Auto Prices May Soar Due To Post-Earthquake Turmoil
In the market for a new car? I don't want to stifle your negotiation tactics, but you might consider pulling the trigger rather than walking to the next dealership.
The Associated Press reports that prices on certain Japanese-built models are likely to increase as the fallout from the March 11 earthquake and tsunami continues. Plant closures and production slowdowns in Japan will eventually cause model shortages that will result in price hikes. So far, U.S. dealerships have had an ample supply of vehicles to keep prices steady, but eventually those supplies will dwindle.
The price hikes won't affect Japanese cars across the board because many are built here in the U.S. and not all models are are expected to be affected. Models that are likely to experience price increases include the Toyota Prius, Honda Fit, Honda CR-V, Honda Insight and Toyota Yaris.
The models affected are largely small, efficient vehicles, vehicles which have experienced a spike in demand as well as a dwindling supply. Rising gas prices--and uncertainty over how recent events in the Middle East will affect those prices--have caused a greater demand for small, fuel-efficient cars. At the same time, the events in Japan are shortening the supply.
Though prices have remained steady until now, increases are expected as early as later in the week. They could last for weeks or even months.