[HN Gopher] SUVs parked on cargo ships reveal scope of U.S. auto...
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SUVs parked on cargo ships reveal scope of U.S. auto market glut
Author : pseudolus
Score : 84 points
Date : 2020-05-01 16:01 UTC (6 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| ericcholis wrote:
| Many of the major brands are offering insane deals. Kia, for
| example is offering 120 days until first payment plus 0%
| financing for 72 months.
|
| Meanwhile Subaru, per usual, is offering on the low-end compared
| to what others are doing. 0% for 63 months. They never budge on
| financing or offers.
| londons_explore wrote:
| I hate 0 percent loans.
|
| I wish a service existed that I would pay a lump sum of upfront
| cash to, and they'd sort out all the loan paperwork, etc.
|
| Obviously if it's a 60 month 0% loan, I want to pay the sticker
| price minus the return on a 2.5 year fed bond...
| Spivak wrote:
| Isn't that what dealerships call "bonus cash"? Like you have
| to run the numbers yourself but you can use that as a point
| of negotiation if you're buying outright.
|
| Also 0% loans are _fantastic_ for your credit! I take them as
| much as possible because it's a free credit score bump.
| addicted wrote:
| Why couldn't you just put the sticker price you're wanting to
| pay upfront into the 2.5 year bond instead?
| alasdair_ wrote:
| The rate of return on federal bonds right now is around 0.65%
| so you'd basically be paying the sticker price.
| loeg wrote:
| Kia/Hyundai were doing similar promotions last summer, no COVID
| in sight. It's just something they do to drive sales numbers.
| WJW wrote:
| How is that an insane deal? Like someone in a sister thread
| mentioned, the interest rates are so low that paying later has
| very little benefit since you can barely invest the money
| anywhere else. All this does is make you pay the same amount a
| little bit later.
| roland35 wrote:
| 0% is very nice, but oftentimes there is a cash rebate
| alternative. On my last purchase (last model year Volt before
| they were discontinued) I could take 0% or $8,000k off. I took
| the 8k!
| SOLAR_FIELDS wrote:
| Oftentimes you can take the rebate and then turn around and
| refinance the vehicle for a lower rate after a year or so as
| well.
| Pxtl wrote:
| Bet there's still a month's wait for a BEV or PHEV.
| whalesalad wrote:
| Living here in LA/OC, virtually every big mall parking lot in
| town is packed to the gills with new auto inventory parked head
| to tail. The SNA airport parking lot is also being used for the
| same thing.
|
| Turnover on vehicles is bananas.
| gnicholas wrote:
| How will this play out when auto dealerships seek to unload their
| inventory? Will it be via lower prices, manufacturer incentives,
| zero percent financing for longer periods than normal?
|
| I'm sure dealers will want manufacturers to share the burden with
| rebates. Financing incentives seem risky given the chance that
| jobs are not especially stable these days.
|
| Does anyone remember what happened during the 08 recession? I
| imagine this is a more abrupt dropoff, and presumably will be a
| more abrupt sales pickup as well. How would that lead to a
| different result here?
| bluGill wrote:
| Dealers have to check how their manufacturer agreement is. Some
| will sell at below cost because their allocation of cars and
| bonus for selling a lot of cars depends on numbers not profit
| per car (they make up loss per car on other things). I expect
| manufacturers will modify those rules so who knows. Other
| dealers may not take new inventory until current sells and be
| less concerned about a few months of low sales.
| brogrammernot wrote:
| It's already happening. Auction houses are down significantly,
| and you're seeing like 70-80% of MMR value at auctions for
| vehicles (https://publish.manheim.com/en/services/valuation).
|
| It depends in which manner they need to liquidate, if they can
| hold the inventory it often makes sense to do so instead of
| losing the 20-30% of market value liquidating it (you just do
| the calc of depreciation per day versus selling right now).
|
| You can't really liquidate new cars, because there's
| regulations around selling new cars that prevents folks like
| Vroom, Carvana, Shift from taking on that inventory but those
| are the only folks who could really afford to do so with their
| respective funding from external sources.
