Automologist HAROLD weighs in.
2023 Toyota Land Cruiser
The prices of cars in the last 2 to 3 years have skyrocketed by about 50%, not to mention that many models are not immediately available with many buyers having to wait for 6 to 18 months to take delivery of their new car. Will car prices ever go down again? My economics professor would yell and say, “Law of supply and demand, guys.”
Here are the major reasons why the prices of cars have gone crazy:
Shortage of Chips. When the evil Covid-19 pandemic hit in 2020, automakers slowed down their microchip production; while the demand for cars have resumed today, chips production are not even at 60% of pre-pandemic levels. Cars these days are controlled by some intelligent microchips and need them to run.
2023 MG 5
Demand for Cars is High. When the pandemic was eventually under control due to mass (or forced) vaccination, the demand for cars suddenly shot up. The rich who had not travelled during the pandemic suddenly realized they had so much money in the bank and, still afraid to travel, started shopping for cars.
In the Philippines, in particular, the queue for the Toyota Land Cruiser is two years long and yet, some crazy rich Asians are willing to put down P1 to 2 million (USD 30,000 to 40,000) to reserve a unit. Some of the more impatient car buyers would pay an over P2 million premium to get the unit from the grey market. This is lunacy to me.
Banks are Bullish. Banks are making it easy for people to buy cars these days. But be careful—the interest rates are more than 50% higher compared to loan interest rates of 2019. Pre-pandemic, auto loans in the Philippines were at 6%-7% per annum; now it is at 10%-12%. Do the math: a higher base price plus higher interest rates equals inflated monthly amortizations! The happiest guys are the banks!
Adding insult to injury is the fact that most desired units are still not available. Toyota buyers have been forking out money for some odd-looking designs, such as the “Toyota Raze”, “Toyota Avanza” and “Toyota Veloz”, which are actually re-branded Daihatsus. Those who do not want to wait for the Japanese cars opt for the elegantly copied designs by Chinese brands like MG, Geely and GAC.
2023 Ford Everest
But the silent winners are the American and European brands selling China-made units, like Ford Everest and Territory and some Mercedes and Chevrolet models.
So, the question is, can I get a real value deal this 2023? For me, who has to earn their money the reasonably hard way, the answer is NO! But if you have nothing else to do with your money, go ahead—buy whatever is available. Feed your fancy.
But regardless of which I.C.E or Hybrid car you buy, you would need the NASA Hall of Fame Awardee engine and fuel products by X-1R to ensure better engine efficiency, fuel savings and pollution control. Available at: | Lazada | Shopee |
