I’m going to mix it up a little for today’s installment of The Morning Dump, as I actually did a little in-person, human reporting, with a pen and a notebook and everything. Memorial Day draws nigh, and with it comes big car sales. So I went to a car dealership and talked to some salespeople to bring you the latest information.
I’ve also got some data from Edmunds showing which dealers are sitting on 2023 models and, based on their data, how much dealers of various brands have lowered their prices. These are where the best deals are likely to be had, if not the best cars.
What if you’re ready to get rid of your old car? I had my beloved Subaru appraised and learned a little bit about that process so you can make an informed judgment.
Dealerships, like any other business, are subject to being swayed by buzzwords. What are the big buzzwords in the dealership world right now? The first one won’t surprise you. And, finally, Ford is claiming that it’s both making more vehicles in the United States and exporting more U.S.-built vehicles than anyone else.
Let’s Dump.
Why You Should Think About Buying A New Car This Weekend
If you were on the fence about buying a car, there’s a reasonable argument to be made that maybe this weekend is the time to do it.
“The time is now,” Delimar Diaz, a consultant for White Plains Honda in New York told me on my visit to her showroom yesterday. “To be honest, we are getting a lot of inventory and we want to push it out.”
After almost three years of supply constraint, factories are back at full speed and dealers can finally play a volume game as opposed to trying to squeeze as much profit out of the car. Diaz doesn’t remember those days, however, as she only started selling cars three months ago.
With a wide smile and a warm demeanor, Diaz managed to snag the top-seller trophy in just her 2nd month and she’s working on her third. Her approach?
“Connecting with people and working for the people. We all want to make a sale, but you have to make it work for [the customer]” Diaz said.
This showroom is unique in that the dealership has both a matte black Civic Type-R, which is cool, and a matte black Honda Accord, which was a bit of a surprise.
When I asked Diaz if she was feeling any heat from the other salespeople after doing so well so fast she laughed.
“It’s a friendly competition, but sometimes it can be unfriendly…”
How unfriendly?
“…60% unfriendly.”
In spite of the competitive nature of the business, Diaz was happy to introduce me to Paul Kim, another consultant who happened to sell the dealership’s first EV Prologue. I was curious about the buyer, and Kim explained that the customer was trying out all EVs from as many brands as he could and ultimately decided on the Honda due to its functionality, driving dynamics, and the big screen.
Honda dealers have it easy according to Edmunds, which put out a list of the brands with the most 2023 Model Year vehicles sticking around:
Right at the bottom is Honda, with just 0.6% of 2023MY vehicles on lots, which I assume are all Ridgelines. Because of this, the average discount is just $786 for those vehicles. Toyota and Subaru are also both down there at the bottom, although Subaru is showing a slightly higher average discount of $1,450.
At the other extreme is Dodge and Chrysler, which are both sitting on a ton of old inventory. Dodge currently is the worst, with more than half of the inventory share on dealer lots being 2023MY vehicles, which means discounting of over $6,753. These numbers are merely the listed price versus the MSRP, so more discounts can definitely be expected.
“Supply chain disruptions and limited inventory left little to be excited about in summer holiday car shopping the past few years, but discounts on outgoing model year vehicles this Memorial Day weekend are a bright spot for consumers in an otherwise challenging market,” said Jessica Caldwell, Edmunds’ head of insights. “For dealers and automakers, the trend serves as a moment of caution surrounding the old habits of overproduction and inventory glut. It’s also a reminder that the expensive vehicles now being discounted were strong sellers one to two years ago, showing just how significant high interest rates are in today’s market.”
Five of the top seven are Stellantis brands, which is not a surprise. I’m not sure if you want a Dodge Hornet, but now is the time to get a deal on a Hornet.
How Much Do You Think My Subaru Is Worth?
As you’re all aware, I’m not super pleased with my 2016 Subaru Forester, and I’m excited to get rid of it. Part of this exercise was to get my old Subaru appraised as I prepare to potentially offload it for something else. With interest rates high, anything I can do to roll that into my purchase helps with lowering my monthly payment.
I arrived early to White Plains Honda for my appraisal and, of course, they sent me first to the salesfloor to see if I wanted to buy anything. Having finally sussed out that I wasn’t buying anything today, they finally turfed me to the used car department where I met Ivan Rados, the dealership’s longtime Sales Manager, who appraised my car.
