Consumer prices are already at record highs, and now the United Auto Workers (UAW) strike threatens to make things even worse. The UAW union has begun their strike at three plants owned by major automakers, including General Motors, Ford, and Stellantis. The main issue at hand is higher pay, with the UAW seeking a more than 40% pay raise over four years. An analysis by consulting firm Anderson Economic Group estimates that a strike by 143,000 UAW members could result in a total economic loss of over $5 billion after just 10 days.
For consumers, the strike could mean even higher prices for new cars. Car prices have already surged by 34% since the pandemic, reaching a record high of roughly $51,800 in August. The average used car now costs $31,000. If the strike continues, popular models like GM’s Tahoe and Yukon SUVs could become even harder to find, potentially leading to dealers charging more than the sticker price.
Automakers have been slowly building up vehicle inventory since the pandemic, but supply is still only about one-fifth of what it was in 2019. This means that a strike would have a much quicker and more significant impact on dealers and customers. Used vehicle prices are also likely to be affected, as they are directly tied to new vehicle production and availability. This could halt the recent decline in prices and even cause them to reverse.
Higher car prices also contribute to soaring car insurance premiums. More expensive cars cost more to repair and replace, and a prolonged UAW strike could further drive up costs. Insurance rates are already expected to rise by 4% by the end of the year. If the strike lasts longer or affects a greater segment of the automobile industry, it could lead to a continued increase in used car prices and more expensive claims for insurers.
Rising prices at the gas pump are another factor contributing to inflation. Gas prices soared by over 10% in August, and surging oil prices continue to put pressure on gas prices. However, there may be some relief in sight as producers switch to cheaper winter blend fuel and as the U.S. moves out of the peak driving season.
In these uncertain times, it’s important to take control of your car ownership costs. Shopping around for cheaper auto insurance premiums and comparing multiple providers can help you save money.
