Ok, what say ye FHC soothsayers? Cars and trucks seem to be selling for sticker price. If you're lucky. If not, thousands OVER sticker. I have heard of a Ford dealership and a GMC locally where they claim they will not tack on anything over sticker. Like they're giving you a great deal. So, this has only happened since covid began? I have NEVER bought a vehicle for anything less than a substantial discount off of list price. Has that changed forever? If so, it would seem that the dealers have entered an unprecedented era for profit. Assuming they can get the vehicles to sell. I would think that the cat is out of the bag. Once you establish such a 'standard,' this being sticker price or more, I would think it's here to stay. Or do you think free enterprise will win out and some will discount to move them off the lot. But does any dealer have significant inventory? One thing that would probably cure it all would be a horrific recession or even a depression. I need a new truck and it might be my last at my age and I am about to where I have no choice, just going to have to bite the bullet.
Simple economics - when supply 'finally' outstrips demand (or more importantly demand falls off a cliff due to either of the above circumstances...) then dealers/manufacturers will be begging those who can to take their products off their hands for whatever they can get for it!
I now own a 2020 Rav4 which best be the last "CAR" I will ever own. I paid cash for it and it wasn't cheap nor easy to acquire back at the height of 19, best not go there, you are now seeing that plus the effects of stupidity.
It happened to me in 2008. That was the beginning of the Great Recession or whatever they called it. They could not give trucks away things got so bad. Deals were being had. The Nissan salesman called me after we had been dickering for a week and said "What's it going to take?" I said, "Sensation, or I'm not going to buy it. Because I don't have to have it." He said, "How about $18,500." I said, "Deal. I'll be there in 30 minutes." And I am 24 miles from him, lol. The sticker on that truck in 2008 was $30,500 and I got it for $18,500. I have never heard anyone beat that deal and if so, I want to hear about it! I like good deal stories! I fear that without a big reset, we are stuck with sticker price. And that sucks.
It's all about supply chain issues. This is what I deal with in my profession as a Buyer. Now I just saw today that next year the chip supply issues will really start to get resolved and then process will be getting better on vehicles, and really anything with a chip in them. Even beyond chips, the whole supply chain is trending better ready month, for most commodities. You'll invariably have spikes though.
Interest rates going up; inflation with higher costs of food and housing are going to pinch prices in future. I see used car $ going down; not a brave prediction as they have been at almost new prices lately. Followed the bouncing ball; When some low income earners got the stimulus package and the unemployment rate was $600 higher than they’re earned income, rate. They went to the dealership with their new paystub’s and bought cars they couldn’t afford. When the stimulus stopped, those cars went to auction since they couldn’t get chips for the new cars they got top dollar when supply catches up; the used car price is going to plummet. Banks are trying to avoid this right now because they don’t want to write down their loans on that paper. BUT the selling of that paper has stopped
been through the housing meat grinder 5 times since 1975. interest rates 9% 1 home at 9% when selling about 3 years later rates were 15% ( new job 80mi away) lots of interested buyers no qualfiers took 1.5 years to sell ( this was $22k home ) #2 repro bought from bank 15% , home #3 bigger place family growing, again repo from same bank . Did a trade with bank on home 2 for 3 even up, 30k + a lot of sweat to make habital. rates at 20% again lots of lookers on #2 qualifying was problem #3 lost in Divorce, Took 7 years to get back on my feet after that. Lived in old trailer 10K for trailer, $350 mo for lot rent ( cheap vs anything else) sold to the trailer park for $2k worked to about 700 mo for it.) #4 paid cash $200k, banks- selfemployed- no help there reason for cash sold 6 years later for $300k repaired the basics repair cost about $20k rates at 3% never hit the listings, #5 same bull with banks- paid cash $249k rates at 2.5%, wasn't the way I wanted to do it with rates so low. All I have done here is replace windows ( glass panels only) which cut the propane bill from $1600 to $300/year. 3 acre property out in the sticks. Cut propane in half again (gallons used) with the addition of the wood stove.
Used prices are starting to correct, have been for a few months. Auction prices are still varying depends on who is there, big dealers are still spending up just to have a good unit. New dealers are starting to deal now in certain markets. Manufacturers are starting to give rebates. Manufacturers have also created an over abundance on some models, namely the ones nobody wants, because they’re the easiest to produce. Doesn’t matter what it is, the lower end stuff is obtainable fairly easy now. That’s the first thing that demand drops on, the people buying lower end stuff don’t have the extra money so they don’t buy. Give it a little more time and everything will come around to dealers begging for sales.
I'm not a new vehicle buyer anyways, but there is no way I'm buying a vehicle until I see its build date...if its been sitting in a parking lot waiting for the rest of its parts while the mice chew on everything, no thanks!!!
Dealers have time commitments/ loans for inventory . Inventory sitting on lot not able to be sold due to parts- got to be a nightmare. Meanwhile clock is ticking on the free part of loan. Dosen't help when they are over charging and that portion goes all the way back to the OEM. Drives used prices up + interst on loans rising so now that section is becoming stagnant as well. Something I have never understood - drop 20 grand on a car , no problem getting loan (maybe the car will last past the loan life), But gosh the hoops for a home loan, the home will , in all cases out live, mutiple generations- go figure.
I stopped loans back in 2000, haven't had one since then. Loans can outlast just about anything never get me going about PMI.
Yup that’s what I do every day. Dealer floor plans. Depending on the finance company it’s normally 60-90 days free interest. Always dealers want to move inventory within 45 days. With the market today on anything used it’s a crap shoot. Prices are tanking and dealers are upside down on their purchases a lot of times if they don’t buy right. Definitely nowhere near what 6 months ago was even when everything went to auction because they were getting well over what they could retail a piece for.
Kenworth in Chillicothe had hundreds of class 8 trucks sitting at the Ross county fairgrounds for over a year. They had a few chips and had to swap them out if they needed to move them. No doubt those trucks will be plagued with electrical gremlins from vermin. They even had to remove vagrants from living in the trucks. Hard pass.
I know Volvo/Mack if you walk in and order a class 8 nothing overly special you are being told a year minimum probably longer and won’t lock the price. My understanding is that Western Star won’t even give a rough idea of a timeframe. International is still just a 13 letter chit spreader that you can’t get.
Yes, it's getting better, but time will help, especially with chip supply helping with new car supply. Once that and possibly some reset of some sort that will help. People paying stupid amounts over for vehicles is ludicrous. Those top earners don't care if they pay 90k for a 50k bronco. What's worse is that 50k bronco that was ordered by some regular joe and then the dealer attempted to gouge the regular joe that waited 2 years for the bronco of his dreams because he didn't have it in writing what the actual cost would be of that vehicle. So now gets fleeced out of his dream rig, to have it sold by a dealer that bent him over, to a guy that saw the pretty bronco on the showroom floor and didn't care about paying the 40% "market adjustment price" . Dealers are supposedly going to be changing their habit too, from direction of the manufacturers. It's kind of a crazy time.
