I’ve only ever bought one brand-new car in my life: an F56 Mini Cooper S, to replace our R56 after all the mechanical problems it had (“It’ll be different this time,” I convinced myself, like someone getting back together with a terrible ex who swears they’ve changed.) We also made that decision because we found some heavily discounted base models that our local dealer was happy to be rid of for about $25,000, which I thought was a very solid deal for a BMW-built baby hot hatch.
That was about seven years ago. Today, it feels unfathomable to score that kind of deal on almost any new car, no matter which one you want. New cars are priced out for all but the wealthiest American buyers. And how long can that last?
Our collective pricing grievances lead the morning roundup today, along with an update on Vietnam’s VinFast, more shakeups at Volkswagen’s software division and China’s automakers are about to conquer another market. Hop into the car you’re holding together with duct tape and prayer because replacing it would cost $48,000, and let’s get moving.
The Widening New Car Affordability Gap
At this point, we’re not telling you anything you don’t already know: The new cars are too damn expensive. A few weeks ago, one of Toyota’s top U.S. bosses predicted the average new ride would soon be around $50,000; it’s already pretty close at about $48,000 in March, according to Kelley Blue Book. The average new car payment is around $730 now.
But more mainstream news outlets like The Washington Post are starting to hit back at automakers over this too, and even the car dealers are starting to express frustration about their growing inability to move some of this metal:
Manufacturers determine which cars get sent to dealerships, and typically won’t send new inventory until the current stock gets sold. In Maryland, where Andrea White has expensive cars sitting on her lot, she said she’s “just suffering through it.”
“We have some final edition Dodge Challengers for $80 or $90K,” White said. “We don’t even want another one.”
Dealers say manufacturers are lifting prices beyond what customers will go for, in some cases leaving dealers stuck with models they can’t sell. Earlier this spring, White had 76 new vehicles on the lot of her Annapolis, Md., car dealership. At the time, she had no takers on the $88,000 Jeep Wagoneer. The $115,000 Grand Wagoneer? Not budging. Many of her cars cost between $50,000 and $60,000.
“I’ve got a few that are so expensive, I would do anything to get them off the lot,” White said. “I’m just giving people prices so that we would just break even. That’s how desperate I am to dump this expensive stuff, because it’s hurting us.”
That’s because what we’re seeing is a total shift toward the top of the market — the wealthiest American buyers — leaving basically anyone else to either find a decent used car (which has become incredibly difficult and also expensive) or to over-extend their budgets to the point where delinquencies and repossessions are skyrocketing.
Only three cars in America are now priced below $20,000: the Kia Rio, the Mitsubishi Mirage and the Nissan Versa. That’s kind of shameful. Check out these trends, also from the Post:
Even as inflation is easing and global chip supply shortages are beginning to resolve, more Americans are being priced out of the nation’s new car market, industry and government data suggests. Spending on new cars by the lowest 20 percent of earners dropped to its lowest level in 11 years. Meanwhile, spending on new cars by the top 20 percent reached its highest level on record, going back to 1984, according to the most recent data from the 2021 Consumer Expenditure Survey, not adjusted for inflation.
We know why this is happening: chip shortages, labor shortages, rising interest rates, bigger tastes for bigger cars, the need to shore up cash to transition to electric vehicles, and outright greed on the part of the car companies [Editor’s Note: One could also just call it smart business. Maximizing profit is any American company’s goal. -DT] just who run on margins and are raking in record profits. Meanwhile, the rest of us are left to figure out if a bus pass is a better investment these days.
But what I wonder is, where does it end? Does it ever?
If the dealers can’t actually sell these comically overpriced cars—and the $100,000+ Grand Wagoneer is a great anecdote here—when do the automakers back off on pricing? Of course, that would mean fewer profits and shareholder returns, so I suppose it’s completely out of the question.
China Aims To Conquer Australia Next
Here’s one answer to this problem, and you might even call it a market-based solution: new players show up to take the place of the overpriced brands. And in many places, those cars are coming from China. That’s already happening more and more across Europe.
Add Australia to that list now, too. And not even with EVs—not yet, anyway, but soon enough. Here’s Bloomberg on the rise of Chinese cars Down Under:
Never mind the auto industry’s relentless push toward electrification, Chery Automobile Co. is the latest Chinese carmaker trying to win over Australians with gasoline-powered SUVs pitched at the lower end of the market.
Chery’s mid-size Omoda 5 is selling across Australia for as little as A$32,000 ($22,000) for the base model. A colleague and I drove a high-end version around Sydney for four days. It’s stuffed with extras you’d normally find in luxury cars — think heated steering wheel and exterior puddle lights — and costs not much more than A$35,000.
Australia’s best-selling car, Ford Motor Co.’s Ranger pickup, can go for more than double that price.
Wuhu-based Chery joins Chinese rivals Great Wall Motor Co. and SAIC Motor Corp. — owner of the MG brand — in pouring relatively affordable cars into an Australian market that’s been slow to turn to electric vehicles. Chery was China’s second-biggest car exporter worldwide last year.
And yes, Australia has the same problems I listed above that we do. Interest rates are high, the market already loves trucks and SUVs and prices are through the roof. So Aussie buyers are turning to this new crop of Chinese brands—which are now apparently pretty good—such that sales of vehicles from China have increased 69% in Australia this year. Nice.
Australia’s market is now 8% EV (a little higher than America’s) and you know these Chinese brands have big plans for global electric domination. So are they any good?
