It sure feels like something has to give in the car market and rapid inflation on prices. I'm not sure what that looks like or when. But the pricing is going up so fast that I struggle to see this continuing for much longer. Especially at the same time I see the Model Y dropping price to start overlapping a Rav4. Things are getting a bit distorted. It's got to be pushing people out of the market. It's enough to keep me from buying a new Tundra. We may end up buying a Model Y to replace our RX350. The insurance issue is one of the big hurdles to me pulling the trigger. The insurance premium over the RX is more than the fuel cost savings would be. The home charging part is really compelling now that I have to commute to work regularly. I'd rather have a new GX550 or possibly a new Land Cruiser, but I don't think I'll be willing to spend $80K+ on the GX or $75k on the Land Cruiser.
I imagine as baseline inflation slows (hopefully) we'll start to see car prices year over year increase less than they have the last 4 model years or so. I really do think the other factor will be the ability to get more and more vehicles below MSRP, conceivably with some factory incentives on vehicles. It seems like subsidized interest rates are coming back in some cases also, at least for 36 or 48 month loans. This will likely freeze or actually lead to a slight drop in average transaction price (but regardless, it's hard to picture that getting below about $45K ever again).
The other interesting factors in this whole mess is that automotive manufacturers clearly got used to being able to derive more profit per unit moved since 2021 or so. At some point if sales start to slow way down, it'll be interesting to see if a focus on volume comes back (which you could already argue a company like Tesla is going after at this point). The second thing is the role of interest rates. Everyone is used to effectively free money with very low costs to borrow. Part of me is almost hoping the economy starts to tank in the next 6 to 9 months since I really am not looking forward to a 7 or 8 percent car loan at best. I don't think I've had a loan rate over 4.9% APR in my life on a vehicle.