Tip Sheets

Surging metal prices should spare car buyers’ wallets — for now

Media Contact

Lindsey Knewstub

The war in Ukraine is driving up the price of metals used to manufacture cars, putting pressure on carmakers who are already reeling from the current supply-chain crisis.

Arthur Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations and an expert on the automotive sector, says while costs associated with the manufacturing and distribution of vehicles are rising, drivers aren’t likely to foot the bill unless metal costs continue to rise for more than six months.

Arthur Wheaton

Director of Labor Studies, ILR School

“There are many increasing costs associated with the manufacturing and distribution of vehicles. Rising gas prices may also impact costs. I am not sure automakers will immediately pass on these costs to consumers.

“Used car prices have skyrocketed in the past two years — much higher than the rate of inflation. The demand for new and used vehicles has given dealers the ability to charge above MSRP in 82% of new car sales. There is already a good profit margin.

“If the added metal costs continue to rise, we may see an increase in prices of the MSRP. I don’t expect massive increases in prices unless this trend continues for more than six months to a year.”

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