Access to a vehicle is critical to many of our day-to-day lives. It’s also an important backbone in driving our economy forward. Vehicles serve as a daily tool for roughly 75% of Americans in establishing routines – from going to work, school, the store, and more.
In the past few years, the item that is considered a staple for most has continued to feel out of reach, with many stating that it has become a “luxury purchase.” The costs of vehicle ownership have continued to rise, making it harder for business owners and consumers to fulfill their needs. We can break down vehicle affordability between new and used cars, as well as recognize what’s causing this rapid incline in prices — and how to avoid it.
New cars
Reports reveal that the average new vehicle will cost around $47,000 – the highest recorded price ever. Financing isn’t a feasible option either, with monthly payments around $700. This is close to the cost of a one-bedroom apartment in some cities. Since May, new vehicle affordability has continued to worsen since interest rates are soaring higher than they’ve ever been.
Used cars
Used vehicles are also out of reach because a shortage in new cars has led to a high demand for used ones. There has been a 16% increase in pricing for used vehicles in the past year alone. In many situations, a used car is proving to be just as expensive as a newer model.
Used vehicle owners have revealed that in today’s market, they’ve been able to sell their vehicles for more than they paid for them 3-4 years ago. Sadly, it’s no longer about selecting a vehicle you’re interested in, but rather selecting a vehicle that is actually affordable and available.
With vehicles of all types being unattainable, practical solutions such as Fluid Truck provide businesses with the opportunity to expand their business and meet clients’ needs without worry or hesitation.
What’s causing this steep incline in vehicle prices?
The U.S. economy is still experiencing the effects of the pandemic and the microchip shortage. Much of the microchips that were available in previous years were quickly eaten up by the high demand for work from home gear – laptops, tablets, and even gaming consoles. A limited supply in chips led to auto-manufacturers shifting their focus to more expensive cars, therefore increasing their likelihood of profit and making cars even more expensive for shoppers.
We can of course attribute rising vehicle prices to inflation, but the rise and fall of the vehicle market demand is a key driver in the inflation itself. Some even state that inflation’s effects on vehicle prices are minimal, pointing to scarcity as the bigger issue. There simply aren’t enough vehicles in stock to keep up with the demand.
Fortunately, resource sharing companies like Fluid Truck are working ahead of the demand to provide these vehicles at a consistent price for businesses in need.
How is this affecting Americans?
Affordability
To summarize, the uptick in interest rates, monthly payments, and general pricing makes new and used vehicles out of reach for most Americans. Most personal incomes can’t sustain these interest rates, and neither can business’ income.
Total median income grew 0.3% this year, while interest rates soared to 1.7% higher than previous rates. The costs of ownership aren’t even accounting for gas prices, repairs, insurance, and other bills associated with owning a vehicle.
Now more than ever, companies like Fluid Truck are leading the charge on vehicle affordability. Save cash on expenses that add up quickly and rest assured knowing you won’t be subject to price gouging. Avoid the hassle of dropping thousands up front, and pay over time with our flexible payment plans. Plus, with Fluid Truck, even long-term renters are not responsible for common vehicle maintenance like tire replacement, oil changes, or other repairs.
Accessibility
Affordability of course leads to our second point – accessibility. Vehicles are not accessible to many since they aren’t affordable, and most used cars sell before they even roll off the truck. This “distorted market” is challenging the way we buy and sell cars, therefore limiting availability.
Supply chain shortages and more also make scarcity of vehicles a growing concern.
Vehicles are accessible with Fluid Truck. Our product’s technological design allows you the convenience to have access to the vehicles you need whenever you need them – no waiting on a price decrease, key handoff, or even a rental counter. Our rental services are a simple, streamlined process to guarantee you access to the vehicle you need.
Inflation across the board
While not the only cause, the health of our vehicle market has strongly affected our current inflation. Prices in other markets rose 12.3% higher than they’ve been in the past four decades. With 80% of Americans unhappy with our economy’s current state, the government continues to crack down on inflation by discouraging consumer spending.
We’ve witnessed this in rising interest rates in other areas, thus making it harder to buy a home, invest in your business, or secure a loan for other reasons. While economists suspect a recession soon, there’s still no guaranteeing when these rates will lower.
Overcome the costs of vehicle ownership with Fluid Truck
Partner with Fluid Truck to overcome the strain to afford and access vehicles for their own business expansion. Fluid Truck is a Denver-based technology platform that lists box trucks, cargo vans, EVs, and more to rent on its platform – 24/7, 365 days a year all around the country.
Pay-as-you-go, rent as many vehicles as you need, and watch your business grow without having to worry about finding a vehicle or affording one. To learn more about how we can help your business thrive, click here.
