STAUNTON, Va. (WHSV) – Car prices have been on the rise over the last few years.
Eric Obaugh, owner of Charlie Obaugh Auto Group, said car prices have been going up faster in about the last 10 years, but he believes it has gotten worse since the COVID-19 pandemic.
“This past administration in D.C. has created a lot of issues with labor costs, parts costs, fuel costs,” Obaugh said.
Obaugh said business has been higher at the dealership over the last few years.
“We are coming up with creative ideas to see how we can do it with better incentives, better discounts,” Obaugh said. “We are able to get more value out of used cars, [and] we have leasing, so we have a lot of different options on how we are doing it.”
Obaugh said another problem has been rising interest rates.
“Interest on our floor plan has sky-rocketed. It is actually three times what is was four years ago, so that has been a huge cost for us. As they are producing more vehicles, our interest costs are going up, so that is one thing that has taken away from our profitability,” Obaugh said.
Tariffs encourage buying goods that are produced domestically with a “price advantage” rather than outsourcing from foreign suppliers, according to the World Trade Organization. With the possibility of tariffs being put in place with President-elect Donald Trump’s second administration, Obaugh said he believes the new tariffs will lead to more car manufacturing jobs in the states.
“A high majority of our vehicles are built in America, and so I think it will help us out, and then we will also be able to bring more production back into America where it needs to be where we have more production, more jobs,” Obaugh said.
If the tariffs are put in place, Obaugh said car manufacturers will have to make adjustments to offset higher costs on foreign parts and production.
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