Car Prices are Expected to Rise a Lot

Are you driving a 1994 Toyota Tercel with rust in more places than not? You have somehow managed to get more miles on that car than the dollar amount of your house… and maybe even your neighbor’s house.

First of all, well done on keeping that old beater car running this far. However, it looks like you might be due for some car shopping. That being said, you might want to get out there as soon as you can since we are expecting car prices to rise quite a bit.

Why the Rapid Increase in Car Prices?

You may be wondering what’s behind the reason for a rapid increase in price when looking for a new ride. Put simply; it’s complicated. First, there are changes in the Fed interest rates. Any difference in these interest rates will have a ripple effect throughout the financial community.

That not only means that the loan you are planning on taking out could be affected, but the manufacturers of cars also require loans to maintain their day to day operations. If the Fed changes the interest rates, then their prices will also change, and consequently, an increase in their costs will ultimately pass on to the consumer.

A Quick Supply and Demand Review

Remember in your high school economics class when you learned about the laws of supply and demand?

It might be a while since you had that class but the main point to remember is that when supply goes down, prices will rise. The inverse is also true. It makes sense when you think about it. If you have a Fresno home for sale that is the only home selling for miles, you will find that you have a ton of buyers willing to pay a high price.

So, What do Homes and Cars Have in Common?

However, if your home is one of many out there, then you will quickly find that the cost of that same home will fall. This same logic applies to cars. There are currently low inventories, which means that there will be a higher demand for the vehicles that are out there and dealerships and sellers will know this. As a result, we should expect prices of cars to go up.

International Trade

Lastly, if you have listened to the news at all lately, you will likely have learned that a lot Is going on in the world of international trade. In a nutshell, tariffs are driving up costs, especially when considering that we are still uncertain as to the result of all the tariffs being implemented. If you find that many cars and car parts are imported, it is very likely that these tariffs will affect the price of cars in the very near future.


If you are wondering when the best time is to buy a car, that time is now. Many factors will be affecting the prices of goods that are quickly becoming real. While it is possible that rates of other products will be affected, the place where you can save money is on a purchase like a car.


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