Having never done this, I was expecting it to take a while, to answer questions about the missing wheel stud, and list all the maintenance I’d done to keep it in tip-top shape. Nope. He walked around, checked the paint and wheels, turned it on, and snapped a photo of the VIN. It took maybe three minutes, tops.
We sat at his desk and he popped the VIN into vAuto, which is the dealership management software arm of Cox Automotive. Friendly and experienced, Rados was happy to show me the screen and the comparable vehicles.
“I’ll give you $10,500 or it,” he offered, explaining that he could probably sell the car for $14,000 after putting in approximately $2,000 to paint the scuff on the bumper, redo the brakes, and flush and replace all the fluids. The brakes are relatively new, but it doesn’t matter.
“Safety is too important. If I sell the car and something happens, it doesn’t matter that you said you did whatever to the car, it’s not worth it, so we’ll do it ourselves,” he explained.
Rados is cheerful and matter-of-fact, pointing out other dealerships listing the same car, including one listed for way more than the other ones. “It’s been for sale for 96 days, it’s going to be 196 days at that price.”
I was ready to leave when Rados, ever the businessman, asked: “What do you want for it.”
I explained that Carvana offered $11,400 and he said “Ok, I’ll give you $11,400.”
Though I’m not quite ready to sell the Subaru juuuust yet, I shook his hand and promised him the first shot at it. Rados admits I could get more on the private market, but I don’t have the time or energy to deal with tire-kickers or a million “is it still for sale” messages.
The lesson here is that, at least at dealerships, this isn’t a huge margin business. Rados is trying to make $1,000 or maybe a little more on these cars, so if you see what your car is selling for at other dealerships you can work your way backward to a price.
There are also tax benefits to trading in your car at a dealership, as in many states (including New York) you can reduce the trade-in price from your total taxable amount.
And, finally, since this is often a volume business, remember that the first price isn’t always the final price.
Yes, Dealerships Are Talking About AI
There’s a fun post over at Cox Automotive about dealership business buzzwords, and it’s amusing to see that all businesses are thinking about the same thing. Specifically, artificial intelligence:
Historically linked to autonomous vehicle systems, AI is streamlining the entire automotive marketplace today. AI leads to access to more data, enabling dealers to get the right car in front of the right buyer at the right time. Dealers can use AI data to serve personalized messaging and can also help with retargeting as it continues to drive brand awareness and profits.
The other buzzwords are “CDP” (Customer Data Platform) and “Hybrid Retailing,” if you were curious. CDPs just go to show that there’s a SaaS tool for everything.
“Hybrid Retailing” is a little more interesting as all retailers, from Amazon to fast food companies, are reconsidering how they blend online sales with in-person sales. For dealers, it’s clear that more people are comfortable doing the vast majority of the buying of a car online, but inevitably want to actually see and touch a thing before they spend tens of thousands of dollars on it.
Ford: Look At How American We Are
What makes a car American? Does it come from an American brand? Is it built in America? Does it have the most American-sourced parts? Based on a mix of parts sourcing and production, Cars.com thinks the most American cars are Teslas, which makes sense, followed primarily by Japanese automakers with robust American production.
This also makes sense as, in order to access the market, various administrations (especially Ronald Reagan) leaned heavily into Japanese carmakers to make cars here and to use U.S.-made parts, which then led to major Japanese suppliers opening up plants here.
How does Ford do on the list? The automaker is somewhere in the middle, with the Lincoln Corsair taking the 16th spot.
Nevertheless, Ford is out this week pushing data from S&P Global Mobility that shows no one is making more cars in the United States than the blue oval brand. According to the data, Ford is the biggest employer of American autoworkers, the biggest producer of cars in America (80% of Ford’s vehicles are made in America), and also the biggest exporter of American-made cars (260,000 last year).
“Ford is a uniquely American company,” said Andrew Frick, Ford Blue president. “We are proud to serve our customers with vehicles that embody the best of American innovation and ingenuity.”
I’m mostly sharing this story this morning because I really like the above graphic that shows all the places where Ford is exporting its vehicles. Curiously, Ford is shipping American cars to Russia according to this. I gotta ask Ford about that one.
