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Auto industry slowly bouncing back after challenging few years

Posted at 6:08 PM, Feb 21, 2023
and last updated 2023-02-21 19:44:39-05

KILLEEN, Texas — From chip shortages to supply chain issues caused by the pandemic, the auto sales industry has had a challenging couple of years.

”The average new car in 2019 was around $38,000,” said Dr. Rob Tennant, Assistant Professor of Accounting, Texas A&M University Central Texas.

“The average new car in America now, is around $50,000. That's a 30% increase since then.”

It wasn’t just the cost of new cars that skyrocketed — but the price of used cars as well.

”It was something that we’d never seen before,” said Brent Rayfield, Managing Partner of Nyle Maxwell in Killeen.

“There were used cars that were more expensive than new cars. You had customers that were trading out of cars that they’d loaned for two years, that were $2,000, $3,000, $4,000 more than they actually bought it for.”

Dealership lots around town were once empty, but not anymore — and now that supply isn’t an issue, dealers are facing a new challenge; sky high interest rates.

”That’s one of the biggest issues that we’re facing right now, the extremely high interest rates,” Rayfield said.

“They’re at an all-time high right now. I think the prime is at 7.5 percent.”

However, there are a few positives at some dealerships recently.

”Being a new car dealer, the factory will step in and do some incentivized rates,” Rayfield said.

“We have zero percent on Ram trucks right now and we 1.9 percent on some Jeep Cherokees as well.”

While prices and interest rates are still rising, inventory is higher — and many dealerships are offering thousands in discounts and incentives.