Cars and Inflation

In case don't read the news plus your staff or private banking family office makes all of your purchases, you may missed that many things are more expensive now than they were in 2019.  Cars are one of these things; not enough supply being chased by increased amounts of money.  Many things are said to be at fault on the supply side, including COVID inspired supply chain problems and chip shortages (blame COVID, a fire in a major chip plant, and our very own snowpocalypse among others for causing the chip issues).  

Where am I going with this?  We bought a car this week and it was already 10% more expensive than if we'd bought the same car at the start of the summer.   I don't see them getting cheaper any time soon.   Furthermore, to get what we wanted we checked the dealer website frequently and were in contact with one of their sales associates for a couple of months (she had the parameters of what we were looking for). So, if you are looking for something new to drive it may take extra effort.  Silver lining, though, is that trade-in values are quite high.  I was pleasantly surprised at the amount they gave us for a 2015 BMW 335i with 80K miles.   My brother had a similar experience earlier in the summer when he sold a Ford F-150 Raptor for almost as much as he'd paid for it 2 years prior.  

Other thoughts: 

• BMW's 335 and 340 cars are fun to drive (as are, I assume, M3's).  You get a plenty of power from the inline 6 (with twin turbo) placed into a relatively small vehicle.  Also, the 3-series is a great size for fitting into the ever-tightening parking of central Austin.  
• Yes, the NXP facility in Oak Hill makes chips for cars and it was knocked offline by power and water shortages during the February 2021 winter storm.   
• If you are in the market for a used car (of the Certified Pre-Owned variety) then you may be impressed by the number of low mileage cars available.  This is because of COVID, of course.  Many leased BMWs, Audis, etc. sat in driveways while people worked from home and/or quarantined.  Now they're being turned in and sold.

[Update:  Here's some advice from Nerdwallet via Market Watch on buying a car these days.]

VW to Stop Selling Passat in the US

 

My 2007 VW Passat in New Mexico

I was somewhat disappointed to read that Volkswagen will be ending Passat sedan sales in the U.S. after the 2022 model year (the car will continue to be sold in Europe).  I probably would not have been surprised had I known sales had dropped to about 23,000 last year (down from 78,000 in 2015).  Why do I care about this mid-sized sedan I once called "the German Ford Taurus"?  I had a 2007 demo model I bought at a discount and proceeded to drive for the next 10 years.  It road tripped from Taos to Savannah to Asheville, and I put thousands of miles on it for business trips in Texas and Oklahoma.   It even drove down the long unpaved road from Hwy 550 to Chaco Canyon (though we thought it might become a permanent fixture) and survived a snowy mountain crossing driving it through the Carson National Forest.   It was great on the highway and deceptively large in cargo space.   To sum things up: it was a great car for 9 of the 10 years I owned it and the best value for my automotive dollar so far.  Had I sold it in 2017 I'd probably have even fonder memories.  

I've also driven the Passat's more exciting cousin, the Audi A4.  My brother used to have an A4 R-line which was quite fun to drive.  Assuming Audi doesn't kill the A4 to make way for more SUVs in the line-up, that's a car worth checking out.