|
| Financing incentives are risky, but you account for that with
| increased income verification and other items - the deferral of
| payments for 90-180 days is getting more and more common.
|
| This situation seems different from the 08 recession, as lots
| of folks _should_ get their job back once things are opened &
| we get back to a new normal so if you treat the risk as such
| you're hoping that 90-180 days is enough of a time period to
| have people be able to afford the loan they've gotten.
|
| The real looming issue is you have ~4M or so vehicles coming
| off-lease later this year, so you will have an incredible
| influx of used vehicles to an already saturated market leading
| to great deals for consumers but not ideal times for most
| folks.
|
| The harder part of selling online for dealers is that their
| money maker is in the hard-selling of ancillaries (Warranties,
| the "paint protector" and so forth) plus the F&I office
| (financing and insurance) but if you can't hard sell customers
| anymore then the majority of your profit center is gone so it's
| having a material impact on the dealers.
|
| Happy to expand more or answer further questions as I work in
| the auto space.
| Thriptic wrote:
| Assuming that we remain bogged down by COVID for the rest of
| the year / get a second spike of infections due to premature
| reopening, can we expect manufacturers to release new models
| and put dealers under additional new pressure to liquidate
| existing stock, or will they likely hold off and release 2021
| models in 2022?
| nerfhammer wrote:
| what's the best way to buy a car right now?
| brogrammernot wrote:
| New or used?
|
| If new - the best bet is to call your local dealers and
| talk to them. I'm aware of many dealers that haven't turned
| a unit in 3 weeks now, they need the business and likely
| will be willing to give you a great deal because they need
| a move inventory.
|
| If used - I would wait until some of the auction houses re-
| open and try bidding on a car. If that's a little stressful
| (it can be) then I'd look at Carvana, Vroom and Shift
| (depending on your geographic region).
|
| From there I'd look at local used car dealers - don't let
| them game you or try - Carvana/Vroom/Shift all recondition
| to a Lexus CPO (Certified Pre Owned) standard you just
| can't legally say that if you don't have the approval from
| the manufacturer (another weird quirk) - you should be able
| to find a like for like vehicle between Carvana/Vroom/Shift
| & a local dealer.
|
| Whoever gives you the best deal take it, but both online
| and in-person dealers are marking down inventory.
|
| If you can wait a few months, the prices will be lower with
| all those vehicles come off-lease.
|
| Keep in mind that with Hertz filing for bankruptcy that
| other rental car companies aren't that far behind, so there
| could also be a massive influx from those folks needing to
| liquidate some assets.
| foobarian wrote:
| I used to obsess about buying a car and thought dealers
| were the devil to be avoided. But once I got older and
| started working, I got over that; and my latest car
| purchase went something like this: 1. pick a car I wanted
| 2. look around online for what the dealer's price is
| (understood it's not accurate) 3. go into the dealer and
| tell them I want car X for $Y-300. 4. Let the dealer try
| to sell me the car on the lot that was the wrong trim and
| color, stick to the original car, accept $Y+200 for the
| price, then sign the paperwork and wait for the delivery.
| 5. Few months later, come in, sign more paperwork, drive
| away in new car.
|
| The whole process was pretty pleasant, people were
| pleasant, the car was great, and now I still come over to
| get it serviced.
|
| In retrospect they were a little too eager to accept my
| offer which was way below sticker, so I was probably off
| on their factory price, but I figure I'm fortunate that I
| can afford to not obsess about a +/- $1k and do better
| things with my life :)
| nerfhammer wrote:
| What if I don't know a lot about cars and don't know
| exactly what I want?
| tmountain wrote:
| Do your research online ahead of time to narrow down what
| criteria you care about and then go look for the best
| deal.
| the-dude wrote:
| Cash for clunkers happened during the 08 recession.
| gnicholas wrote:
| Oh, right. That was widely seen as ineffective at
| accomplishing its stated goals, right?
|
| I wonder if the government would try something like that
| again, perhaps limited to domestic manufacturers or cars
| manufactured domestically. I can't see the current
| administration giving incentives across the board.
