SOUTHFIELD, Mich. (WXYZ) — Many are wondering if there is a prolonged UAW strike against the Big Three, how will that impact car inventory and the car-buying outlook for the rest of the year.
If the UAW decides to strike against all three U.S. automakers — Ford, GM, and Stellantis — it would be a historic first that could be devastating for the U.S. auto industry... and would likely lead to higher prices on car lots.
Union President Shawn Fain said a strike would initially be at a limited number targeted plant locations but could move to other sites — which would impact more lines.
Typically, the final months of the year can be a good time to find deals, with the model year sell-down and Black Friday events. But what if autoworkers walk off the assembly line?
”If there is indeed a strike, how much do you think it will impact car buying?" I asked Jessica Caldwell, Executive Director of Insights for Edmunds.
"If there is a strike, I think the big question is where is the strike happening? Which vehicle lines does it affect? Because I think that that probably will be the most important," she said. "I think there are some automakers, maybe Stellantis, that can ride out the strike a little bit better. Their inventories look a little bit higher. Again, it probably depends on which model line that's going to affect."
Caldwell said during the strike back in 2019 against General Motors that lasted 40 days, GM did see an impact on its truck line.
If a strike happens this fall, Caldwell said end-of-the-year car buyers may look beyond the Big Three.
"I think that's when automakers start to lose out because consumers will go to other brands. And once you do that, that's a big danger because they may never come back," she said.
Caldwell said consumers are already dealing with low inventory, high prices, and the highest interest rates for new vehicle loans in 15 years.
“We've seen interest rates go up to 7.4% on average in August," Caldwell said. "It hasn't been that way since 2008, since the Great Recession. That's really making prices and payments go up really high and just making really new cars unaffordable for consumers."
Caldwell said monthly payments hit an all-time high last month – $738 on average for a new vehicle.
Her advice for car buyers?
- Shop around for the best auto loan — whether it be your bank, a credit union, or one of the automakers' financing companies.
- Be open-minded about what to buy — researching new and used options as well as smaller cars and sedans.
- Don't limit your search to a local market — especially if you're considering certified pre-owned cars.
- See how much your car is worth — if you're considering re-selling it or trading it in. You may be surprised at how much you'd get.
Caldwell said Edmunds is seeing demand right now in the market on the lower end, less-expensive vehicles like compact cars, midsize cars, or compact SUVs. That's a change from the high demand for large SUVs and full-size trucks we had been seeing.
She said the higher interest rates are fueling that, causing people to downsize in their decisions.
