Car Market Fookery

[Eye of the Tiger]

Is the market going to normalize anytime soon? Nobody knows, but it is definitely a mess.

https://www.youtube.com/live/kUKDX4V52Tw?

half-assed cliffs notes:

-Auto loan balances are at an all time high
-Loan delinquency rates are increasing
-Increasing negative equity is likely to hurt future car sales
-Our transportation infrastructure absolutely sucks, so "everyone" needs a car
-Some consumers will pay anything for a new car, as long as they can get that 96- month loan
-Dealer associations, franchises, and lobbyists continue to protect themselves from direct manufacturer sales and price limits
-Buy a Mazda
-Your best bet is to get prequalified for your loan through your own bank or credit union
-Computer chip and other shortages seem to be getting better, but prices remain high because they can
-You probably won't get a deal if you special order a manual transmission because the dealer is afraid of getting stuck with it

[CaminoRacer]

Definitely buy a Mazda

[Eye of the Tiger]

Definitely buy a Mazda

But I bought a Toyota

This is my loan, which is apparently better than many new car loans:

[Soup DeVille]

Computer chip allocations go to the most profitable cars. If they need 50 chips for a Grand Wagoneer, and 25 for a base level Dart- they'll choose to make 1 Wagoneer instead of 2 Darts. Other companies are decontenting their cars- a lot of models out there lacking "standard" features like memory seats, or adaptive cruise.

[AutobahnSHO]

Meh same type of video is really popular in many flavors right now.

People have always paid too much for cars. Market will correct when buyers stop the craziness.

I saw a couple Mavericks available 70 miles from here, emailed. They want $10-14k over MSRP for them. I said thanks but no thanks.

[Laconian]

What the hell is going on with Ford dealers? My cousin looked at a Mustang Mach E GT *used*, and the dealer wanted $100k for it. USED!

[CaminoRacer]

I don't believe that they get enough customers who actually fall for that nonsense anymore. Maybe a year or two ago but there can't be that many desperate idiots still, can there? I think there are plenty of people paying $3-5k over but not double MSRP for normal cars. The Z06 corvettes up for auction last week on Cars and Bids and Bring a Trailer both failed to reach the ridiculous reserves set by the sellers

[AutobahnSHO]

Yeah I can't wait until the greedy dealers are left underwater.

[Morris Minor]

My thoughts.

   
• A substantial chunk (not all, but still enough) of demand is switching to EVs or at least PHEVs.
• Therefore an equivalent chunk of the demand for ICE has dropped.
• Which means ICE makers' profits will drop.
• Which makes it tougher for legacy ICE makers to fund their transition to EV production.
• This also means ICE residuals will drop as their desirability drops.
• So financing them will become less desirable, with the risk of borrowers going upside down into negative equity territory.
• So higher risk of defaults and much pain for the lenders.
• My hunch is the automakers will go to the government for help in one form or another: loans, backing off on zero emissions targets etc.

[CaminoRacer]

My thoughts.

   
• A substantial chunk (not all, but still enough) of demand is switching to EVs or at least PHEVs.
• Therefore an equivalent chunk of the demand for ICE has dropped.
• Which means ICE makers' profits will drop.
• Which makes it tougher for legacy ICE makers to fund their transition to EV production.
• This also means ICE residuals will drop as their desirability drops.
• So financing them will become less desirable, with the risk of borrowers going upside down into negative equity territory.
• So higher risk of defaults and much pain for the lenders.
• My hunch is the automakers will go to the government for help in one form or another: loans, backing off on zero emissions targets etc.

I think the market should mostly balance out as we go. Lower ICE prices will create demand for them, at least on the used market.

But I'm sure there will be plenty of shocks, with government policy changes and such. (see: tax credit changes this year and the Jan-March buying rush)

[Morris Minor]

I think the market should mostly balance out as we go. Lower ICE prices will create demand for them, at least on the used market.

But I'm sure there will be plenty of shocks, with government policy changes and such. (see: tax credit changes this year and the Jan-March buying rush)

Good points.
I have in mind the emissions & fuel consumption diktats that were handed down in the early 1970s. The short deadline forced the Big Three to hurriedly cobble together what they could & rush lots of underdeveloped low quailty products to market. This opened the door to the Japanese.