| itsajoke wrote:
| Time flies like an arrow. People in a recession will eat a
| banana.
| SilasX wrote:
| And let me guess: it's somehow not going to translate into lower
| new car prices because automakers are entitled to previous levels
| and will get government aid to prop up demand (cf "cash for
| clunkers")?
| shiftpgdn wrote:
| A lot of people bemoan cash for clunkers but it does a lot of
| the general level of safety and pollution on the road. A
| voluntary culling of select cars/trucks is generally good for
| the world.
| tricky wrote:
| I feel like cash for clunkers destroyed a lot of value,
| prices went up, and consumers got little out of it.
| icelancer wrote:
| Most economists agree with you.
|
| https://en.wikipedia.org/wiki/Car_Allowance_Rebate_System#E
| c...
| cpursley wrote:
| Cash for clunkers mostly hurt the working class as it
| resulted in higher used car prices (and higher financing
| costs due to compound interest effect on higher prices +
| higher interest rates for used cars).
|
| Unfortunately, in the USA, you can't get to work (or even
| purchase groceries) without a vehicle with the exception of a
| few places.
| SilasX wrote:
| True, but then, lots of programs look good if you only look
| at benefits and ignore costs.
| bluedino wrote:
| Not really related to the article, but this is from Cadillac's
| website:
|
| _To address concerns related to dealership sales department
| closures and social distancing, Cadillac is offering virtual
| tours of its products via Cadillac Live and promoting its "Shop.
| Click. Drive." online shopping, purchase and delivery program._
|
| Wasn't this the very thing the automakers were against when Tesla
| came up with it?
| cosmie wrote:
| Cadillac (and other auto manufacturers) structure their program
| to include dealerships, rather than to cut them out. The sale
| gets booked against and delivered by a local dealership, rather
| than Cadillac the manufacturer.
|
| Tesla does not have an independent franchise/dealership model,
| and all of their local presence is corporate owned. This is
| what all the automakers have been against, as there are a rats
| nest of local/state laws that require legacy automakers to not
| compete with/cut out their dealerships with direct-to-consumer
| sales, but Tesla has avoided that impediment by resisting
| having to adopt the sales framework the legacy manufacturers
| can't legally get out of.
|
| That said, manufacturers would love to be able to adopt Tesla's
| model; dealers are the ones that hate it as it's an existential
| threat. Manufacturers are only against Tesla's model to the
| extent that they're not legally allowed to adopt it, so
| consider it an unfair advantage.
| bluGill wrote:
| I'm not sure if the manufacturers are against it. It is
| complex. Dealers are the human face of the company. Someone
| to talk to in your town if things go wrong. Assurance that
| there is a mechanic that can fix it if something breaks (not
| just the engine, there are many other parts that can breaks.
| Assurance someone will be able to get the parts you need.
|
| That doesn't means they have to like the dealer model, but
| there are real advantages to it.
| perl4ever wrote:
| I realized recently something that set me firmly against
| ever going back to the dealer - while I could afford their
| repair rates when necessary, they aren't able to figure out
| obvious problems, or don't want to bother, _and_ the
| service advisors are _on commission_.
|
| For years, I was aware of the cracks about "stealerships"
| and I didn't pay much attention, because I figured you get
| what you pay for and hadn't found a good independent
| mechanic. But I happened to see a help wanted ad for dealer
| advisors that mentioned commissions, about the same time as
| I had paid for an expensive repair on an out-of-warranty
| vehicle after dragging my feet quite a bit.
|
| Maybe this is naive, but I genuinely did not know about the
| conflict of interest, and I expected the half of the dealer
| that sold (used) luxury vehicles to be no more predatory
| than the half that sells regular cars. On purchase, I
| figured, meh, I can afford the repairs, but I didn't count
| on paying for ones I didn't need and having ones I did
| ignored.
| whatevertrevor wrote:
| Wait I'm a noob, so your dealer is also your mechanic
| shop? And the mechanics make a living by earning a
| commission out of your repair invoices?
