Luxury sedan segment is in trouble o

[GoCougs]

A great deal of people order their car.

Only because they finance it - take away irrational financing and leasing (which is what should have happened last time, and may happen the next) and very few will order their cars. In fact, the whole of the US auto industry will collapse (my bet is it'd scale back at least 40%). It would adjust over time with less expensive vehicles probably, but would never fully recover.

[12,000 RPM]

People would just keep cars for longer (as they probably should)

Used cars would get insanely expensive further deepening that cycle. US auto market would begin to resemble Cuba's

[Raza]

Im all about dat 2 BOX LIFE

Coke bottle plus two-box. 

[12,000 RPM]

Child's toy + 3 box.

[SJ_GTI]

People would just keep cars for longer (as they probably should)

Used cars would get insanely expensive further deepening that cycle. US auto market would begin to resemble Cuba's

If used cars went up a bunch that would oddly enough make new cars more affordable (via leasing in particular), thereby reducing the demand of the used cars and increasing demand for new cars until a new balance is found.

[TBR]

Only because they finance it - take away irrational financing and leasing (which is what should have happened last time, and may happen the next) and very few will order their cars. In fact, the whole of the US auto industry will collapse (my bet is it'd scale back at least 40%). It would adjust over time with less expensive vehicles probably, but would never fully recover.

Please explain the relationship between irrational financing and propensity to order. If anything, one would think there would be a negative relationship as people who finance cars to the hilt are likely to be more willing to take the loaded model already on the lot (vs picking just the options they want) and less willing to wait 6-8 weeks for their car to be built to order.

[GoCougs]

Please explain the relationship between irrational financing and propensity to order. If anything, one would think there would be a negative relationship as people who finance cars to the hilt are likely to be more willing to take the loaded model already on the lot (vs picking just the options they want) and less willing to wait 6-8 weeks for their car to be built to order.

Ordered cars cost more IRL - incentives/rebates typically only apply on the day of delivery and dealers are less incentivized to sell them (zero carrying costs).

[MX793]

Many incentives and rebates these days only apply if you finance or lease...

[giant_mtb]

Many incentives and rebates these days only apply if you finance or lease...

That's what I was thinking.

A4 was custom ordered. Not financed. Didn't get any sweet deals.

[GoCougs]

Many incentives and rebates these days only apply if you finance or lease...

Actually, it violates franchise law to offer incentives and rebates WRT (in-house) financing - that is why deals are typically shown as "super low 2.9% or $2,500 cash back!"

[12,000 RPM]

If used cars went up a bunch that would oddly enough make new cars more affordable (via leasing in particular), thereby reducing the demand of the used cars and increasing demand for new cars until a new balance is found.

Cougs deems leasing to be irrational though. I don't think anything short of a cash purchase would be legal/moral in Cougsland.

[MrH]

If used cars went up a bunch that would oddly enough make new cars more affordable (via leasing in particular), thereby reducing the demand of the used cars and increasing demand for new cars until a new balance is found.

Damn those markets!  So efficient!

[Tave]

Ordered cars cost more IRL - incentives/rebates typically only apply on the day of delivery and dealers are less incentivized to sell them (zero carrying costs).

Actually, it violates franchise law to offer incentives and rebates WRT (in-house) financing - that is why deals are typically shown as "super low 2.9% or $2,500 cash back!"

Lots of dealerships offer incentives in conjunction with brokering easy finance terms (some in house, some not) but you're kind of proving your own point. Bespoke orders will, on average, command higher purchase prices, require cash deposits, result in long wait times, etc...all of which pushes buyers in general, but especially those dependent on financing, towards whatever current deal is on the lots.

Kevin's premise is simply incorrect: "lots" of US buyers do not build-to-order period. It's a minuscule percentage of the US market. Every 20 years or so there's a big push to revive it that dies a slow and quiet death.

[veeman]

Most mainstreamer and entry level luxury cars don't need to be special ordered.  The dealer can find one at a nearby dealer with the options you want if they don't already have it.  For cars under 50 grand,  I think special ordering from the factory is mostly done for pony cars and Jeeps where buyers are super picky and there's a ton of options available. 

[MX793]

Most mainstreamer and entry level luxury cars don't need to be special ordered.  The dealer can find one at a nearby dealer with the options you want if they don't already have it.  For cars under 50 grand,  I think special ordering from the factory is mostly done for pony cars and Jeeps where buyers are super picky and there's a ton of options available. 

For Japanese cars, where most factory options are bundled and the order sheet doesn't have many check-boxes, that's true.  The Germans offer a lot of customization in terms of options, which makes finding one exactly the way you want on the lot much harder.