means their car might be ready to cube before they’ve finished paying for it. This is, in part, because the average price of a new car is at an all time high, $ 45,000; used cars, too, are setting records at an average price of $ 25,000. New and used vehicles have increased by approximately $ 5,000 over last year.
It’s so bad that financial advisers are giving this clear warning: don’t buy a car unless you have no other option.
“If your car works and can get you to work, then stick to it,” certified financial planner Jay Zigmont told Megan Leonhardt of Yahoo! Finance.
In this grim consumer landscape, the good news for Biden is that people are keeping their cars longer than in the past, so they may not realize the financial devastation of buying a new one. car before the halfway point. The average age of vehicles on the road is 12, reports the Wall Street Journal, and older cars that in the past could have been scrapped are showing up on dealership lots.
Having said that, I wasn’t prepared for a dealership ad for a 250,000-mile Toyota with a price tag of $ 7,000.
Did Joe Biden do this? Technically not, the pandemic and the resulting supply chain issues, along with labor shortages, would be responsible. (Put in the rampant Big Auto greed if you’re an anti-capitalist.)
But in a future election, Americans may well blame Biden or his party’s policies. In July, the President showed a bewildering disconnect from everyday consumer concerns when he mistakenly said car prices were back to where they were before the pandemic. A majority of Americans disapprove of the way it manages the economy. With cars being the second most important purchase most Americans will make, some car-poor Democrats may be left out of the Republican vote in 2024.