| Tuna-Fish wrote:
| All those advantages could be provided by the car company
| owning all the dealerships that sell their cars, except it
| would be cheaper for both the car company and customer.
| s1artibartfast wrote:
| Why do you assume it would be any cheaper for the
| customer? I think it could actually increase prices by
| reducing the number of sellers in the market. You would
| have a single retailer for each brand.
| maxerickson wrote:
| Here we have a single retailer for all the brands. One
| group owns most of the dealerships.
|
| (which is some sort of regulatory problem probably, the
| point is that it is the status quo for there to be a
| dealership oligopoly in many areas)
| bluGill wrote:
| I'm not sure it would be cheaper. The car company needs
| to pay all the people in the dealership plus back office
| staff to manage all those dealers. It might or might not
| be cheaper. It is for sure a distraction from their real
| job (design and assembly of cars and engines)
| lsaferite wrote:
| You could easily move to a no-haggle model at that point.
| You also cut out a middleman business that wants profit
| on top of your profit. Yes, you have to pay those end
| sales people, but you don't pay the profit of that
| dealership owner.
| wobbly_bush wrote:
| Coming from a country which haggles all the time (India),
| and seeing the in general no-haggle culture of US, I was
| always surprised car purchase is one of the areas where
| haggling is culturally acceptable.
| frosted-flakes wrote:
| Haggling is acceptable in Canada/USA with most large
| purchases. Cars, houses, hand-made furniture, bulk
| purchases, building leases, etc. Haggling is generally
| not accepted only when it doesn't scale well, which also
| has the advantage of greater transparency and fairness in
| those cases.
|
| In line with the above, private sellers are generally
| amenable to haggling because it doesn't matter that it
| doesn't scale. So when buying a used anything on Kijiji,
| haggling is _expected_ , particularly if it says "OBO"
| (or best offer), but not if it says "firm".
|
| If the price is set semi-arbitrarily at the time of
| purchase, like some U-pick auto junkyards, the person
| setting the price is right there anyway, so haggling may
| be acceptable.
|
| I haven't researched any of this; this is just my
| intuition from experience.
| renewiltord wrote:
| The difference is that the dollar value of time in
| America is higher. So while an Indian may haggle over a
| bag of lemons because the rupee value of the lemons vs.
| time is what it is, the American won't.
|
| You'll often see this when selling used stuff. Poor
| people will haggle to the end of time because every
| dollar matters to them - something that manifests in
| selling something at a higher price being more risk-free
| than selling something at a lower price.
| csharptwdec19 wrote:
| There's also the protection added to the MFG by layering.
|
| Consider every dealership horror story you've ever heard.
| Both from customers -and- floor employees.
|
| In both cases, having all dealerships across the country
| owned by the MFG means there's larger pools of workers to
| unionize, and a greater risk for a class action.
| renewiltord wrote:
| Sympathetic to the focus argument, but the cheapness
| thing? Are dealers negative overhead in some way right
| now?
| sjg007 wrote:
| The whole distributor model is antiquated. For cars, for
| alcoholic beverages etc...
| nradov wrote:
| I doubt that most mass-market auto manufacturers want to move
| away from the franchise dealer model. It's tremendously
| capital intensive. Tesla can make it work since their cost of
| capital is so low. Where would Ford or GM get the billions in
| funding to run thousands of dealerships across the country?
| khaledtaha wrote:
| Having worked at an OEM and in automotive I can tell that
| what you're saying is simply not true.
|
| Where would they get the money? From cutting out the
| middleman, from increasing sales by offering an alternative
| to the terrible dealership experience (spending 1-2 hours
| buying a car is not ok) and from gaining the flexibility to
| offer alternative business models (i.e. subscription
| models).
|
| Dealerships are the past. They may very well be the
| deadweight that will cause incumbent OEMs to sink rather
| than swim.
| legolas2412 wrote:
| Because capital is extremely cheap in low interest
| environment?
|
| They would want to cut out the middlemen car dealerships.
| Etheryte wrote:
| For most, business is not about being consistent or logical,
| it's about being profitable.
