Important info from government agencies and the automotive industry
I read this morning (on Autoblog) that while overall new car and truck sales have taken an absolute bruising in recent months, the share of those sales going to new SUVs and trucks has actually increased. The article notes that this gain coincides with a slide in gas prices over the same time period: "Truck sales fell below 10% of overall vehicle sales back in May and June, but the price of gas falling from an average of $4.11 per gallon to $2.78 has helped the share of trucks rise to 14.1% of the overall market for September." This would also mean that trucks and SUVs should be making big gains right now, with oil prices plummeting. The huge incentives that auto makers have lobbed at these slow-sellers also probably plays a part. In fact, a friend of RepairPal recently brought in an ad from a Vegas newspaper that showed a still-hard-to-believe offer: buy a Dodge Ram, and they'll throw in a Dodge Caliber for a penny.
I expect this to be a once in a lifetime post. One of our advisors, Mort Schwartz, was inducted last week into the Automotive Hall of Fame in Dearborn Michigan. He was joined by Paul & Robert Galvin of Motorola fame, early Formula 1 driver Phil Hill, legendary automotive journalist Bob Irvin, and 3 others. Mort's 40-year career has included directorships and chairmanships of several major industry organizations, including the AAIA (Automotive Aftermarket Industry Association), ASE (National Institute for Automotive Service Excellence), and the GAAS (Global Automotive Aftermarket Symposium), to name a few. He served as CEO of several aftermarket companies and is a current director at WORLDPAC, a major aftermarket parts distributor. Mort has been a true friend and advocate for RepairPal, and we couldn't be happier about his receiving the highest level of recognition one can achieve within the industry.
Reuters recently reported that steel prices in the Persian Gulf rose 10 percent in a week. Because steel is now a global commodity, sustained price movements on the other side of the globe will eventually affect prices in the U.S. According to the Automotive Aftermarket Industry Association, from January through May of this year, metal auto parts prices rose about 10 percent, so they are likely to rise further. Why, you may ask, is this important? Car repair prices—including labor and parts—have historically risen at a very slow rate, usually 2 to 3 percent per year. With the U.S. economy struggling, the amount your mechanic or technician charges for his or her time is unlikely to rise much; it may even drop a bit. However, the higher prices of the parts s/he installs on your car are likely to keep overall car repair costs rising. This time of year, car dealers are eager to cut deals to reduce bloated inventories, so the decision to buy a new car (rather than keep your current rust bucket running a bit longer) may be getting easier.