Livonia, Michigan – 16 February 2021
1. Larry Parsons gets into his 2019 Ford F-150 pickup truck and begins to drive
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2. SOUNDBITE (English) Larry Parsons, truck buyer:
"We did look at new trucks. But the price is excessive on a truck. And some trucks cost upwards of $70,000."
3. Parsons drives past
Dexter, Michigan – 1 February 2021
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4. SOUNDBITE (English) Charlie Chesbrough, senior economist, Cox Automotive:
"We have seen vehicle prices been going up in the new market faster than wages have been going up, faster than incomes have been going up. And so, this has meant that these vehicle prices have been getting more and more of a stretch for the average American."
Fenton Township, Michigan – 28 January 2021
5. Various of employees organizing vehicle keys at a LaFontaine auto dealership
6. Various of the exterior of the LaFontaine dealership, including used cars for sale
7. SOUNDBITE (English) Ryan LaFontaine, auto dealer:
"So, we're going to make sure that we're a one-size-fits-all. It can't be people that just have great income."
8. Various of both the exterior and the interior of the dealership's service department
Novi, Michigan – 28 January 2021
9. Various of a Carvana location
Livonia, Michigan – 16 February 2021
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10. SOUNDBITE (English) Larry Parsons, truck buyer:
"It's to the point to where it's ridiculous. I don't know how anybody can afford paying as much for a vehicle or a truck as a house."
11. Various of Parsons' truck and him driving off
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A chain reaction touched off by the coronavirus pandemic has pushed new-vehicle prices to record highs and dramatically driven up the cost of used ones.
Prices are so high that many U.S. buyers have been forced out of the new-vehicle market and into used.
The price spike essentially has created three classes of auto buyers: Those wealthy enough to afford new vehicles; people with enough money to buy late-model used cars; and those with lower incomes or poor credit who have to purchase less-reliable older vehicles.
Dealers and industry analysts say the increases come at a terrible time for buyers, many of whom are looking for vehicles to avoid public transit or ride hailing due to the virus.
The sky-high prices could endure or rise even further for months or years with new vehicle supplies tight and fewer trade-ins coming to dealers' lots.
Charlie Chesbrough, senior economist for Cox Automotive, predicts a tight used-vehicle market with high prices for several more years.
When Larry Parsons of Hartland Township, Michigan, outside of Detroit, went to buy a pickup truck in August, he quickly decided to buy used.
"We did look at new trucks, but the price is excessive," Parsons said. "Some trucks cost upwards of $70,000."
Instead, he bought a black 2019 Ford F-150 with 29,000 miles on it for $37,000 that was around $52,000 when new. He also bought an 84-month warranty, so it's covered while he's still making payments.
Older vehicles with over 100,000 miles on them are in high demand now, said Ryan LaFontaine, CEO of a 20-dealer chain in Michigan that includes two used-only stores.
"We're going to make sure that we're a one-size-fits-all. It can't be people that just have great income," LaFontaine said.
