The car market has been facing setbacks that keep it under pressure for a minute now. The bad news for people who plan on getting or changing a car is that prices may continue to rise due to the below-named factors.
Due to a shortage of electrical components required for automobiles brought on by Russia’s invasion of Ukraine, S&P Global Mobility revised its production predictions for the United States for 2022 and 2023: it reduced its prediction for world light-duty vehicle manufacturing by approximately 25 million units. More importantly, there is still a shortage of the processors required to run everything from dashboards to diagnostics. Due to supply problems, Ford Motor and General Motors temporarily closed some U.S. manufacturing, and the industry as a whole is unable to ship as many automobiles as customers desire.
During COVID-19 lockdowns, supply chain issues developed as a result of structural causes, manpower constraints, and demand changes. New hazards and stress points are currently being created by changing geopolitical dynamics.
The cost of gasoline in the United States increased by 62 percent over the previous 12 months, according to the American Automobile Association (AAA), reaching a record-high price of $ 5 a gallon. While big trucks, jeeps, and larger SUVs can cost more than $100 to fill up, a sedan can often be filled for around $70. Since they spend a bigger portion of their income on transportation and energy costs, low-income households have been particularly badly hit.
Less expensive leasing is possible when interest rates decrease. Accordingly, the interest rate and leasing costs have increased as a result of the aforementioned activities. The Federal Reserve increased its policy interest rate for the first time since 2018 in an effort to combat a surge in quickly rising prices, and it forecasted six more rate rises for this year. The average cost of new automobile financing in the US was 39,540 dollars in the first quarter of 2022. The amount of used automobile loans within the same time period also demonstrates similar tendency.
As a result, due to the lack of chips and other supply-chain issues, vehicle sales in the US are predicted to drop 17.3% this year to their lowest level in ten years.
What is the Solution?
A decline in the supply of cars on the market, rising prices, and an increase in leasing costs – this is how the whole situation looks like for now BUT the need for people to travel by car remains. Therefore, we have prepared 5 tips on how to act in this scenario.
1. Watch an exclusive interview with Grand Prix Motors CEO Lenny Komsky to learn more about the market’s present state from the actual expert and to see how customers may get a new vehicle without investing all of their financial resources in it.
2. Buy-back program might be the perfect solution for those who lack the funds to make their lease payments in full. In the current market, terminating a lease early may be your best option. You have the option to safely turn in a lease early to lease a cheaper car with the proceeds with Grand Prix Motors. And if you happen to know a friend or coworker looking to trade in their car, you may receive $200 more for a recommendation!
3. The Grand Prix Motors buy-back program also offers a solution for people who have multiple used cars and are unsure of what to do with them. Even defunct used cars can be valuable. Sell it to Grand Prix Motors and receive cash.
4. The best course of action for those whose leases are about to expire is to use the leasing extension option and begin looking for a new car with a Grand Prix Motors expert six weeks prior to the end of the current lease. If you wait any longer, there is a chance that the current lease will expire and a new car for leasing won’t have enough time to arrive.
5. Switching to electric or hybrid vehicles is the answer for people who are fed up with the high cost of gas. There won’t be any oils or additional possibly “problematic” parts that need to be regularly changed, cleaned, or inspected. Additionally, the US government has launched a program to assist electric cars, so buyers can take advantage of tax incentives and other benefits. All-electric and plug-in hybrid automobiles purchased new in or after 2010 may be eligible for a federal income tax credit of up to $7,500, according to the official U.S. government source for fuel economy data.
Never forget that there are no “dead ends” with Grand Prix Motors. In your most challenging periods with the car market of today, we will help you find a solution. You wouldn’t want to pass up the chance to choose and lease your preferred car on reasonable terms and conditions! You can get in touch with us, ask for a personalized quotation, and our lease expert will provide you with a more thorough consultation!
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