OT: Talking Cars Tuesday - Got any cars?
So, Microchips. Cars use a lot. Thanks to the pandemic, there aren't enough. Car companies have taken a lot of build plans off the table, with Ford publicly stating that they may have no profit in Q2 thanks to the shortage. Most companies have tried to limit the damage, from "soft builds" to moving around standard summer shutdowns.
From the consumer side, this means dealer inventories are really low. A typical "healthy" supply on the lot is measured as a 90 day supply. Most of the most popular models are under 40 days.
Is this messing with you? Are you on a lease and worried that you might not find a new car? Spending more on a used car than you expected? Factory idling?
There's basically a run on cars at the moment, new, used, etc.
When I decided that I needed a car during the pandemic, I figured I could just get a knockaround car (NYC) for cheap and sell it when I went back to the office, but nope. People were selling cars within hours. I would reach out to listings that had literally just been posted and the seller would say they had offers to buy, sight unseen.
It's nuts.
Some people have no problems getting cars.
The greatest from LSU Freek
(too big to embed I guess)
I work in insurance claims, and the last month has been an epic disaster trying to settle the total losses of vehicles - especially in southern parts of the country that got whacked by golf ball sized hail this spring leaving inventory even lower than other parts of the country.
Cars that are on the market are selling so fast they are not even updating our database so our valuations have been way off and people that were not in the car market, forced only because they have to get something, have been especially unhappy. I finally settled a total loss for a gentleman that was buying a car two time zones away and was planning to have it shipped to him - adding more cost to his purchase.
Knock on wood I do not have to enter into the market for that reason because I am hopeful I can get another 3-4 years out of my car.
Mgowife finally convinced me to make the jump to a (shudder) minivan. We were prepared to wait until December since not in immediate need of vehicle and we'll be passing down a car to our daughter when she hits 16 this December. Went to the dealer and they had none of the model (in any trim) we wanted...said we could preorder but didn't even have one to test drive. Found a test drive at different dealer and went back and the ones we could have preordered were gone...we preordered a different one for Mid June. Through costco pricing we were able to get under sticker but by less than if we'd bought a week earlier (the dealer we tested at would not do costco pricing and was not moving below sticker at all). We're convinced prices are going up and wanted to buy now
One note...we did try to look used first but are looking at a relatively new model and there is no used inventory...as indicated by some below, the demand is hitting used hard as well.
I am amazed at the low levels of inventory at the local dealers, never seen it like this. They move stuff around to try and make it look like they have more, but there is an awful lot of empty asphalt.
Then again, some models have been in super short supply for a long time -- I periodically think about trading in my van for a new one and the dealers haven't had much of anything to offer since the pandemic began.
If you are on lease, you can use the purchase option. Might make sense given appreciating used car prices. Dealer will try to talk you out of it.
Good point, Clark Howard was just talking about this on his radio show that lessees are in a unique position where it would make sense for a lot of them to buy the vehicle.
That's what we're doing with the wife's car. Under normal circumstances it's not usually the best financial move to lease-then-buy, but her car is way under miles for the lease, and our buy-out quote is $5-8k less than what comparable models are listed for... so yeah. That's our plan.
Knock on wood I won't be in the market for anything during this short-term bubble. The truck has 9+ years and 130k miles on it but I expect to run it over 250k before replacement and hopefully they've managed to balance out the supply and demand by that time.
I'm in the Houston area and we have a ton of dealers. So my lease was up and I wanted to get back into a truck. My work used to supply us with work vehicles but did away with that and gave us a monthly amount. I was locked in on a GMC AT4 or Chevy Trail Boss and every time I went to buy the truck someone had beaten me out or over paid for it. I did that dance for about 3 weeks last month and finally went to Nissan. I got a 2021 Titan Pro 4x certified with 3k miles on it for $10k less than a new one. It seems like the non US automakers have more supply or people arent buying them. I also got $1000 over what I wanted on my trade in.
If you have a used car its good news now to get more money but buying new is crazy.
Never had a Nissan Titan, but would love own one. Nissan makes good vehicles in my opinion.
Just don't get one with a CVT unless you like to gamble.
Japan 3 were very careful in planning production to ensure inventory through the summer. Industry days supply, as mentioned above, is the barometer. Basic math is: your inventory / (last x days of sales / # sales days in that period minus Sundays). This is essentially your run-out timeframe. So, dealers are not making deals. They are being smart and selling to the highest willing buyer, because the dealers have visibility to what vehicles they will receive in the next 90 days or so. It’s a crazy time
My lease was up on my Challenger in March and ended up leasing a Grand Cherokee. Got it before things hit the fan. 1500 miles on it and got a god damn screw in my tire. Sitting at the tire shop now hoping it can be patched up. If not, gotta love spending another $200.
i've had to puchase four tires for our yukon because of various holes that could not be repaired. very frustrating. one time, the wife hit something on the on ramp and took two tires out at the same time. you could fit a golf ball in the holes from both tires. still unsure what happened. think she hit a drainage structure.