| wnevets wrote:
| No, that was the dealerships
| notfromhere wrote:
| Automakers aren't against them selling direct, dealers are. And
| it's illegal for automakers to do so because automakers tried
| to kill dealers earlier on and take over the sales channels
| dealers built out. Plus for communities, it's more beneficial
| than they're locally owned versus all of the money flowing out.
| guntars wrote:
| It would be more beneficial for communities to not pay the
| "dealer tax". Why do we need to support a group of people
| whose job can largely be done by an app these days?
| toomuchtodo wrote:
| Having bought several Tesla vehicles from Tesla, all
| requiring back and forths with local service due to
| manufacturing issues, their process leaves much to be
| desired (both purchase and servicing). "Largely done by an
| app" is not an accurate representation of the problem
| space.
| drdeadringer wrote:
| What is "the problem space" here then?
| cma wrote:
| > Plus for communities, it's more beneficial than they're
| locally owned versus all of the money flowing out.
|
| It means a new concentrated powerful special interest in
| their local area can outbid them, in their diffuse
| helplessness, in influencing politics.
| notfromhere wrote:
| Do you prefer a concentrated powerful special interest
| that's in a HQ far away instead?
| cma wrote:
| I just mean for their local politics. It is basically
| creating an artificial "big man" in the community.
| ComputerGuru wrote:
| Only net profit to the owner flows out of the community. The
| money going to employees at the branch/showroom (which would
| still be retained, as they serve a purpose regardless of who
| runs them) is still retained in the community. Given how many
| auto dealerships are franchises owned by out-of-town
| individuals or groups, it's already the case anyway.
| hedora wrote:
| I don't buy the idea that dealerships benefit communities. If
| they simply charged sales tax based on the address of the
| purchaser, it would be more equitable.
|
| The current law creates local dealership monopolies, and the
| dealerships provide terrible service, and rip everyone off as
| a result. If you don't like it, you have to drive dozens of
| miles to go to a competitor (and car purchases invariably
| involve multiple trips).
|
| Cities want the sales tax revenue, so they give the
| dealerships huge tax breaks to attract them.
|
| The whole system should be scrapped.
| reaperducer wrote:
| _I don't buy the idea that dealerships benefit
| communities._
|
| It's a method of spreading the wealth. The model increases
| the number of people employed and businesses involved, both
| directly and indirectly, exponentially.
| WillPostForFood wrote:
| It is inherently unequal though. Not every community gets
| a dealership, especially poor neighborhoods. But they do
| have car purchases. If sales were online, and sales tax
| distributed by purchaser addresses, the tax revenue would
| be much more broadly spread out.
| _jal wrote:
| Entertainingly, dealership owners are notoriously
| Republican-leaning. Perhaps they just need a bit of help
| staying true to their free-market ideals some times.
| gruez wrote:
| You're not wrong, but there are far better ways to
| redistribute wealth than mandating the use of rent-
| seeking middlemen. Why not levy a tax directly and cut
| out the middle man?
| dhosek wrote:
| In Illinois and California, at least, the sales tax rate
| for cars is based on the purchaser's residence. I think
| though, that the bulk of the tax revenue goes to the
| location of the dealer (but I could be wrong). Purchasing
| out of state is generally discouraged by having the
| purchaser pay at least the difference in tax rates if the
| purchase was less than a specific time since the arrival of
| the car in state.
| voodooranger wrote:
| i don't know what the automakers' stance was or is but i
| believe the organizations that have fought direct sales have
| been the national and state dealership associations.
| SQueeeeeL wrote:
| No, you could always look at cars online, what auto makers
| didn't like about Tesla was their lack of dealerships. The auto
| sellers regulatory captured a bunch of states decades ago; and
| now you can't buy cars directly from the manufacturer.
|
| If another electric vehicle player tried to get in the game
| today, I'm sure Tesla join the lobby against them using the
| same argument.
| reaperducer wrote:
| _The auto sellers regulatory captured a bunch of states
| decades ago_
|
| No. It wasn't regulatory capture. It was about competition.
|
| The same thing happened in the United States with movie
| theaters, television production, alcohol distribution, etc...
