[cs702]

...because of (a) car-price inflation kick-started by pandemic-era supply shocks, and (b) rising interest rates meant to drive down the rate of price inflation.

In short, both cars themselves and car-financing are more expensive.

[abeppu]

_But_ I also see some car ads with weirdly/implausibly low interest rates. My understanding was that in these cases the base price is artificially higher to subsidize below-market financing rates -- and in those cases even if you don't need the financing, you may be better off taking it. But the point ends up being that these are not independent phenomena; MSRP prices are set with financing in mind.

E.g. https://cars.usnews.com/cars-trucks/advice/interest-free-car...

[jen20]

“Supply shocks” make it sound like something that could not be anticipated, rather than something that was caused by active incompetence from auto manufacturers at the start of the pandemic.

[jonathankoren]

The supply shocks of checks notes three years ago, were certainly unanticipated. But it's been three years now, and prices haven't come down even though supply problems are clearing up. So what's up with prices? Well, to paraphrase the old sportscaster Warner Wolf, let's just go to the quarterly reports! Around the all the industries profits are setting records while they reassure investors that supply chain price increases are immaterial, and have full expectation that customers will simply accept the new prices.

https://www.kansascityfed.org/Economic%20Review/documents/93...

[a_subsystem]

When the government prints more money, all money loses value.

[jonathankoren]

A trite response that doesn't comport with the available evidence of today's economy. But hey, faith-based economics drives the world.

[a_subsystem]

Not sure what you're suggesting. Also,

>> doesn't comport with the available evidence of today's economy.

it doesn't?

[jonathankoren]

It helps when you actually read the comment you respond to, instead of knee jerk a bumper sticker.

[jandrese]

Even worse, when you dive into the "supply shocks" they were all in all fairly minor and tracked the decrease in demand. A lot of inflation is just companies using the excuse to raise prices and pad the bottom line.