Breaking the addiction of insanely high car prices

1941 Views 27 Replies 15 Participants Last post by big swede, 6 d ago

RamJet502

Discussion Starter · 15 d ago

Why Is Inflation So Stubborn? Cars Are Part of the Answer. (yahoo.com)

"dealer markups accounted for 35% to 62% of total new-vehicle consumer inflation from 2019 to 2022"

I still cannot believe people were willing to pay more than what cars were actually worth.

"Automakers, loath to relinquish profits enabled by scarcity, started talking about exercising “discipline” in their production targets."

No wonder we're still seeing relatively empty car lots.

"According to TransUnion, the average monthly payment for a new car rose to $736 in the first quarter of 2023, from $585 two years before. Used cars average $523 per month, up $110 over the same period."

And the problem is prices never really come back down. They might normalize for a while, but we'll continue to see an upward trend. Pretty soon, $100K trucks will be the norm.

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eaton53

· #2 · 15 d ago

RamJet502 said:
Pretty soon, $100K trucks will be the norm.

Or there could be a limited number of foolish people available to buy.
At some point sales will go completely into the toilet.
All they are doing with this tactic is kicking the door wide open so the Chinese can just walk on in.

Reactions: 5

RamJet502

Discussion Starter · #3 · 15 d ago

eaton53 said:
All they are doing with this tactic is kicking the door wide open so the Chinese can just walk on in.

I agree that people will eventually start to push back. I however do not think China will ever work their way into the American full-size truck or SUV market, most people in that market are ardently loyal to Chevy, Ford, and Dodge (Ram). The exception to the rule is Toyota, but the only reason Tundras sell as well as they do is perceived bulletproof reliability.

eaton53

· #4 · 15 d ago

RamJet502 said:
I agree that people will eventually start to push back. I however do not think China will ever work their way into the American full-size truck or SUV market, most people in that market are ardently loyal to Chevy, Ford, and Dodge (Ram). The exception to the rule is Toyota, but the only reason Tundras sell as well as they do is perceived bulletproof reliability.

The Chinese don't need to do trucks.
The CUV market is really big and where opportunity awaits.
It's basically the same game H/K play.

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BlackGTP

· #5 · 15 d ago

eaton53 said:
The Chinese don't need to do trucks.
The CUV market is really big and where opportunity awaits.
It's basically the same game H/K play.

But, as Chinese makes (if they ever come) take a bite out of H/K, Honda, Toyota, etc. they'll be looking for opportunities to maintain their sales numbers and profits. The nice, big, juicy full sized truck market might be a tempting target for them as there aren't many other places to turn to. It might be a tough market to enter, but out of desperation they might throw more resources at it than past attempts.

Unrelated, that Escalade picture - awesome!

Wheel Tire Car Sky Vehicle

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eaton53

· #6 · 15 d ago

BlackGTP said:
But, as Chinese makes (if they ever come) take a bite out of H/K, Honda, Toyota, etc. they'll be looking for opportunities to maintain their sales numbers and profits. The nice, big, juicy full sized truck market might be a tempting target for them as there aren't many other places to turn to. It might be a tough market to enter, but out of desperation they might throw more resources at it than past attempts.

Unrelated, that Escalade picture - awesome!

View attachment 69662

Good luck to 'em.
FS trucks is where GM, Ford & Dodge don't $%^& around.

Reactions: 2

RamJet502

Discussion Starter · #7 · 15 d ago

BlackGTP said:
Unrelated, that Escalade picture - awesome!

Unbelievably awesome! I would do unforgiveable things to own that vehicle.

Reactions: 4

BlackGTP

· #8 · 15 d ago

Dealers Wrestle With Dreaded Incentives As New Car Stock Piles Up (msn.com)

Perhaps some incentives will start creeping in.

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Bigdog

· #9 · 15 d ago

BlackGTP said:
Dealers Wrestle With Dreaded Incentives As New Car Stock Piles Up (msn.com)

Perhaps some incentives will start creeping in.

They will be back to putting large incentives and imo larger then we have ever seen before, on the hoods soon. These msrp's, coupled with the banks walking out on dealerships and in turn a drastic rise in interest rates will force many of these dealers hand.

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dannyg

· #10 · 15 d ago

BlackGTP said:
Dealers Wrestle With Dreaded Incentives As New Car Stock Piles Up (msn.com)

Perhaps some incentives will start creeping in.

Best (car) news I've heard in years!

Reactions: 3

1958carnut

· #11 · 15 d ago

BlackGTP said:
Dealers Wrestle With Dreaded Incentives As New Car Stock Piles Up (msn.com)

Perhaps some incentives will start creeping in.

We shall see, but some are still sitting on hoards of used stuff as well it seems.

