zzdcar
Home
/
Reviews
/
Buying
/
Auto Industry Could Lose $22 Billion If Feds Raise Interest Rates
Auto Industry Could Lose $22 Billion If Feds Raise Interest Rates-October 2024
2024-02-19 EST 22:09:25

HOUSTON, TEXAS - JANUARY 04: A Toyota vehicle sits on the sales lot at the Joe Myers Toyota dealership on January 04, 2022 in Houston, Texas.

COVID-19 messed up pretty much everything, and the auto industry was no exception. There have been , and now, with the near certain raising of interest rates by the Federal Reserve, a perfect storm is gathering to make already expensive cars more unaffordable.

The Federal Reserve cut interest rates to zero two years ago when the economy was in a pandemic lockdown-induced free fall. But with the strengthening economy and rising inflation, the Reserve indicated this week that it would likely . Higher interest rates is the main tool the feds can use to tamp down on rising inflation.

How will this affect the auto industry, which is already facing supply chain difficulties? Who knows, an expert from J.D. Powers told :

Hiking rates would likely affect several U.S. sectors along with the automotive industry, with some analysts contending the increase will trigger more uncertainty in the auto world.

Tyson Jominy, vice president of data and analytics at the consumer intelligence company J.D. Power, said usually there is an automotive roadmap for when interest rates spike and decrease, but little precedent exists for a global pandemic and an auto supply-chain shortage.

“We don’t have a lot of experience with increasing rates with nothing to sell,” Jominy said.

The seems to be coming under control, but there are still widespread worries about other supply chain disruptions affecting rubber, plastics and steel, which has made it difficult to manufacture vehicles, NBC News reported. Wall Street has underscored concerns about rising interest rates and inflation.

J.D. Power estimates spiking interest rates would lead to a $15 billion loss in used vehicle sales and another $7 billion in losses on new vehicles.

With this rate hike, the industry could sell 150,000 fewer new cars and 500,000 fewer used cars this year, experts told NBC. Car shoppers are certainly feeling inflation pain. The average cost of a new car skyrocketed . The average used car cost $30,790. Low interest rates on car loans were the one enticement to shoppers still open to dealers, as auto makers slashed incentives due to the hot market. With not enough cars being built to meet demand, and supply chain issues continuing to affect manufacturing volume, what the auto market will look like after the rate hike is anyone’s guess.

Comments
Welcome to zzdcar comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Buying
What’s a Cosworth? Oh, About $26,500!
What’s a Cosworth? Oh, About $26,500!
It's Friday, and what better way to end the week than with a 1994 Escort from FORD. And wants you to know that stands for lying ver oads emonically. Yesterday's hooned its way into the hearts of 76% of you, proving that Walmart is more than a store, it's a...
Oct 18, 2026
You’re Such a Little Brat for $2,350!
You’re Such a Little Brat for $2,350!
When creating the Simpson's characters, Matt Groening named Bart from an anagram of Brat- reflecting his personality. Now has a Subaru that seems almost as crudely drawn and rowdy. Yesterday was close, but in the end the bagged a Crack Pipe vote of 55%. Despite that car's Jungle Book-sourced appellation,...
Oct 18, 2026
1977 Trabant Kombi for a Socialistic $4,250!
1977 Trabant Kombi for a Socialistic $4,250!
Is it really better to be dead than red? Today you can find out as brings an East German escapee Trabant in from the cold, Comrade. Given that 75% of you took a long, hearty drag from the Crack Pipe yesterday over the decadence of the , NPOCP thought it...
Oct 18, 2026
1979 Matra Simca Bagheera for a Jungle-Booking $10,000!
1979 Matra Simca Bagheera for a Jungle-Booking $10,000!
Everybody knew Bagheera, and nobody cared to cross his path. . . Thus Rudyard Kipling introduced the jungle cat who became Mowgli's chief protector. Today, has his namesake- at a price you shere khan afford. Yesterday's couldn't fake you out, and 91% of you gave it a hearty Crack Pipe...
Oct 18, 2026
Phony-Baloney Lambo For $35,000!
Phony-Baloney Lambo For $35,000!
Last year an Ohio man got himself caught trying to fake his own death in a plane crash. Today, has a Canadian Lambo, that you could own, which is just plain fake. On Monday we learned that 75% of you would plunk down KIA money for a , and that...
Oct 18, 2026
Be Unsafe at Any Speed for $14,000!
Be Unsafe at Any Speed for $14,000!
Is a vintage convertible with a rear-mounted flat six on your to-do list? Well, says to put away your lederhosen, because this one's not a Porsche. The post-war era in America brought tract housing, TV dinners and a steady stream of quirky little cars to our shores. GM, realizing that...
Oct 18, 2026
Copyright 2023-2026 - www.zzdcar.com All Rights Reserved