I'm happy I have 21 months left on my lease but holy fuck, I'm blowing through my miles!
I have a lifetime full coverage warranty on my Ram 1500 so I'm driving that until it rusts out and I turn it into a farm truck. Only thing that isn't covered are the "rubber items" and things like brake pads, wipers, spark plugs, etc. As long as I am on the title, transmission drops? $100 for brand new one. Engine dies? $100 for a brand new one. Differential shatters? $100 for a brand new one. It also covers towing costs, provides a loaner for when it's in the shop, gives cash if it ever breaks down on the side of the road to cover "potential hotel stays / food" while it's in the shop.
Both my truck and wife's car are paid off by this winter/next spring. She wants a newer one so we were going to get her one next spring. Now we'll have to see. We never buy new (seems stupid to me when you can get a 1-2 year old model with 15,000 miles on it for 75% of the original price) so we'll have to see how the used car market fairs over the next 10-12 months.
If that warranty is a Maxcare warranty through Ram, they are voiding them and not covering a lot of things that the used to cover. Working in a Ram dealer we are seeing the warranty canceled or claims declined at an alarming rate.
Lifetime Max Care.
How can they deny a signed contract that states they'll perform service that they agreed to perform?
Seems like a lot of lawsuits coming their way.
We have that same plan on the wife's 2014 Durango. Similarly, we'll be running it into the ground. The service writer was trying to tell us some BS about, "well eventually everything is wear and tear". I said, no - it's not. That literally doesn't make any sense. Don't try and play me!
They're realizing it probably wasn't a great idea to warranty something for life. They also don't offer them anymore. We have 105k on it and we've already made our money of out it from repairs we've had done.
We see it often, it's not the dealers doing it. It's the warranty company. Make sure you have your contract in hand when they say it isn't covered. From what I understand, the extended warranty was sold to another company, they are awful to deal with.
I'm currently on a lease that expires in January of '23, so I've got another 20 months. I have leased my last 4 cars in a row and my next one will be my first ever purchase. I'm also planning on buying a luxury sedan, which will be a first for me. I'm interested in a compact luxury sports car. I've looked at pretty much everything in the segment and I'm basically down to the Genesis G70 AWD 3.3T or the BMW 330 xdrive which is the AWD version. I'll probably go with the BMW because there are more of them around. If I was buying new I'd get the Genesis, but finding a used one is really hard.
I bought my car used in May 2019 for $24k. I could sell it now to Carvana two years and 20k miles later for $22.5k. Pretty wild, man. Glad I'm not in the market for a car right now.
We just purchased a new car -ordered online because no local dealer had the trim and model we wanted. Waiting 26 weeks now before it’s available. Not sure if it is chip related, but was surprised by just how long the wait would be.
Bought a Mustang E this weekend. Whew. Nice car. MSRP is a joke right now. We definitely had to pony up (hah hah).
I work next to a Ford dealership. Normally the back lots are filled. They’re empty at the moment and the dealer is cutting hours due to no vehicle inventory.
It is not just buying cars that is the problem, try renting one! Rental car companies sold their fleet during the initial downturn and now cannot refill the stock due to shortages. As such the car rental prices are going through the roof (if you can find one!). It is hard to find rentals for less than $100/day even for a compact car.
Sadly, my Dad passed a few months ago. I just sold his 21 year old Ford Ranger over the weekend. I had plenty of calls for for it. If you want to put in the time somone will pay ya top dollar.
Just saw a guy on twitter complaining that his $90k Model X won't get delivered on time.
I'm glad I have the world's tiniest violin stored in my extra bedroom. Cancel that shit, buy a Subaru, and put the $60k you saved toward your kids' college savings.
I’d been targeting this July to but a new car (EV range at least 200) since early last year, and I’m worried that this is going to make it much more difficult. I’m going to try to push it up a month, but not sure that will matter too much.
Hopefully the great car shortage means my trade-in with 40k miles holds enough extra value to offset some of the increase in new car costs.
I started a lease in January and hoo boy do I feel lucky. I'm locked into a relatively cheap lease for a brand new GMC Acadia (which of course I see ads for on the side of the MGobar as I type) and I have it until 2024. Looks like I got in just in time to get it with the cheap interest rates but before the shortage put a run on new cars.