Reactions: 1

1999 White C5 Coupe

· #12 · 15 d ago

Bigdog said:
They will be back to putting large incentives and imo larger then we have ever seen before, on the hoods soon. These msrp's, coupled with the banks walking out on dealerships and in turn a drastic rise in interest rates will force many of these dealers hand.

The manufacturers have had repeated, massive price increases on new vehicles - and intentionally suppressed the supply of new vehicles (and often were only building the high-trim line models). This kept the new car prices artificially high, and enabled their authorized dealers to price the vehicles above MSRP. The manufacturers pretended to scold their dealers, while playing the game with them.

Even with a few incentives, the massive new-car price increases are here to stay.

Sort of like when gas went up $1 - $2 quickly, then dropped 50-cents. Everyone breathed a sigh of relief, but the large price increase remained.

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mjd1001

· #13 · 15 d ago

When prices level out and incentives come back that will bring some people back into the market for sure. But I wonder, for short term gain, just how much have the automakers/dealers hurt themselves long term?

For me personally, it has always been a new car every 2-3 years. Yes, I would average 25k-30k miles per year on most vehicles. However, since the pandemic and now with the scarcity of vehicles (they say inventory is higher but my local dealership lots are still pretty empty)....for the first time I have gotten used to not thinking about a new car. Can I find SOMETHING I like on the lots? yes, but I don't want to take 'whatever is out there' and I sure don't want to be buying something for thousands of dollars more than I need to (giving the dealership a multi-thousand dollar profit on the purchase PLUS having them make a ton of money off of my service).

Had the prices not shot up so much maybe I would have been looking continually like I used to (I made a habit of driving through the new car lots at least once per week on the way home from work----but I don't do that anymore). But partially the pandemic/scarcity of vehicles...mostly the dealership greed, has broken me out of that habit. Lets see how long it lasts, and I wonder how many other people are 'not in the market' now when under 'normal' conditions they would be already?

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big swede

· #14 · 15 d ago

eaton53 said:
Or there could be a limited number of foolish people available to buy.
At some point sales will go completely into the toilet.
All they are doing with this tactic is kicking the door wide open so the Chinese can just walk on in.

100%. The Chinese are releasing another 20 BEV SUV’s this year.

I think some manufacturers are going to be going out of business in the next few years. People can’t afford the price escalations and will end up stretching payments out more years and keeping their BEV’s way longer than they are keeping their current ICE vehicles.

GB540

· #15 · 14 d ago

Bigdog said:
These msrp's, coupled with the banks walking out on dealerships and in turn a drastic rise in interest rates will force many of these dealers hand.

Study International Harvester circa 1980. Implement dealers were paying 20% interest on inventory nobody was buying.

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buildacariwant

· #16 · 13 d ago

RamJet502 said:
And the problem is prices never really come back down. They might normalize for a while, but we'll continue to see an upward trend. Pretty soon, $100K trucks will be the norm.

Bigdog said:
They will be back to putting large incentives and imo larger then we have ever seen before, on the hoods soon. These msrp's, coupled with the banks walking out on dealerships and in turn a drastic rise in interest rates will force many of these dealers hand.

the dollar is losing value and buying power quickly, cars and houses are going to keep getting more expensive. future new car purchases are going to be some subscription based bs rental situation for the masses and new outright purchases will only be for the wealthy. im sure the automakers have run the numbers and cant wait to get us there. no more private ownership, no more different trim packages, all cars come loaded, just depends on your monthly payment amount what gets turned on by the dealer/car maker.

09W

· #17 · 10 d ago

Started what's likely to be a regualr jaunt: the used car lot hop. Son smacked up a Jeep Liberty- insurance totalled it, so; shopping around. Independent used lots and the chain resellers - everything seems mad high. 7 yr old entry-level SUV with 125K on it should NOT be $15 grand.

Reactions: 5

Envoy4Life

· #18 · 8 d ago

Everything is expensive nowadays, not just cars. Dealerships price gouging is nothing new, which is why I love Tesla. It’s an easy buying experience and you don’t need to worry about typical car buying bull**** like hidden fees/upsells and haggling.

09W

· #19 · 8 d ago

Tesla 'Autopilot' activation fee (for hardware already installed) : $15,000 (SIX TIMES what GM's superior system costs)... but no "upsells". Whew!

Envoy4Life

· #20 · 8 d ago

Wrong, as usual. Autopilot is standard equipment on every single Tesla sold today. Imagine being that smug while being that uninformed.

Full Self Driving and Enhanced Autopilot are the only paid for options available in that regard.

But hey, GM will be more than happy to bend you over with not only multiple required $14,000-$19,000 packages to add Super Cruise onto something like a CT5, but a monthly subscription to get it to even function after 3 years. What a deal!

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