Is the Automobile Bubble Bursting?

[audreyh1]

It's pretty unprecedented to cut prices that much right?

Some cuts were over $10k?

I can't recall ever seeing that, the manufacturer's cut prices.

At some point the dealers will have to sell cars under MSRP too.

Of course Tesla raised prices a lot the past two years so you could argue that they're bringing them back down to levels more appealing to buyers. You know back when they had months or over a year of backlog?

The price increases in 2022 were huge. The lead times crazy. Unprecedented times.

 

[JoeWras]

Agree with Audrey on the unprecedented either way up or down.

MSRP cuts are so rare. It is instead done through other means. Since Tesla doesn't have the dealer network, they have to go direct on price decreases.

There have been times in the past where manufacturers were giving huge incentives of like $2.5k, back when vehicles cost a lot less. Additionally, the manufacturers would throw in "holdback" incentives to dealers which savvy consumers could use to drive hard deals below MSRP.

 

[freedom2022]

MSRP is not the price from car manufacturers.
To know the price from manufactures, we have to see the invoice price.
The dealers don't want to show us the invoice price.

 

[audreyh1]

MSRP stands for Manufacturer Suggested Retail Price.

MSRP is shown on the auto window sticker. Traditionally the auto dealers have offered some discount from MSRP or some other incentive like cheap financing. They are buying the cars from the auto manufacturer at a wholesale price.

 

[Music Lover]

MSRP is not the price from car manufacturers.
To know the price from manufactures, we have to see the invoice price.
The dealers don't want to show us the invoice price.

The practice isn't exclusive to car dealers. No business wants to show you the invoice price. But a TV from Walmart and all you ever see is the list price.

 

[38Chevy454]

MSRP is not the price from car manufacturers.
To know the price from manufactures, we have to see the invoice price.
The dealers don't want to show us the invoice price.

....and to get technical, the invoice price is not the actual cost to the dealer. Actual cost is affected by several incentive and rebate payments. Those incentive payments can be from financing rebates, commissions on warranties, mfr volume incentives, mfr/dealer hold back, and more. It's like invoice is the official dealer price, but then the dealer gets discounts/rebates that reduce the actual cost to less than invoice. So even buying a car at invoice price, the dealer is not selling to you at zero net profit.

In the internet era, you can find invoice price pretty easy. Which does help you in negotiating. Just remember the dealer is paying less than invoice price when a car sale is all done.

 

[Montecfo]

I know many people ditch their old ICE vehicle to buy electric. So there must be some loss.

I also believe many people will keep their old ICE vehicle a little longer than usual while getting used to the idea of getting an EV. Learning about the pros and cons. ICE sales would therefore go down for a period. I think we are getting there now.

So if many bought a second car to travel safe during the pandemic they may now keep the newest and sell their oldest. And then drive that one for a few years. Until they eventually trade it in for an EV.


This would cause sales of both new and used cars to slump.






It is fantastic that BYD is selling loads of electric vehicles!

But it's not so good that half of those are hybrids and not EVs. Hybrids have two motors and a battery so they get less miles/gallon. They are basically a scam in my opinion - getting EV discounts while continuing to pollute.

I sincerely hope that all the traditional car makers survive the transition to sustainable energy. Because Tesla cannot make enough cars fast enough. We need old and new car makers to survive to manage this.

Well, plug in EVs also continue to pollute since primary source for electricity worldwide is fossil fuels.

 

[audreyh1]

Well, plug in EVs also continue to pollute since primary source for electricity worldwide is fossil fuels.

But not in Norway where Christine lives.

 

[JoeWras]

But not in Norway where Christine lives.

But the poor fish!

 

[ERD50]

Originally Posted by Montecfo View Post
Well, plug in EVs also continue to pollute since primary source for electricity worldwide is fossil fuels.

But not in Norway where Christine lives.

Norway exports it's oil, so the rest of the world can use it to pollute! And then the Norwegians can act all high and mighty about their EVs running on their hydro (which most of the rest of the world doesn't have much of)!

Pay no attention to that man behind the curtain!

https://energifaktanorge.no/en/norsk-energiforsyning/kraftproduksjon/

Hydropower. Hydropower is still the mainstay of the Norwegian electricity system. At the beginning of 2021, there were 1 681 hydropower plants in Norway, with a combined installed capasity of 33 055 MW. In a normal year, the Norwegian hydropower plants produce 136.4 TWh, which is 90 % of Norways total power production.

If every country had that much hydro available (without having the environmentalists fight it for valid, and maybe not so valid reasons), EVs would be a lot more common everywhere.

-ERD50

 

[JoeWras]

And we're back to an EV thread. I didn't help matters.

 

[ERD50]

I got sucked in, so I'll stop now (though I could easily go on). This thread is about the Automobile supply/demand bubble, not EVs and pollution, etc.

