The UAW Strike and Your Car: 4 Things to Know Now

If you haven’t heard, the United Auto Workers (UAW) union went on strike September 15. To read more about the strike, check out this page or just Google “UAW strike” – there’s a lot about it out there. Here, we’ll stick to what we do best and cover how this affects the car market and, most importantly, how it could affect you.

A Bit of Background: The strike is starting at three plants – one each belonging to the “Big Three” – and could spread over time. The Big Three are General Motors (GM), Ford, and Stellantis (parent company to makes including Chrysler and Dodge). If your manufacturer-of-choice isn’t one of those, pay attention anyway – you could still be affected.

UPDATE: As of September 25, 2023, Ford has had some promising talks with the UAW. GM and Stellantis haven’t made the same strides, and the strike has expanded to an additional 38 locations, putting more pressure on supply chains.

Here’s what you need to know.

1. Initial economic projections are cautiously optimistic – for now.

Most vehicle manufacturers keep a certain level of inventory around; the national average is 58 days’ worth of vehicles. The three automakers affected by this strike would have tried to increase their supply in anticipation, bringing their numbers above the national average. All this to say, no one is running out of vehicles anytime soon. Unfortunately, that doesn’t mean we can all relax just yet.

2. No surprise: the longer the strike lasts, the worse things will get.

A long strike won’t just affect the Big Three’s inventory levels, but could indirectly trip other manufacturers up, too. If drivers turn to other manufacturers (by choice or necessity), their inventories may dwindle faster than projected, especially those that keep less inventory on hand.

If the strike spreads to, say, engine plants, production would slow even more. And before we even get to that point, the Big Three may choose to lay off more workers, further slowing production. And if production slows enough, orders may start getting cancelled, meaning suppliers feel the effects and may cancel orders, and….you get the picture.

3. Fewer new cars = higher used-car prices.

You may remember, in the not-too-distant past, how pandemic-induced supply chain issues resulted in some absurd used-car prices. The market has never really recovered from this – since 2019, used-car prices have risen 56.9% for RAM 1500s, 46.6% for Honda Civics, and 41.0% for Toyota RAV4s, to name a few.

This makes it a lot harder to get a good deal on a used car. However, it is good news for lessees. When used-car prices rise, leased vehicles are a hot, hot item. Purchasing a used car with an unknown history can be risky. Leased cars, on the other hand, generally have a verifiable maintenance history, clear mileage limits, wear-and-tear guides, etc. (All the restrictions you may or may not like if you lease.) As used car prices rise and inventory dwindles, dealerships and manufacturers get desperate to put leased vehicles back on their lots.

4. Incentives may be on the chopping block.

Even if the Big Three don’t initially raise car prices, incentives will likely be the first to go, effectively raising costs for drivers. If you’re counting on perks and negotiation to lower the cost of a vehicle purchase or lease renewal, you may want to wait – or have a tough chat with your wallet.

In conclusion, don’t panic just yet.

If you were planning on buying a new car in the coming months, be mindful of what may be to come, but make sure to weigh your options carefully before rushing into a decision. If you were planning on buying a used car, keep in mind that getting a good deal may get even harder as time goes on.

If you’re leasing a car, you’re in a relatively better situation than other drivers. You’ve already got a good vehicle on your hands, and you may be in a position to buy it out and keep it instead of rolling into another lease (or taking a go at the car market right now). Keep in mind, too, that it may get harder to get the exact vehicle you want if you lease again, including the right color, trim, or add-ons.

Interested in learning more about a lease buyout? Allow us to pull you aside and tell you about your lease-end options here.

And no matter your car-ownership status, if you’re aware of any repairs (especially any major ones) that your car will need in the coming months, you may want to take care of those now if you can.

We’ll be following developments with the strike, especially any that may affect the leased-car and used-car market. Follow this article for updates, and check us out here if you want to learn more about lease-end options and how to leave the dealership in the dust.

(If you're interested in a lease buyout already, get a quick start below. Or, give us a call at (888) 307-5197.)