|
| There's a reason that bars aren't owned by breweries anymore.
| There's a reason that movie theaters aren't owned by the
| production companies anymore.
|
| "Reglatory capture" is a fun HN buzzword, but if you study
| history, you know why things are done.
| SQueeeeeL wrote:
| Regulatory capture is special interest groups in charge of
| regulating themselves. Of course private movie theaters are
| the ones who sponsored the bills saying production housing
| can't own movie theaters, it'd be bad for their business to
| have to compete and not have access to all movies.
| Regulatory capture can be sensible and still massively
| benefit special interests.
| tzs wrote:
| > Of course private movie theaters are the ones who
| sponsored the bills saying production housing can't own
| movie theaters, it'd be bad for their business to have to
| compete and not have access to all movies.
|
| It was an antitrust lawsuit by the government in 1938
| that brought this about, not legislation.
| piinbinary wrote:
| "Parked in the sea" is a rather dramatic way of saying that
| incoming container ships couldn't unload.
| dpeck wrote:
| "at sea" is reasonable and attention grabbing, "in the sea" is
| just click-bait junk.
| dang wrote:
| Ok, we've taken them out of the sea in the title above.
|
| Nice "at".
| Shivetya wrote:
| well that and it certainly is not just SUVs but that does make
| for a more click bait title.
|
| It would be interesting to see how many products are affected
| that sit on container ships. I have not seen any slowness in
| delivery of mailed items, specifically ebay auctions that were
| shipped from China
| monkmartinez wrote:
| Not really... Oil is "parked at sea" right now and you see the
| effect. Too much supply is too much. I live in a medium sized
| city and parking garages are full of rental cars as they have
| no where to put them. All of our dealers have lots full to the
| brim. Sales fell off a cliff.
| bertjk wrote:
| "parked at sea" has that meaning. There would be no
| complaints here if the headline was "SUVs Get Parked At
| Sea,..."
| charles_f wrote:
| Yeah, slightly click-baity
| XzAeRosho wrote:
| For some reason the headline got me thinking that they were
| throwing cars into the sea.
| loco5niner wrote:
| That was intentional.
| dx87 wrote:
| Same. The headline made it sound like dealerships had a bunch
| of cars already ordered, and were caught dumping them in the
| ocean because they weren't selling enough inventory to make
| room for the newer cars.
| lotsofpulp wrote:
| That is the intended purpose of the headline in order to
| get you to click on it.
| Scoundreller wrote:
| Use this link instead:
|
| http://archive.is/e4D3G
| dhosek wrote:
| When the overhead shot of the cars was loading, the initial
| blurring made it look like they were lined up in 20' of water.
| [deleted]
| RcouF1uZ4gsC wrote:
| Once the car dealerships reopen, I think there will be the mother
| of all sales. If you were thinking about getting a new car, this
| might be the best time to do it.
| tibbydudeza wrote:
| Existing customers won't be happy with lowered resale values
| ... suspect there will cheap financing deals and added in
| extras.
| bluedino wrote:
| At least here, they are still 'open'. You just have to do your
| test drive and such by appointment, and they bring the cars to
| you.
| ohazi wrote:
| This is the real reason for Elon Musk's latest round of idiotic
| tweets, in case anyone was still confused.
|
| Tesla is an expensive company to run, their finances are often at
| least a little bit precarious, and he has on the order of tens of
| billions of dollars riding on there not being a recession right
| now.
|
| There's no hidden gem of contrarian insight, he's just being
| selfish.
| kumarvvr wrote:
| Sorry, you forgot hypocritical.
| rland wrote:
| You're almost certainly right. Although: I don't see the tweets
| as a sort of sociopathic "if I use my bullhorn to influence
| public behavior there is a .24% chance that this will increase
| my net worth therefore it's the optimal choice" way.
|
| More like, he really is under a tremendous amount of financial
| stress, and twitter sometimes tempts him by being a place that
| will listen, no matter what, good and bad.
|
| That's one of the few things I actually like about twitter.
