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It is quite interesting to see how the market works - less options, less for your money, and yet the consumers are paying MORE than MSRP. Just goes to show you how unpredictable everything is.
The other side of the equation is also fueled by the low interest rates for borrowers as a result of unprecedentedly low reserve rates set by the fed reserve. More (cheap-to-borrow) money out in the market, the more consumers are willing to spend despite the higher prices.
I am not sure when all this will come to an equilibrium, but certainly as someone in the market for a car, it’s not a good time to be a buyer. I think it’s also important to recognize that we, the consumers, may be setting a precedent for the dealers where they may expect this “market adjustment” to be commonplace in the future…
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