The Effects of the UAW Strike on Used Car Sales

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The United Auto Workers (UAW) strike against the Detroit Big Three automakers has made history. However, its impact on car shoppers and the used car market is a topic of interest and one that may impact day-to-day consumers.  Here’s an exploration of how the strike has influenced used car sales.

The UAW strike has thrown the US auto market into turmoil. Auto sales still hadn’t entirely recovered from the pandemic, but car shopping in the United States could potentially change dramatically once more. The strike’s impact is nothing like the Covid pandemic and the computer chip shortages that largely shut down the entire US auto industry in recent years, but we are in uncharted waters nonetheless.

Dealerships will stay open. The average consumer will still be able to shop for cars, even at Ford, GM, and Stellantis dealers. They’re not going to shut down, as car dealerships are independent franchises that aren’t owned by the company whose logo is on the building. Most of those dealers have a decent amount of inventory that should last them weeks or months out.

Consumers who can’t get a new vehicle at the right price or with the right features will demand more used vehicles, increasing the price. At the same time, fewer consumers will trade in their existing vehicles, which will crimp the supply of used vehicles, further increasing prices and desirability of low-mileage pre-owned vehicles.

Dealerships have already started to take some action in recent weeks. In the beginning of September, when it looked like the strike was imminent, many dealers started to stock up on used vehicle inventory, especially in domestic makes, and some of the more sought-after models.

With potential new car production slowing, used car values have nowhere to go but up. Prices of wholesale used vehicles may have bottomed for the year, research shows. This could translate to pricing pressure as domestic automaker inventories start to run low and their competitors may not have the vehicles ready to pick up the demand.

The UAW strike has certainly had an impact on both new and used car sales. While it may not be as devastating as previous crises like the pandemic or chip shortages, it has led to changes in consumer behavior and market dynamics. As a result, we are seeing an increased demand for used cars and a potential rise in their prices. As the strike continues and new vehicle production dwindles we can only speculate on the future of new and used car sales.

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Jim Kelly

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