| That by the sheer temptation of it, it worms its way past the
| PR teams and the polished sheen and gives the raw thoughts of
| people in positions of power.
| whyenot wrote:
| He seems to be having a meltdown on Twitter today. It's more
| than just financial. I think there is something really wrong
| with him.
| commandlinefan wrote:
| Something tells me we haven't seen the worst of the economic
| slump yet. By far.
| seph-reed wrote:
| And we haven't seen the best yet either!
| mh8h wrote:
| With the level of just-in-time inventory systems used in the auto
| industries, I'm surprised the manufacturers could actually build
| this many cars. I'd imagine the whole line would be down if they
| are waiting for the bluetooth module that usually comes from
| China.
| mips_avatar wrote:
| The market still hasn't budged in used car pricing though. JD
| power's report from last week only showed a 2% decline in prices.
| Wonder if/when prices will actually be affected by this.
| Balgair wrote:
| Where is that source? I'm in the market for a used car and
| would _love_ a good source for data!
| flyGuyOnTheSly wrote:
| If you're looking for a decent used car, watch some Scotty
| Kilmer videos on youtube. He reviews used car makes and
| models all the time.
|
| Claims he has never purchased a new car in his entire life of
| being a mechanic of 50+ years.
| mips_avatar wrote:
| Found it! Here's where I read it:
| https://www.freep.com/story/money/cars/2020/04/23/buying-
| car...
| papermachete wrote:
| You can also try ChrisFix for when fit hits the shan or
| general maintenance. It's really simple...
| tssva wrote:
| Used car supplies are lower now only because like everything
| else auto auctions have for the moment mostly come to a halt.
| The supply of used cars awaiting auction is swelling from
| rental companies wanting to dump inventory and cars coming off
| lease. Once the auto auctions return to normal expect a
| significant drop in the price of used cars.
| ip26 wrote:
| Supposedly the _value_ has plummeted but the _asking price_ has
| not - the result, no sales. The seller(s) aren 't willing to
| take the loss to move inventory & are trying to wait out what
| they hope is a temporary dip.
|
| Kind of like the recent oil prices, once people finally ran out
| of places to store the good the price will _have_ to fall.
| Zimahl wrote:
| Why would used cars drop in price? Since no one is buying new
| cars there's no supply of used cars. Lower supply means
| increased prices but demand is probably down as well so almost
| no change.
| hourislate wrote:
| Leases come due. Cars hit the used market. You also have
| rental companies dumping cars onto the market since business
| has collapsed. Hertz might be going into bankruptcy. Repo's
| are another thing to consider along with private sales when
| people can't afford them or need to raise money.
| Guest42 wrote:
| I think that lending will be tightening up as well.
| vkou wrote:
| If you're buying a used car from a private party, you're
| not doing it on financing.
|
| If you're buying a used car from a dealer, with financing,
| you must be truly desperate. A lot of people are desperate,
| though...
| loeg wrote:
| When I bought my current used car, in cash, the dealer
| offered it on financing for 0% or 0.9% or something very
| low -- no impact on the selling price. It wouldn't have
| been a terrible decision to take the super low interest
| loan and put the purchase money into my investment
| portfolio instead (just another form of leverage). I paid
| cash anyway, because I went in intending to, but
| characterizing all financing as extremely desperate is
| misguided.
| ASinclair wrote:
| There is a big supply of used cars coming. Rental agencies
| are offloading cars because they have storage issues with
| nobody renting their vehicles. However, lots of the car
| auctions are closed so that could prevent the prices from
| coming down.
| soperj wrote:
| Because no one is buying used cars either, and people who
| can't afford the car they have are selling them.
| Supply/Demand when there is no demand.
| kart23 wrote:
| Doubt used will be impacted at all, if much. People are always
| looking for good deals on used cars, and most sellers dont
| immediately need to get rid of them, they can wait for a year
| or half a year and wont really depreciate that much.
| lozaning wrote:
| Used is supposed to get slaughtered:
| https://www.zerohedge.com/news/2017-03-31/heres-why-used-
| car...
