It’s possible that both new and used cars are going to increase in price for the foreseeable future. There are many reasons for this, one of which is the United Auto Workers strike that has now been going on for weeks. Not only has the strike closed plants, but it has led to the layoffs of related workers. For instance, some workers ordinarily work to create parts and materials that are then sent to a plant where vehicles are assembled. But if that plant is on strike, there is no need for the parts, and so the workers making them are also increasingly being laid off. Essentially, it’s a trickle-down process that is affecting the entire auto industry.
The impact the strike has had on the United States economy is fairly large. CBS News claims that just three weeks of the strike cost around $5.5 billion in total. The majority of the losses are for the auto manufacturers themselves, but parts suppliers have also lost an estimated $1.6 billion.
Influencing the market
It’s important to keep this in mind when shopping for a new car. It means that the supply of vehicles is going to remain lower than it would be otherwise, which pushes prices up. A low supply also tells dealers that people may be a bit more desperate to purchase a vehicle. The demand is high, which means that this overall shift in new car sales could also affect the used car market. Some people are being priced out of the new car market and forced to look at used vehicles, and the prices of those vehicles will generally go up as well due to increased demand.
Could this lead to auto fraud?
This doesn’t necessarily mean dealers are going to intentionally commit fraud, but it does create the right environment for fraud. Will a dealer try to hide issues with a used vehicle because they know that they can make a sale in a market defined by high demand? Will dealers use tactics like manipulation to convince people to buy vehicles for much more than they’re worth? As a result of these very real risks, those who feel that they have faced auto dealer fraud need to know what legal options they have at their disposal and should seek legal guidance whenever appropriate, accordingly.