Here’s why car prices are about to spike up again in New Jersey

🚗 Car prices were starting to fall in New Jersey as inventories stabilized

🚗 A new shortage of inventory could be caused by the Baltimore bridge collapse

🚗 Short-term prices could rise significantly

During the pandemic, prices for new and used cars spiked upwards significantly in New Jersey due to a lack of inventory. In recent months, inventory had stabilized, and the cost of a new vehicle had even started to fall.

Don't get used to it.

The collapse of the Francis Scott Key Bridge has closed the port of Baltimore and industry analysts say we will see the effects of that closure in the cost of a new car or truck.

Things had been improving

Despite high interest rates, Americans are still buying cars.

According to figures from J.D. Power, vehicle sales in the U.S. rose 5% from January through March. Automakers sold nearly 3.8 million vehicles in the first quarter of 2024.

The better news for consumers is prices had started coming down. The average sales price was $44,186, which is 3.6% lower than a year ago.

Much of the reason foe the decline in price was a rise in inventory. With more vehicles on the lot, dealers were starting to lower what consumers were ultimately paying.

Prices are going up again

Inventories of new vehicles are likely to get tight in the weeks and months ahead due to the closure of the Port of Baltimore.

Baltimore was the main destination for new vehicle shipments from both Detroit and foreign makers.

More than 800,000 new vehicles arrived at the Port of Baltimore every year.

Maryland Gov. Wes Moore told CNN that the port's closure was "not a Baltimore catastrophe, not a Maryland catastrophe," but a "national economic catastrophe."

With the port shut down indefinitely car makers have been scrambling to fine alternate shipping destinations.

There are plenty of ports available. Some of those shipments may be diverted to other East Coast ports, including Philadelphia and Port Newark/New York.

However, automakers also have to coordinate new trucking and rail routes to get the cars from the alternate port to dealers throughout the region.

Delays in shipping could squeeze inventories and consumer experts say that could result in short-term increases of 5% or more, wiping out the savings car buyers had been seeing since the start of the year.

How long will Port Baltimore be closed?

Unknown.

The largest waterborne crane in the United States has been brought in to clear the bridge wreckage.

Enough debris has been cleared to allow crews to perform the delicate and dangerous task of cutting up the steel and moving it out of the harbor, but the work will not be quick.

No estimates have been given as to when the port can reopen to shipping traffic.

The agencies in charge of removing the bridge wreckage said they will give priority to creating "a temporary alternate channel on the northeast side of the main channel."

How deep that channel is will determine which vessels can pass, but its almost certain the biggest container ships would not be able to use it initially.

Officials have not said when that temporary channel will be ready.

Report a correction 👈 | 👉 Contact our newsroom