High prices for new and used cars were the norm in 2021, but if there were any hopes that prices would go back down this year, they may have already been dashed. In a recent interview with CNBC, the head of data and analytics for J.D. Power, Tyson Jominy, revealed that an estimated 89% of car buyers are paying above the sticker price or within 5% of it. Additionally, he noted that he doesn’t expect prices, or the demand for cars, to go down anytime soon.
Credit unions should also expect more of the same in 2022, which in this case means less new car loan growth, but opportunities for growth when it comes to used cars. There has been talk from the White House regarding efforts to get car prices back down through domestic production and improved factory infrastructure, but until the auto market balances itself out, credit unions will need to continue providing assistance to members navigating through the car buying process.
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