If the United Auto Workers strike isn't settled soon, consumers will see higher prices for new cars — and not just the ones from Detroit.
“Guys at the dealerships are going to tell you, ‘The UAW this and that,’ but their lots are full of cars now,” says Ivan Drury, the director of insights at Edmunds, a provider of information about the auto industry. He estimates that at current inventory levels and the pace of vehicle sales, most car shoppers shouldn’t notice much change for a couple of months.
If the strike isn’t ended soon, however, there could be shortages of some makes and models –big sellers or vehicles that are already in short supply, such as Chevrolet Silverado and Tahoe, GMC Sierra and Ford F-Series pickups. The car companies have plants in Mexico that could keep producing some models – as long as they have a supply of parts.
As cars from Ford, GM and Stellantis, the successor to Fiat Chrysler, become harder to find, there will be a ripple effect. Consumers who need a vehicle would likely turn to nonunion competitors like Toyota, Honda and Tesla, who would be able to charge them more. Anyone shopping for a new, used or leased car right now will also be hit by higher interest rates. The average rate for a new-car loan this week stood at 7.46%, and for a used car, it was 8.06%, according to Bankrate.
The average price for a new vehicle jumped from $39,919 in 2020 to $48,798 so far this year, according to Kelley Blue Book. Cheap cars have, and consumers are forced into ever-longer loans to limit their monthly payments. Prices for used cars rose sharply in 2021 and 2022, but have slipped slightly this year.
UAW President Shawn Fain is sensitive to the impression that the union’s gains will come out of consumers’ pocketbooks. He points out that prices were rising before the strike, and says labor accounts for a fraction of the Big Three’s total costs.
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