Will the Baltimore Bridge Collapse Send Car Prices Skyward? What We Know

by Justin Fischer | Last updated Mar 28, 2024 | Car Buying, New Cars, News

In the early hours of March 26, 2024, the Francis Scott Key Bridge in Baltimore met a catastrophic fate as the Dali, a vessel with a capacity of 10,000 containers, collided with one of its pillars. This incident led to the immediate closure of the Port of Baltimore, a critical node in global logistics and trade. According to Maryland Governor Wes Moore, over 52 million tons of foreign cargo valued at around $80 billion were managed through this port last year, marking it as the 11th largest port in the United States.

Much of the Port’s trade involves the automotive industry, both domestic and international. This has car buyers wary of the tragic event’s possible impacts on car prices, just as new car prices are finally dropping.

Will the Baltimore bridge collapse impact car prices? If so, will the impact be immediate and broad, or more nuanced in nature? Let’s take a look at the knowns and unknowns as the situation stands today. 

The Impacts on the Automotive Industry

The Port of Baltimore is not just any port; it stands as the premier gateway for the import and export of automobiles and light trucks in the United States. In 2023, the port processed 847,158 cars and light trucks. Major automakers like Nissan, Toyota, General Motors, and Volkswagen as well as luxury brands such as Audi. Jaguar Land Rover, and Lamborghini heavily rely on this port for their operations.

Auto imports from Germany, Mexico, Japan and the United Kingdom heavily use the Port of Baltimore, but will have to find immediate alternatives.

The collapse of the Baltimore Bridge casts a shadow of uncertainty over the automotive industry. The immediate impact will be felt in exports, particularly for American manufacturers like General Motors. However, imports will surely be impacted as well. With $23 billion of the port’s imports in 2023 being autos and light trucks, the disruption is bound to send ripples through the market. 

The effects won’t be confined to Baltimore alone. The East Coast boasts eight major ports, with Baltimore ranking fourth in size. Ports like New York, Norfolk, and Savannah are already gearing up to absorb the diverted cargo. The shift could temporarily relieve some pressure, but the long-term ramifications remain uncertain, especially for European automakers who depend heavily on Baltimore’s roll-on/roll-off vehicle facilities.

Will the Baltimore Bridge Collapse Raise Car Prices?

Just as new car prices are finally beginning to fall, this disaster has the ability to reverse course for at least some of the auto market. To grasp where the new car market stands today, take a look at price trends over the past four months:

Despite the logistical nightmares, the current oversupply of new cars in the market might cushion the immediate economic impacts. New car prices have been falling for months. With a 90-day supply of new cars in the U.S., exceeding the usual 60 days, the overall automotive industry has a buffer against short-term disruptions. Some new cars now take over one year to sell on average.

See the Fastest and Slowest Selling Cars This Month

That’s not to say that relatively minor impacts are already being felt. Car Dealership Guy on X shared the first direct impacts known, with Jaguar Land Rover’s shipment of 800 vehicles being forced to detour.

The Clock Starts Now

Ultimately, impacts will be determined by how long it takes to rebuild. The original bridge took 5 years to construct. The US Coast Guard has said it may take ‘years’ to rebuild. If the Port of Baltimore is reopened sooner, impacts on the industry could be minimized. But if we’re talking 5 years without a fully operational port, new car prices could see a more pronounced impact.

We’ll update this page with the latest news on rebuilding and reopening as it becomes available.

Will Gas Prices Rise?

The bridge collapse could also tighten the screws on the region’s gasoline supply, particularly ethanol. With the Baltimore area relying on a blend of gasoline and ethanol delivered by train and barge, alternate routes must be found swiftly before East Coast gas prices tick upwards. Some industry analysts already predicted oil prices to approach $100/barrel before the bridge disaster.

You can always stay on top of regional gas price trends with AAA’s Gas Price Tracker.

Things Could Change

Following the Baltimore bridge collapse on March 26, repercussions on the automotive industry are still unfolding. As logistical networks strain under the sudden disruption, the resilience of the global trade and supply chain faces a significant test. For now, it appears that the following car brands are most likely to be affected in the near-term, according to Car Dealership Guy:

• Nissan
• Toyota
• General Motors
• Volvo Car
• Jaguar Land Rover
• Volkswagen including Audi, Lamborghini and Bentley

While supply chain constraints may be more immediate for these brands, the effects will be primarily on exports for OEMs like General Motors. Stay tuned to this page for the latest car market updates as more information becomes available.

Average Selling Prices Are Down 5% So Far in 2024 – Some Brands Are Dropping Even Faster

by Justin Fischer | Last updated Mar 25, 2024 | Car Buying, New Cars, News

In 2024’s car market, we’ll take good news where we can get it. Since 2018, new car prices have soared 32% on average. However, we’re seeing a different trend this spring: falling new car prices. Market-wide, the average transaction price for a new car sold in the U.S. has fallen by 5% since the start of the year. Yet, a closer look depicts a more nuanced picture, with certain brands experiencing significant price drops. Let’s delve into these changes and what they signify for consumers and the industry alike.

New Car Prices Are Falling, For Some More Than Others

Without further ado, take a look at the fresh data below. Then, we’ll dive into the details! I think it’s safe to say that new car prices are falling, regardless of whether or not MSRPs are. (Actually, MSRPs are falling too!)

Our latest analysis, leveraging CarEdge Data, offers a fresh perspective on the pricing strategies of major car manufacturers. Or perhaps this isn’t the result of strategies, but rather the result of months of oversupply combined with high interest rates.

Remarkably, brands like Dodge, Chevrolet, Cadillac, and Ford have seen substantial price reductions. Just how big are we talking? Average selling prices for these brands are down nearly 10% in just three months. 

Here’s a look at the data from top-selling makes in America:

Dodge leads with a price drop of over 12%, followed closely by others such as Chevrolet and Ford, which have dropped by more than 7% in a few months. Even Honda, Hyundai, Kia, and Mazda have seen falling prices too. Luxury car prices are down across the board.

The only car brands with rising car prices in 2024? For that, we look to two popular Japanese brands: Toyota and Subaru. With less inventory than most of the overall market (44 days of supply for Toyota, and 86 days of supply for Subaru), it’s not unexpected. At least both of these brands sell cars for well under today’s ridiculously high average price of roughly $47,000.

The Bigger Picture: The Bubble Has Burst!

Zooming out, overall new car price trends indicate a market that is correcting itself after years of steady increases. It’s about time. This change in direction is crucial for consumers seeking an affordable new car, especially as interest rates look to remain high for most if not all of 2024. 

How do we know that the new car market’s bubble is bursting? 

Consider the following:

• In March 2024, there’s an 80-day supply of new cars on dealer lots. Normally, this figure is closer to 60 days. The oversupply continues to grow.
• Incentive spending is growing: Discounts and incentives in January averaged 5.7% of the selling price, up from 5.5% in December and nearly 100% higher than a year ago.
• Low APR offers are growing in number, despite high interest rates. 
• As the data here shows, only two mainstream OEMS have rising selling prices in 2024. On average, transaction prices have fallen 5% this year.

In Conclusion: Prices Will Continue to Fall

Late March is the end of the quarter, and that means dealers and automakers alike are going all-out to sell cars. Come April, some of the best deals will vanish, but not for long. With new car inventory remaining high, there will still be deals in April, just not quite as many zero percent APR offers or great lease deals.

Wondering if you’re getting a good deal? Get behind-the-scenes industry insights with CarEdge Data. See local price and inventory metrics that typically only the dealers have. It’s empowered car buying for all!

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