I'll stop (until I forget again!)

edit/add: I cross posted with JoeWras

-ERD50

 

[misanman]

Yes, I was about to put my 2 cents in but figured I'd get my hand slapped.

 

[Music Lover]

Norway exports it's oil, so the rest of the world can use it to pollute! And then the Norwegians can act all high and mighty about their EVs running on their hydro (which most of the rest of the world doesn't have much of)!

Pay no attention to that man behind the curtain!
-ERD50

It's easy to go off topic when those in favour of EV's start lecturing others. But some of the people picking on them have extensive travel budgets and live in large homes.

 

[Montecfo]

But not in Norway where Christine lives.

Only reference to a country in the post I responded to was China. In fact, she referred to BYD.

So if her reference was only to Norway, which uses hydro but traces its prosperity to exports of fossil fuels, that was certainly not evident.

And my statement is correct regardless.

 

[MichaelB]

In the interest of an informative discussion I would suggest everyone stop making personal comments and demeaning others and stick to the thread topic.

 

[CaptTom]

Thanks @MichaelB. I do have some opinions on these (off-topic) topics, but I'll bite my tongue and get back to my OP...

Today I passed a large-ish car dealer. I saw two car carrier trucks in the lot, one empty and one full. The lot looked completely full. I'm not sure there was room to unload the second truck. For the last several months this same lot has been almost empty, with just the first couple of rows near the road filled. I don't know how many of these vehicles were new, or used. This dealer sells both.

Inventory appeared to have been creeping up in other lots I pass, but this was a very noticeable change, and the first truly full lot I've seen yet.

 

[JoeWras]

Captain, what brand?

The used car lots are definitely filling. A lot of new car dealers fill their lots with used so it doesn't look weird. One year ago, they had nothing on nothing (no used or new) so some lots literally were growing weeds.

 

[NW-Bound]

Having already bought a new car on Jan 2, 2021 before the runup in price, I don't care about the auto bubble bursting.

What I am watching for is the RV bubble burst. Maybe I can get a gently used class B for cheap. Heh heh heh...

 

[REWahoo]

What I am watching for is the RV bubble burst. Maybe I can get a gently used class B for cheap. Heh heh heh...

I'm reasonably sure in the not-too distant future there will be a number of poor schmucks who lose their jobs and need to shed debt, only to find they are upside down on their RV loan. Perfect time to take advantage of the opportunity and see what the bank will accept to take it off their hands.

 

[Chuckanut]

I'm reasonably sure in the not-too distant future there will be a number of poor schmucks who lose their jobs and need to shed debt, only to find they are upside down on their RV loan. Perfect time to take advantage of the opportunity and see what the bank will accept to take it off their hands.

You’re starting to tempt me.

 

[REWahoo]

In the interest of an informative discussion I would suggest everyone stop making personal comments and demeaning others and stick to the thread topic.

So many of these threads like this one can trace their origin to a Monty Python sketch...

 

[NW-Bound]

I'm reasonably sure in the not-too distant future there will be a number of poor schmucks who lose their jobs and need to shed debt, only to find they are upside down on their RV loan. Perfect time to take advantage of the opportunity and see what the bank will accept to take it off their hands.

My neighbor down the street just got a Carado class B. I did not ask him how much he paid. He invited me to look at the interior, and it's a bit smaller than the Airstream Interstate with rear dually wheels that I have had an eye on for a long time. But I am easy. If I run across a good deal, I am not picky and will buy it.

Back on autos, I just came back from an errand and I drove by several car dealerships. They now have some cars on the lot, but nowhere like it was in the old days. Maybe things will not get normalized until later this year.

 

[CincyDave]

....and to get technical, the invoice price is not the actual cost to the dealer. Actual cost is affected by several incentive and rebate payments. Those incentive payments can be from financing rebates, commissions on warranties, mfr volume incentives, mfr/dealer hold back, and more. It's like invoice is the official dealer price, but then the dealer gets discounts/rebates that reduce the actual cost to less than invoice. So even buying a car at invoice price, the dealer is not selling to you at zero net profit.

In the internet era, you can find invoice price pretty easy. Which does help you in negotiating. Just remember the dealer is paying less than invoice price when a car sale is all done.

This. I always know dealer invoice, any rebates to the dealer or buyer and what the holdback is when I go to a dealer. I bring the info with me so they know I have some idea what I'm talking about. Bulk dealer sales incentives are tougher to come by. In this market, probably doesn't matter since apparently dealers aren't dealing. Glad I won't be in the market for a car for a while.

 

[ExFlyBoy5]

I would be happy to see these prices to come down some. We have been looking for a beater of a pickup truck for my DW to use as a "garden getter" but the prices have been simply ridiculous. We had a trailer she could pull behind her 4Runner but she doesn't like having to back it up.