|
| If you're a person with an old truck you'd like to get rid
| of, yea maybe you can wait 2 years to sell it. If you're a
| BMW dealership that got 120 cars back from lease this month,
| and you're going to get 120 more next month, and next month,
| and next month...
| CryoLogic wrote:
| I bought recently from a dealership that was going out of
| business right by an upscale university and negotiated about
| $3500 off of MSRP on a new car.
|
| They told me they had to lay off around half their staff due to
| Covid.
|
| The deals are out there you just have to look for them.
| driverdan wrote:
| Without more context that may not be a good price. Ignore
| MSRP. Never pay over invoice.
| gambiting wrote:
| The good rule to live by is you should always be able to
| negotiate at least 10% off a new car. If one dealer isn't
| willing to negotiate, go to a different one. Helped loads
| of people negotiate prices for their new car and 10% is
| always achievable. The only brand where you can't is KIA -
| they just flat out don't negotiate, KIA UK sets prices and
| that's what you pay. The dealership might throw servicing
| or some accessories to sweeten the deal but there's nothing
| they can do about the price.
| izacus wrote:
| Yeah, I've seen BMW/Mercedes dealers drop prices for a much
| as 20% which can easily be 10-20k off the listed price.
| loeg wrote:
| "MSRP" is a meaningless benchmark that is far in excess of
| the average retail price, even without any real negotiation.
| code_duck wrote:
| It constitutes a reasonable number from which to compare
| prices. For instance, 20% off MSRP, 40% off MSRP.
| mschuster91 wrote:
| > The market still hasn't budged in used car pricing though.
|
| Last thing people want to do now is buying (or worse,
| financing) a new multi-ten-thousand dollar car. Unless your car
| is falling apart or you _desperately_ need money you should
| absolutely keep your car, which is why there are not enough
| sellers to force a price downturn for used cars.
|
| For new cars the situation is similar but different - a new car
| doesn't lose much value until it has been sold. When a car
| company / dealership can afford to ride out for half a year
| until the consumer side stabilizes, why should they discount or
| even take a loss?
| jedberg wrote:
| There was recently a guy who did a helicopter tour on YouTube [0]
| where he flies over Dodger Stadium and points out that although
| there are no baseball games, the parking lot is completely full
| with new cars.
|
| It's crazy to see. They are putting them anywhere.
|
| [0] https://www.youtube.com/watch?v=AzD5u_fLo70&t=1407
| jacob019 wrote:
| So where can I get a crazy good deal on a new car. I wasn't in
| the market, but if the price is right...
| pjettter wrote:
| cash on sundays worked well for me in the past...
| dhosek wrote:
| Not in Illinois where car dealerships are legally prohibited
| from opening on Sundays.
| bowmessage wrote:
| Really? I thought most car dealerships operated on monthly
| quotas/goals?
| pkulak wrote:
| Not to be flippant, but the example used is Nissan, which has
| been circling the drain in the NA market for a couple years now.
| This wouldn't have surprised me if it happened 4 months ago.
|
| Now, are ships full of Toyotas and VWs also unable to unload?
| jeffbee wrote:
| Nissan USA sales down by 1/3rd _before_ pandemic [1], car sales
| down 37% in Q1 2020, partially within pandemic [2]. Just
| brutal.
|
| 1: https://usa.nissannews.com/en-
| US/releases/release-103b1d052f...
|
| 2: https://usa.nissannews.com/en-
| US/releases/release-11f3e4512e...
| elsonrodriguez wrote:
| This is a direct result of Nissan selling boring cars with
| transmissions made of glass and jagged rocks for years
| without any sign of changing course.
|
| Their niche was performance(even their budget cars had very
| good power compared to competitors), they should have left
| the boring appliances to Toyota and Honda.
| gambiting wrote:
| Yep, the only Nissan vehicle I'd recommend at the moment is
| the Mercedes X-class.
|
| (For those who don't understand the joke - thanks to the
| Renault-Nissan-Deimler partnership, all 3 companies share a
| lot of components, and the X-Class is literally a Nissan
| Navara with mercedes interior and badge)
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(page generated 2020-05-01 23:00 UTC)