There are several factors to suggest prices for both new and used cars will continue to rise well into 2022 from the record levels already reached this year. At an average in 2021 of $45,000 for new cars and $25,000 for used cars - and rising - many consumers will likely find it either unpalatable or even impossible to buy a new car. That is great news for auto repair shops. CrossCheck can help seal the deal with sensible payment options as cash-strapped consumers will be increasingly likely to pay for repairs, rather than throw their older cars on the scrap heap.
The much-reported computer chip shortage continues to slow new-car manufacturing, putting a strain on supply. Also, the continued shift in consumer preference away from sedans to more expensive SUVs will continue to raise average prices.
However, demand will eventually cool as the average consumers hold onto their cars a year or two longer than they normally would have and wait for the inevitable pricing adjustment. Not great news for auto manufacturers, who will hope demand remains high even as supply rebounds. However, it could be fantastic news for the auto repair industry, as repair shops will be only too happy to keep older cars on the road longer.
The aftermarket parts and repair industry could be in for a banner year
Auto production dropped an astonishing 99% from February 2020 to April 2020. For all of 2020, production fell 23% and, at the latest reporting, production in all of 2021 is on pace to fall another 8% compared to last year. Meanwhile, demand for both new and used cars has steadily risen following generous stimulus payments from the federal government, in addition to historically low-interest rates for both auto and home loans.
The perfect storm of low supply, high demand and skyrocketing prices will almost certainly continue well into 2022, especially as semi-conductor production and delivery will likely not meet demand until sometime in 2023(!).
That old sedan will start to look better…
Meanwhile, look for more consumers to have second thoughts when deciding to buy new wheels, preferring instead to pay for that expensive fix to their old car, which might have otherwise prompted them to visit the new car lots during the holidays. This is where CrossCheck comes in.
Multiple Check is the ideal payment method when fixing the old car
Expensive repairs – everything from damaged catalytic converters to new transmissions – will require a hefty payment, which may be difficult for the average consumer. However, CrossCheck’s Multiple Check premium can help as it will allow the customer to write multiple checks, which will be deposited over time, perhaps coinciding with customers’ paydays.
CrossCheck even offers added protection for auto repair shops with Check Guarantee and Stop Payment Protection, which will ensure payment even if a check bounces or the customer requests the bank to stop payment.
