There are multiple reasons why new vehicle prices are rising. One is the supply of new cars and trucks is tightening.
Before the 2020 pandemic, there were 3 million to 3.5 million new vehicles on dealer lots, according to John Murphy, principal of Murphy Automotive Partners. Today, it’s closer to 2.6 million vehicles.
“We’ve never seen anything like this before,” Murphy said in an interview.
Murphy is a former auto analyst with Bank of America. He now runs his own firm.
STELLANTIS
He issued a report in June the “freshest” vehicle offerings will determine which automakers perform the best amid industry shifts.
One of those shifts is the tight supply of new cars and trucks. New vehicles cost about $50,000 on average.
Murphy said it will be “another one or two years” before vehicle supply “is corrected.”
“It’s a kind of unique environment,” he added.
Since 2020, there has been “an EV head fake,” the veteran industry analyst said.