The auto workers strike will drive up car prices, but not right away -- unless consumers panic

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Car shoppers are heading for a new round of sticker shock if the strike by the United Auto Workers doesn’t end soon, particularly for popular vehicles that are already in short supply.

The number of vehicles on dealer lots will shrink the longer the walkout goes on. Dealers are likely to lose incentives that the manufacturers pay them to boost sales by cutting prices.Many analysts think it will take several weeks before dealer lots start to look a bit empty. Ford, General Motors and Stellantis built up inventories of vehicles ahead of Thursday night’s strike, and the UAW decided to limit the walkout to just three plants – at least for now.

The union said it had “reasonably productive conversations” with Ford on Saturday, while Stellantis gave details about its most recent offer to the union. While the supply of cars from Detroit’s Big Three will largely depend on how long the strike lasts and how quickly it spreads to other plants – there were rumors Friday that additional factories could be added next week – there are other factors.

Consumers who lease their vehicle and are coming to the end of the term could be especially vulnerable. Drury says leasing companies want their cars back while the used-car market is hot, and might be unwilling to extend the lease. 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.

 

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