I like watching the show, but I'm not too keen on how well he is at prediction things.

Autoblog.com

 

Well, what is the current average MSRP?

 

I'd be willing to guess its in the mid 20s.

 

Something like $35K.

I'm guessing that, like home prices, this isn't sustainable - at least not at ~16 million units/year. If indeed car prices jump another 10-15% - and I believe McElroy that they will, given the insane increase in raw material prices - then the auto industry had better get ready for an extended period of ~15M units/year.

 

Agreed. People will have to actually keep vehicles for a long time. I don't come from a "poor" family, but not a "rich" family either. Until a few years ago my parents sold the 1990 Asto Van that had 300,000 miles on it. My Dad's 1992 Silverado which he still owns topped 450,000 miles. The 4.3L barely has any power and we're putting in a carb'd 350 to just pull a boat with it... but the fact remains. People change vehicles like I change underwear; when 9 times out of 10 there is NOTHING wrong with the vehicle.

I predict people will hang on the their cars longer, which will lower automobile sales. The car companies should probably look to be profitable at lower production rates if they want to stay around very long...

I haven't been a fan of buying new vehicles as the cost is ridiculous. I just bought a 2002 Z28 for a little over 10k with only 37k on the clock; where a 2010 Z28 (or SS whatever) will be lower 30s. I don't understand spending 20k more, for virtually no reason other then it is new. I expect the "used" car market to EXPLODE in the next few years.

Hell you can buy a late 80s or early 90s car for 1,000 bucks that will still last you 50k miles.

 

yeah, ive seen the price of steel almost double in the last 3 months. the oems can only hold back for so long before they need to raise prices

 

That doesn't mean customers will be worse off as far as affordability is concerned. Because Chinese made vehicles will be at least as affordable as ever. And as ever, 'locally' made will be up against stiffer competition.

 

Yes, because we all have read of the great "quality" coming from China and the "high" standards they have for crashes. The sad part is, they will probably be sold at high volumes just because they are cheap.

 

This will be a good time to own a used car. If the average new car goes up $5,000, we might have a time were used cars don't depreciate at all. Especially fuel efficient cars.

 

Of course, why not? I can't wait until the day when there is actually some GOOD news to hear in this world for a change.

 

Bob Lutz said this exact same thing back in January, that the technology to increase fuel economy, safety standards, etc. was going to significantly increas the cost of vehicles. (He figured $6,000 on average.) A lot of people on the auto blog sites that reported the story said he was crazy. I'll be interested if they say the same about McElroy...

 

Cars are costing 1/3 to 1/2 the price of a house.
I've always said that's absurd for something that is used on average 5 years or less. vs a house you can live in for your whole life.
Oh well always bought used cars and probably will for a long time to come.

 

Maybe in some places. But the average US home price is around $300,000.

 

It was about $220K last year (and around $203K right now).

 

I was going to chime in on that.

I don't know where you can get a house for only twice or thrice the price of a new car, but I'm pretty sure it's someplace I wouldn't want to live.

Even in Phoenix in the midst of a housing crash, a modest priced house goes for well over 100 grand.