Car Prices SPIKE $3,600 | Episode 1100
About this episode
Zach and Ray dive into the alarming reality of skyrocketing car prices, highlighting a massive $3,600 spike in used hybrid and EV prices alongside a near-$52,000 average for new vehicles. They analyze why relief is unlikely, pointing to global supply chain disruptions affecting Toyota and a sobering Bain and Company report predicting a significantly smaller U.S. auto market by 2040. The duo debates how automakers are shifting toward lower-volume, higher-margin sales, leaving average buyers priced out and potentially turning to autonomous ride-sharing or keeping older vehicles running longer.
Waymo
"Mark, who is a lover of EVs to the greatest extent I know, sent me the other day where Waymo and Robotaxi and Zook and whoever the others are, that we are reaching the expedited acceleration point for these type of vehicles to take over."
A company owned by Google's parent company that makes self-driving cars. They run a service where you can call a taxi through an app, and a car with no driver inside will show up to pick you up.
An autonomous driving technology company and subsidiary of Alphabet Inc. It operates commercial self-driving taxi services (robotaxis) in several major US cities, utilizing advanced lidar, radar, and camera systems to navigate without a human driver.
Zoox
"Mark, who is a lover of EVs to the greatest extent I know, sent me the other day where Waymo and Robotaxi and Zook and whoever the others are, that we are reaching the expedited acceleration point for these type of vehicles to take over."
A self-driving car company owned by Amazon. Unlike normal cars modified to drive themselves, they build unique carriage-style vehicles from scratch with no steering wheel or pedals.
An autonomous vehicle company and subsidiary of Amazon, developing purpose-built, bi-directional robotaxis designed specifically for ride-hailing in urban environments, featuring no steering wheel or traditional driver controls.
Yugo
"I only know of one brand of disposable cars that ever had any run at all in this country, and that was the Hugo. Hugo. Yeah, that was the closest thing to the big click of automobiles that wherever it broke down is just where you left it, because there was no point in fixing it."
An incredibly cheap, poorly made car imported from Eastern Europe in the 1980s. It was so unreliable and cheaply built that it became famous as a joke, with people saying it was cheaper to abandon it when it broke down than to fix it.
The Yugo (specifically the GV model in the US) was a subcompact hatchback manufactured by the Yugoslavian firm Zastava and imported to the United States in the 1980s. Infamous for its extremely low price, poor build quality, and terrible reliability, it became a pop-culture symbol of a disposable car.
Sam Fiorani
"But if you're paying $50,000 to $100,000, as Sam Fiorini from Auto Forecast Solutions was suggesting, I think people are expecting a greater longevity from a vehicle when you're paying that kind of money."
An expert who studies the car industry and predicts how many cars companies will build and sell in the future. News stations often interview him to explain why cars are getting more expensive or why there are shortages.
Vice President of Global Vehicle Forecasting at Auto Forecast Solutions. He is a prominent automotive industry analyst frequently quoted in national media for his insights on production volumes, supply chain constraints, and market trends.
USMCA auto content rules
"USMCA talks formally begin on July 1st or tomorrow, as the Trump administration seeks stricter auto content rules. Last time I checked, federal government regulations, tariffs, things like that have actually had a direct impact on vehicle prices here in the United States, and USMCA could do the exact same thing."
A trade agreement between the US, Mexico, and Canada that forces car companies to build more of their car parts in North America using higher-paid labor if they want to avoid paying high taxes (tariffs) when shipping cars across these borders.
The United States-Mexico-Canada Agreement (USMCA) established stricter rules of origin for the automotive sector compared to NAFTA. To qualify for tariff-free trade, a vehicle must have 75% of its components manufactured in North America, and a specific percentage of the labor must be performed by workers earning at least $16 USD per hour.
Toyota RAV4 Hybrid
"Here's a 2024 Toyota RAV4 XLE First Sale. This is in Arizona, and you can see here 32 days on the market, it's got 20,529 miles on it. Now this vehicle that I've been ahead and I found the original Carfax had an original MSRP of $36,484. So think again for a second here, they're asking $35,000 for a hybrid, and this is a hybrid, used RAV4 with almost 21,000 miles on it."