Just bought a used Honda (2018) a few weeks ago as a third vehicle. Lucky to get it because I felt like the supply was going to tighten quite a bit. Dealer didn't budge one inch on pricing.
Bought a GMC Denali 2500 last summer thinking I would use the towing capability. Got it with a family member's employee pricing. Realized that I wasn't using it so sold it last month for OVER original msrp 10 minutes after the listing went live. Ordered a Jeep truck in mid-April and it was built and at the dealer in less than three weeks. Picking it up this weekend. So made a nice profit on the GMC and will have a new Jeep Gladiator and a pile of cash. Strange times in the car market!
I just bought a 2021 Audi SQ5 right off the lot. Got a good price on trade-in and the Audi.
It seems like the list of things you don't want to buy right now unless you absolutely have to keeps growing. A house is at the top of the list followed by any major home improvement project. Cars and boats are not far behind. It feels like any major purchase is becoming the equivalent of someone trying to sell you a Tulip bulb for 10 times the average annual income in 1600’s Holland.
I've already seen people excited for the secondary market in exercise equipment and outdoor gear over the next year or two. People who bought stuff during the pandemic are soon going to realize they don't actually want to use it and will start to dump it as soon as they're back to normal office and bar life. You have to wonder if boats will be on that list as well (since unlike a squat rack in the basement, storage and insurance on boats costs a lot every year).
As a locomotive Engineer out of indy terminal. All i know is there has been a steady increase of rail cars hauling automobiles / parts.. It's been hectic.. Been steadily increasing since the 1st of the year.. They say its not yet at 100%.. At this rate I don't think we can handle 100% with manpower
Thankfully I bought my used vehicle last year just as Covid shutdowns were starting to hit, so I've not had to deal with that and I left the auto industry behind 6 years ago.
BUT... the wife and I are on the hunt for a house and the housing market is a nightmare same as cars. People paying tens of thousands above listing and appraisal just to get one. While we need one by end of summer we are sticking to our guns and not giving into all this madness.
Used car values seem crazy. I just looked up my current car which I bought off lease this time last year. Its a 2017 Chevy Colorado. Based on similar dealer used car listings I appear to be up $8,000 from what I paid for the lease buy out a year ago.
I got a new 2020 Mazda CX-5 back in November. It was one of the last of the old year models available at the dealer. I thought I got a really good price on it and am very happy so far. My last car was a 2002 Lexus ES300 and it’s insane the technology upgrades in the last two decades.
I have to say, my avalanche has a ton of tech and comfort for an '07 LT. Adjustable peddles, heated wiper fluid, automatic wipers, even a cruddy nav system (no Bluetooth, mind you). But the '11 edge I'll be inheriting from my wife is just so much nicer, even just 4 years newer.
Just sold my Bentley on Craigslist.
I do:
...since these days everything seems to be in short supply or gone (Ric Ocasek included).
Out here in the desert even the smaller used lots are beginning to get very thin on inventory. One lot who I have bought several cars from has virtually ceased selling passenger vehicles and is concentrating on utility trucks.
As far as buying new/leasing, I haven't purchased a brand new car in 25 years, I just as soon let someone else eat the drive off the lot depreciation hit. Leasing, unless you have a private business to write off the lease cost, I'm sorry, it's a suckers bet. Somewhere in the financing department of the major automotive companies they have shrines to the genius who came up with the idea of leasing cars to private individuals. It was a brilliant way of keeping demand off the lot for higher end vehicles, to people who couldn't really afford them. Someone in the thread mentioned Clark Howard, and I cannot believe I have ever heard him say leasing is a good idea.
Nope, we're good on cars right now. We normally would be replacing our BMW X5 diesel by this spring, but we had already decided to put it off because it is running well and because we can't decide on a replacement. We love the 650+ mile range of the diesel, but there aren't many on the market anymore.
It was really funny reading all your comments.
I just realized that my culture toward car is so different...
We needed a "second Car" for house hold... Can't afford it (especially after 2020 being disastrous and 2021 being on the same wave for my business).
But it was also baffling to see very old model going for crazy price (I saw a guy asking well over $5k for 20 years old car!).
So we bought a Cargo bike. I lost a few pounds.
And I am saving on the insurance.
We will see maybe in 2022 we will think of buying another car.
Also - Does it means Alabama will have issue at recruiting?
07 avalanche is a bit long in the tooth. Luckily my cousin is a finance guy at a local dealership and is on the lookout for a family truckster (read: minivan) as a pass through deal for me. No stock where I am. Upside is trade in on the truck is more than I paid...