Though cars are roughly $10,000 more expensive than before the pandemic, a drop in price point may be coming soon. This is due to overpriced models flooding the car market, creating the conditions for a crash.
According to Kelley Blue Book, the market has reached more than 3 million cars for the first time since the pandemic, and prices have started to fall for the first time since 2020.
Recently, Untamed Motors, a car enthusiast YouTube channel, garnered over 1.3 million views when he detailed the conditions causing a “2025 car market crash.”
Car market conditions
According to Untamed Motors, insurance and interest rates are “through the roof right now,” and “repossession rates are the highest they’ve ever been.” Additionally, “inventory levels across all vehicle manufacturers, across all dealerships within the U.S. are the highest they’ve been in the last eight years.”
“Dealers are having to get desperate. They are really having to get creative now to move this inventory,” Untamed Motors said.
On top of the high prices and overstocked inventory, Untamed Motors also points out that there is a 23 percent increase in repossession, insurance premiums have doubled, and monthly loan payments are sitting at an average of $760 and above.
As an example, Untamed Motors discussed the difficulty that many dealers are having in selling popular models like the Toyota Tundra and Tacoma.
“New Toyota Tundras are sitting on dealership lots for over 200 days, up to 250 days. These used to fly off within a few weeks. Now people realize they aren’t all they are chalked up to be and they’re wildly overpriced,” Untamed Motors said.
This is due to a few factors. These include a much higher price of $60,000-70,000 for a new Tundra or Tacoma.
“I said it once before: People who buy the Toyota Tundra and the Toyota Tacoma are blue-collar working class. They’re not trying to come out here and spend $70,000, a $100,000 after the loan. These prices priced out their demographic, which is insane,” Untamed Motors said.
Another big sticking point is that the manufacturer’s suggested retail price—the amount a manufacturer suggests a new model is sold for—has risen 42 percent since 2019.
As a further example of the disconnect, Untamed Motors goes to a Ford dealership and shows how SUVs like the Ford Explorer are sitting at around $80,000, which, considering that manufacturers have shifted production to Mexico, is wildly overpriced.
He also points out that the only vehicles that are selling are affordable models like the Ford Maverick with an MSRP of $30,000.
The silver lining
According to Kelley Blue Book, the overpriced, overstocked car market does have a few silver linings. These include an increase in incentives designed to attract buyers. Averaging 7.7 percent, or $3,744, this is “the highest amount in over three years and about $200 more than September.”
This has created a buyer’s market for new cars. Kelley Blue Book reports that the number of automakers offering zero percent financing and other deals is increasing radically, with qualified buyers being able to secure deals like zero percent financing on non-hybrid models of the 2024 Kia Sportage.
Additionally, due to a lack of used vehicles, trade-in value has also increased.
According to the car site, this car market has also caused average monthly car payments to come down from a peak of $795 in December 2022 to $740 in the last two months. However, high interest rates have eaten up the costs.
So, though the market is still too expensive for many buyers, the high interest rates and surplus of new vehicles have the potential to burst the market and drastically bring down prices.
What do viewers think?
Viewers weren’t surprised by the skyrocketing prices and interest rates, with many claiming that consumers can just wait until the market becomes so desperate that deals are practically thrown at them.
“$100K for a pickup ? I say , let it rot …” one said.
“I can wait longer than the car companies/stealerships can,” a second added.
“The average American simply can’t afford new car prices, they’ve ballooned out of control. $100k for a 1/2 ton pickup? Ridiculous,” a viewer pointed out.
“I imagine the average consumer can’t afford a car more than 25K… And yet here are all of these cars over 30K,” another remarked.
“Instead of filling them with all the gadgets under the sun just make a simple, easy to use, basic and repairable at home truck. Keep it simple,” a viewer suggested.
The Daily Dot reached out to Untamed Motors via email.
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