History is repeating itself.

[Eye of the Tiger]

Good points.
I have in mind the emissions & fuel consumption diktats that were handed down in the early 1970s. The short deadline forced the Big Three to hurriedly cobble together what they could & rush lots of underdeveloped low quailty products to market. This opened the door to the Japanese.

History is repeating itself.

It is. Even the new Toyota trucks with turbo V6s, rather than the gas sucking V8s, are having significant problems. At least they are sticking with their tried and true hybrids for now, rather than jumping straight to EVs.

[GoCougs]

It is. Even the new Toyota trucks with turbo V6s, rather than the gas sucking V8s, are having significant problems. At least they are sticking with their tried and true hybrids for now, rather than jumping straight to EVs.

Hasn't gone well for Toyota. Turbocharging didn't go well for Honda either. Jesus.

[CALL_911]

I'm shopping for a car for my father- haven't done this in a bit. Back then I'd have laughed at paying sticker. Now I'm "negotiating" by saying we'll pay sticker??? He's buying a fucking E-class, not a Ferrari and they want a $5k ADM which I laughed at.

[CALL_911]

But I bought a Toyota

This is my loan, which is apparently better than many new car loans:

How in god's name is that better than any car loan? 14.44%????????

[Eye of the Tiger]

How in god's name is that better than any car loan? 14.44%????????

Look at the interest rates right now. This is as good as it gets for me.


This is from December, and rates have only increased since then:




My score is still stuck in 600s, so 14-15% is as good as it gets on a 15 year old truck.

[AutobahnSHO]

Yeah, interest rates are WACK. House rates are triple now what they were in 2020!

[Eye of the Tiger]

Yeah, interest rates are WACK. House rates are triple now what they were in 2020!

I bought my house at the lowest of the interest rates, and my truck at the highest. It all evens out, right?

[Eye of the Tiger]

The local Acura dealer is advertising the fact that they have FOUR vehicles in stock. Wow.

[CaminoRacer]

https://www.prnewswire.com/news-releases/after-nearly-two-years-new-vehicle-transaction-prices-fall-below-sticker-price-in-march-2023-according-to-new-data-from-kelley-blue-book-301794627.html#:~:text=ATLANTA%2C%20April%2011%2C%202023%20%2F,Book%2C%20a%20Cox%20Automotive%20company.

After Nearly Two Years, New-Vehicle Transaction Prices Fall Below Sticker Price in March 2023, According to New Data from Kelley Blue Book

[MrH]

The tide is turning quick. The local Jeep dealer has something like 170 new vehicles, everything has at least $5k off MSRP it looks like.

[r0tor]

I just got a letter in the mail from my Mazda dealer offering to buy my RX-8 back ... So exciting and a limited time offer....

...it was for $2,263....

[Eye of the Tiger]

I just got a letter in the mail from my Mazda dealer offering to buy my RX-8 back ... So exciting and a limited time offer....

...it was for $2,263....

Take it

[CaminoRacer]

I just got a letter in the mail from my Mazda dealer offering to buy my RX-8 back ... So exciting and a limited time offer....

...it was for $2,263....

Funny, they called me yesterday to buy my Miata. I didn't answer or call back.

[Soup DeVille]

I just got a letter in the mail from my Mazda dealer offering to buy my RX-8 back ... So exciting and a limited time offer....

...it was for $2,263....

I'll give you $2300 even.

[r0tor]

I'll give you $2300 even.

Come on.... I'm about to put $800 of new brakes on it   

[Soup DeVille]

Come on.... I'm about to put $800 of new brakes on it   

Okay, throw in the brakes, and we'll make it 3100.

[Eye of the Tiger]

I'll do the brakes, myself. Trade for Jeep with "good" brakes.

[r0tor]

I'll do the brakes, myself. Trade for Jeep with "good" brakes.

No... One jeep is enough jeeps to jeep around in

[Eye of the Tiger]

No... One jeep is enough jeeps to jeep around in

But this isn't for Jeeping because it's 2WD. It is obviously a street racer like an RX-8.