We’ve been hearing a lot about how expensive used vehicles are. There are so many stories of people who bought a new vehicle just a few years ago and recently sold it for more than what they originally paid.
I can’t help but wonder if this is one last hurrah for the traditional gasoline-powered vehicle that has dominated the roads for multiple generations. Gasoline-powered vehicles are on the way to obsolescence due to advancements in autonomous vehicles and due to regulations that will restrict and eventually ban the sale of brand new gasoline-powered cars. Place your bets on which will replace the horseless carriage first. Will it be the gasless carriage or the driverless carriage? (NOTE: I’m assuming that all driverless carriages will be gasless as well.)
While the regualation allows people to keep driving their pre-existing gasoline-powered vehicles and to buy and sell them in the used market, the writing is on the wall. The number of gasoline-powered vehicles on the road will decline due to attrition from collisions, natural disasters, rust damage, excess wear and tear, dead transmissions, dead engines, dead electrical systems, etc. This means reduced demand for parts, which will prompt parts manufacturers to cut back or cease production of many parts. This will make it harder for the owners of gasoline-powered vehicles to get them repaired, and that will send more cars towards the Highway in the Sky. This problem has always affected old vehicles in the past, but the trend will be accelerated. The slower-selling vehicles will be affected first, but it will take longer for the top-selling and more widely-owned vehicles to become obsolete. Thus, I’d expect Mitsubishis to be affected more quickly than Honda Civics and Toyota Corollas. I’d also expect many gas-powered cars to end up south of the Mason-Dixon line, in Appalachia, or in the sparsely populated Great Plains, Rocky Mountains, and Intermountain West. I’d expect it to take longer to justify the investment in charging stations in these places. (How many people in northwestern South Dakota own an electric vehicle? There’s a spot there that’s over 100 miles from the nearest McDonald’s.)
Given the above implications, why buy a brand new gasoline-powered vehicle? Once the current vehicle shortages get corrected, this trend will matter, new vehicle sales will drop, and new gasoline-powered vehicles will depreciate rapidly. Leasing a vehicle will become much more expensive when the leasing companies reduce their estimates of the projected resale values. I expect many people to keep their gasoline-powered vehicles longer or buy a used vehicle to tide themselves over for a few years while waiting for the electric vehicle ownership experience to improve. (This involves more charging stations, cheaper purchase prices, better range, etc.)
When the driverless carriage takes over, this will be the final nail in the coffin of today’s gasoline-powered cars. This will also be bad news for the resale values of the gasless-but-not-driverless carriages.
Of course, I expect that a few gasoline-powered vehicles to be collectible. Examples include Mustangs, Camaros, and the Dodge Challenger with the 707-horsepower HellCat engine. These are special vehicles and are NOT bought for practical reasons.