What I’m Listening To While Writing TMD
I played an ultimate frisbee game last night on a team that was about 50% college students or recent college grads and it was exhausting. I felt great and a little old. So now I’m going to make some of you feel old by pointing out that the self-titled Violent Femmes album is exactly as old as I am, which is a hair over 40. These guys were like 18 when this album came out, btw.
The Big Question
When was the last time you sold a car. How’d you do it? Was it a huge pain?
Hi Matt, I think the graphic says Ford exported 260,000 more cars than the next highest exporter, not 260,000 total (which would not be very impressive).
Sold my 94 Miata to a kid from Miami for $4k, he got me to knock off $500 when he found the paint had peeled off the door hinges, but it was pretty cherry and I hope its been a good car for him. Think that was the first serious offer on fb after a month starting at $7k, but I expected that. Almost tried an auction but I was too lazy. ~3 years ago.
The last 2 cars I sold were for my brother and my mom, and the process wasn’t painful, since there just wasn’t much interest in either car, being either old, high mileage, or both. The painful part was accepting barely half of the listing price for both of them, since when I finally did find buyers, I figured if I didn’t take those low offers, there might not be another one for quite some time. They were both ok with what they got, my brother even insisted on giving me a cut of the sales money, even though I said I didn’t want to take anything from the paltry sum I got him.
Now though, I’m trying to sell my high-mileage 2010 BMW 335d, and that isn’t going to be fun. I’ve already got one “is this available” with dozens more on the way, and an offer at $2200 below listing price because of “hella high mileage” and “need to spend 2k on [emissions] delete”.
My understanding is the used car lot can be very lucrative for a place like White Plains Honda. They “steal” trade ins because customers have no idea what is going on when they fall for a 4-square “monthly payment” price. Or the auction prices give them a good few grand to mark up for retail. Compare that to in normal times when a new car might be selling for next to nothing in profit.
When I sold cars, we got flat rate commission on new cars (that went up as you sold more in the month), but 25% of gross profit on a used car. I didn’t sell cars for long, but had a few nice paychecks (for a 21 year old) because I sold a used car with a couple grand in profit even after negotiating a bit.
I donated my last car. I knew it was “worthless” to a dealer, it had 215k miles on it. I put it on Craigslist because it was a 2-door Honda Civic, so I knew someone would want it, but then a charity contacted me about it. They fixed cars up to give to someone who needed it, so I could claim blue book on my taxes, and not deal with the Fast and the Furious crowd trying to lowball me. So I took down the Craigslist ad.
And I wish I could buy a car this weekend. We might settle at some point, but for now we’d still like an elusive Toyota Grand Highlander hybrid and there are near zero on dealer lots.
I’m not sure what I’ll do with our current car. It is in good shape overall and has low miles for its age, but it is a 2012, so I think it might be too old for Carvana, Carmax, etc. I’d prefer to not let a dealer steal it. But the idea of dealing with private party buyers sounds terrible to me right now. So maybe it just becomes insurance if my 160k mile car has a problem one of these days.
Carmax has some vehicles of that age although I think that is about as far back as they will go. Carvana seems to go back further, I’ve been surprised by the age of some vehicles I see on there, for even plain run-of-the-mill Civics, RAV4s, etc. Low mileage probably helps too, as they can advertise low for the year even if it is six figures worth. May not be any better than a dealer value-wise, but as a matter of getting it gone it might still be viable.
Early 2015, sold my Accord to someone looking for a newer EX-L manual to replace the one his daughter was driving. I think he was actually surprised how low pressure I was to deal with, but it was coming up on 2 months and was ready for it to move. Was a couple grand more than if I had traded it (but should have just kept it).
The other private sale I made was the Saturn that was my first car. Guess the new owner never actually registered it and abandoned it in a field, so a couple months after it was sold, a cop came to my family’s door asking as we were the last known registered owner. Showed the bill of sale I wrote up and maybe the copies of the purchaser’s licenses we had taken and we were clear. Not sure if there was something else going on with the car in the condition it was in that was left out of the conversation…
The last time I “sold” a car was when I had a end-of-lease Jetta that (unbelievably) was worth more than the residual at the end of the lease. Was a pain since my state would have required two sets of sales taxes to sell it to a private party (one when I bought it from the leasing company, and one when I sold it to a private party). I called a few VW dealers and found one willing to buy it (they are wholesalers who do not pay sales tax) at a high enough price so that I didn’t have any turn-in costs (it was over miles). Did all the paperwork and then a month later VW credit (I think) tracked me down claiming I hadn’t turned in the car – luckily I had the paperwork and faxed them the documents and didn’t here anything else back.
