Seems like vehicle buyers are buying—costs be damned
By Gary S. Vasilash
“Importantly, consumer spending will still advance despite higher prices due to pent-up demand and record savings balances.” That’s Richard Curtin, chief economist for the Surveys of Consumers, University of Michigan.
In the survey for May it was discovered that consumer confidence fell compared to the data for April. A concern is with inflation.
According to the U.S. Bureau of Labor Statistics (BLS), the Consumer Price Index was up by 4.2% for the 12-month period ending in the cruelest month. That was the highest rise since September 2008, when it hit 4.9%.
What was a big contributing factor to both the fall in consumer confidence and the increase in consumer prices? Vehicle prices.
In the case of used cars and trucks, the BLS measured a 10% increase in prices—the largest one-month increase since they started measuring back in 1953.
But it seems that shoppers aren’t all that concerned.
According to Cox Automotive:
“Four out of ten consumers are willing to pay above the manufacturer’s suggested retail price (MSRP), and those willing to pay over MSRP are willing to accept a 12% premium.”
Cox calculates that based on the average MSRP for new vehicles in April being $41,950, according to Kelley Blue Book, “many consumers are willing to pay $5,000 over sticker price.”
Somehow politicians are blamed for inflation.
Seems like consumers might have more than a cameo role in this scenario.