A very popular, mid-sized family SUV made by Toyota that uses both a gas engine and electric motors to save fuel. It is highly sought after because it is incredibly reliable, cheap to run, and holds its value extremely well on the used market.
The Toyota RAV4 Hybrid is a highly popular compact crossover SUV powered by a 2.5-liter four-cylinder engine paired with electric motors. It is a benchmark in the segment, offering standard all-wheel drive, exceptional fuel economy, and a reputation for bulletproof reliability. The model has faced severe inventory shortages, leading to high resale values and frequent dealership markups.
additional dealer markup
"Go see what a brand new 2026 would be, and forgetting what MSRP is, what's the adjusted market price? What is the dealer addendum for additional dealer markup on those vehicles?"
An extra fee that a car dealership tacks onto the price of a car just because the car is popular and hard to find. It is pure profit for the dealer and has nothing to do with the car's actual value from the manufacturer.
An amount added to the manufacturer's suggested retail price (MSRP) by a dealership, often listed on a supplemental window sticker ('addendum'). This markup is typically applied to high-demand or low-supply vehicles to capitalize on market conditions.
out-the-door price
"Wait a second. 2026 Rav4 XLEs are 60 grand OTT. There. That's insane. Yeah, I'm going to make a suggestion..."
The absolute final price you pay to buy a car, including all the hidden fees, taxes, and registration costs. It's the actual total amount of money you have to hand over to the dealer to take the car home.
The total final price a buyer pays to purchase a vehicle, including the vehicle cost, dealer fees, documentation fees, sales tax, registration, and any added accessories. It represents the actual amount of the check the buyer must write to drive the car away.
Rav4 Hybrid
"...suggestion to anybody that's looking for a Toyota Rav4 Hybrid. Go look at a Mazda CX50 Hybrid. It's the Toyota ..."
The Toyota RAV4 Hybrid is a five-passenger SUV that uses both a gas engine and an electric battery to help you save money on fuel. It is a hybrid, meaning it charges its own battery while you drive and does not need to be plugged into an electrical outlet. It is built by Toyota and is designed to be a simple, reliable, and easy-to-use vehicle for daily commuting and family trips.
The Toyota RAV4 Hybrid is a highly popular compact crossover SUV that combines a traditional gasoline engine with electric motors for improved fuel efficiency and performance. As one of the best-selling vehicles in its class, it is frequently discussed as the benchmark for practical, everyday family transportation. It is highly regarded for its standard all-wheel-drive system, spacious cabin, and strong resale value.
Mazda Cx50
"I'm going to make a suggestion to anybody that's looking for a Toyota Rav4 Hybrid. Go look at a Mazda CX50 Hybrid. It's the Toyota Hybrid engine system."
A stylish, slightly rugged SUV from Mazda that actually uses Toyota's hybrid engine technology under the hood. It gives buyers the fuel savings of a Toyota with the sporty feel and premium interior design of a Mazda.
The Mazda CX-50 Hybrid is a rugged compact crossover that utilizes Toyota's proven hybrid powertrain technology integrated into Mazda's distinctively styled and dynamically tuned chassis. This collaboration allows Mazda to offer class-leading fuel efficiency without sacrificing its signature sporty driving dynamics.
Consumer Reports test track
"going to be spending some time with our friends at Consumer Reports. I'm going to be up at their test track in Connecticut, so I will try my best to make sure that we can do a show..."
A private race track and testing facility in Connecticut where the consumer advocacy group Consumer Reports tests new cars. They buy the cars anonymously and push them to their limits to see how safe, reliable, and good they actually are.
The 327-acre Auto Test Center in East Haddam, Connecticut, where Consumer Reports conducts rigorous, independent testing on more than 50 vehicles a year. The facility features a multi-surface track, an off-road course, and specialized testing areas to evaluate safety, handling, and ride quality.
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