Previously to that most cars leaving my possession were trade-ins, junkyard pickups, or lease turn-ins. The trade-ins were mostly with a dealer where the manager was a friend & neighbor and were usually for higher $ than I expected. And before that I sold a 1983 Oldsmobile Cutlass in 1991(?) to a co-worker for $500, and we both thought we got the better deal – easiest sale ever – he did all the paperwork and government trips. I was done with the car because the speedometer was not working (and I had done the easy fixes) and the car was red making it likely to get pulled over. My co-worker had a long commute, and the car treated him well. I left the high-end aftermarket panel-shelf speakers and door-speakers but pulled the subwoofer and amps for my next car. That Cutlass could eat miles nicely, but I was ready for something more nimble.
Sold a car as a trade-in on a used vehicle. Used was what I wanted, excepting color. Offered X for the total deal. Told sales manager to find another $500 in the deal for me, and I didn’t care which side, and it was done.
Left happy and fine; wasn’t worried about whether or not I had made a great deal or not, 4 years ago.
“When was the last time you sold a car. “
About 2 years ago at the height of the pandemic shortage… sold my mom’s low mileage rust free 2009 Toyota Yaris after she lost her license.
“How’d you do it? Was it a huge pain?”
Listed it on Craigslist.org and Kjiji.ca. It wasn’t a huge pain to me. There were at least a few prospective buyers who were bitter about high vehicle prices.
One dipshit in particular believed I should sell him a car worth $7000 to $8000 in that market for $1500… just because he said “it will be worth scrap value in a year”
The dipshit probably believed he was making a good case for me to lower my price when in reality, him being a dipshit meant I would not lower my price for him due to him acting like a dipshit.
In the end, I ended up selling it to a very nice young woman who just needed a reliable car. She actually had an order in for a new Hyundai Accent, but the dealer couldn’t get any supply and she needed a vehicle by a certain date for a job she was starting. Doing the deal with her was quite enjoyable.
Funny thing… her boyfriend had the exact same Toyota Yaris sedan… even the same silver colour… just with a lot more mileage.
So when her and her boyfriend initially showed up in that car, it felt like deja vu.
In Jan 23 sold my Venza to Auto Nation. Clean, low miles.
Offered me 11K.
Had to go home, (10) miles to retrieve papers.
Back a half hour later. Offer dropped to 8K…FUCK!
Needed the cash fast so I let it go. But I told the sales guy (who claimed he shot Bin Laden as a CIA agent, right!) to eat shit and die ASAP…
Screw Auto Nation, the fake CIA assassin, and the god damned weasels there…
Never again.
VAuto is a pretty neat tool, but we just switched to a new one called VinQ that gives you an absolutely INCREDIBLE amount of info. Email me and I can run it on there for ya if you’re interested.
Thanks!
No matter how cordial, the dealerships are giving you SaaS!
I’m sticking with classics.
I forgot what 8 was for.
I sold my V70 to my Dad, so that was pretty simple. Funny though I’d had at least three other people offer to buy it before it was even for sale…
Counterpoint: we sold our V70 to our son, for $1.
Hahaha, that’s always great too!
Sold a 15yo Saturn Vue to a nice woman a few towns over. Used craigslist. It was really easy. Priced it reasonably and sold it to the first person that messaged me and wasn’t an asshole.
I could have spent months trying to squeeze another $500 out of it but I have better things to do. Priced right and it’s out the door.
I sold my 2008 Mazdaspeed 3 on Cars and Bids in August 2023. I wanted it to have an audience of enthusiasts who actually knew and cared about the car and the condition/maintenance it had instead of dealing with clueless tire kickers wasting my time. It went exactly as smoothly as I had hoped. I had payment in hand within a few days and a transport service picked it up. The selling price was just a little lower than I had hoped, but looking at prices of comparable cars which have sold since, I think I juuuust caught the tail end of the pandemic price bubble because they sold for even less than mine.