How did the Omoda 5 stack up in the flesh? The car’s technology, at least in the better-equipped EX model, appears to punch above its weight. There’s a powered passenger seat and tailgate, heated front seats and an electric sunroof.
Most startling of all, a 360-degree camera system can beam onto the driver’s display a semi-translucent image of the vehicle, as if you were looking at it from outside. The trick reminded me a little of James Bond’s much-ridiculed “invisible” Aston Martin in the 2002 movie, Die Another Day.
I’m very curious about the quality and reliability of these cars, but even if they aren’t great, Hyundai and Toyota’s early efforts abroad weren’t always spectacular, either. The point is, they’re priced to compete and take over quickly in Australia.
Chinese-made cars face a steep 28% tariff in America and I don’t see that changing anytime soon; it’s part of why Volvo and Polestar are pushing for more U.S. production. But if it ever does, expect a seismic shift. You know they want in on this market.
So Does VinFast, But It’s Been A Rough Go So Far
One of the more perplexing newcomers in this space is VinFast, the electric upstart automaker from Vietnam. On one hand, its parent company Vingroup is as massive as it gets, with ventures in hospitals, hotels, smartphones, Big Data, pharmaceuticals—just about everything. And it’s flush with cash.
On the other hand, making cars is hard, as we like to say. This is a car with massive ambitions from a country that’s experience making cars beyond CKD kits is minuscule; VinFast is still the only domestic passenger vehicle brand in Vietnam. Now it wants to break into America’s EV market, not to undercut competitors but to compete with Tesla.
It’s been tough so far, as these things usually go. Here’s Anurag Kotoky and friend of The Autopian Sean O’Kane at Bloomberg to explain the latest. The story centers on Pham Nhat Vuong, the richest man in Vietnam, and his troubled entry into the car game:
Vuong’s difficulties are proving costly. VinFast, his automaker that filed for a initial public offering a year ago, has delayed plans to list in the US. Vingroup JSC — Vuong’s conglomerate spanning homes, hotels, hospitals and shopping malls — and its affiliates and lenders have deployed a staggering $8.2 billion to fund the car company’s operating expenses and capital expenditures the last six years.
The return on all that investment has been meager: VinFast sold just 93,000 vehicles and 162,000 e-scooters.
Vuong has only doubled down, lining up another $2.5 billion for VinFast, $1 billion of which will come from him personally. This month, the company plans to start delivering longer-range versions of its VF 8 sport utility vehicles to US customers.
What’s still unclear is how quickly those SUVs will catch on in what is an increasingly cutthroat EV market, with Tesla slashing prices and putting pressure on incumbents that have been around more than a century. VinFast will need to spend heavily to familiarize Americans with its brand and set up networks for distribution and retailing vehicles, not to mention overcome the growing pains Musk endured when trying to mass manufacture cars.
As that story notes, various early reviews, including ours (thanks for the link, Bloomberg) have been mixed at best. The company is burning through cash, experienced executives from Western auto brands and customer goodwill. VinFast has just 310 cars on U.S. roads now but should add another 100 soon. And the Inflation Reduction Act, which incentives U.S. car and battery production, has done VinFast zero favors.
(As a side note, who’s buying these things? If you bought a VinFast, we want to talk. Get in touch.)
This may be a venture that keeps going as long as Vuong wants it to. But the odds are long here, as we all know.
More Upheaval At Volkswagen’s Software Division
The Volkswagen Group just can’t catch a break on the software front. In December I wrote about the long-stewing effort at VW to overhaul its in-house software division, now called Cariad. The goal was to unite what were previously disparate, every-brand-does-its-own-thing software and infotainment system strategies under one roof in order to prepare the entire conglomerate for a future of connected cars, subscription services, over-the-air updates and advanced autonomy.
It’s not hard to understand why that’s crucial. Given everything that’s coming, it doesn’t make sense to have, say, the Volkswagen brand doing its own thing on the software front and Audi and Porsche doing a different thing. Unifying this stuff is the only way to make it scale.
But things are still not going great at Cariad, according to Reuters. Such that a bunch of people there could soon get fired:
Carmaker Volkswagen is set to dismiss all but one of the executive board members at its software division Cariad next week to try to resolve development problems, a person familiar with the matter told Reuters on Saturday.
The unit – set up under former VW group CEO Herbert Diess -has exceeded its budget and failed to meet goals, contributing to Diess’ departure and replacement by Oliver Blume last September.
Cariad’s supervisory board is expected to sign off on the dismissals in a meeting next week, the source said on Saturday, adding that only the unit’s head of personnel, Rainer Zugehör, might stay on.
A VW spokesperson said the German company was analyzing Cariad and its projects.
One big reason for the frustration, apparently, is more delays for crucial future EV products like the Porsche e-Macan and Audi Q6 e-tron. That’s interesting because last year, software issues pushed those same cars back to 2024. I guess they still haven’t figured it out, and that’s a big problem because it needs those Tesla-fighting EV crossovers like yesterday.
Anyway, this morning Reuters also reported that Bentley’s production chief Peter Bosch is due to take over. Here’s an interesting tidbit from that story:
[VW Group CEO Oliver] Blume is not planning to shift gears completely with the new leadership, sources told Reuters on Monday – but he does intend to place greater emphasis on partnerships to get the carmaker’s software plans underway, rather than going at it alone.
“We will certainly make some changes, but this is not a 180-degree turn,” one source said.
The VW Group’s goal is generally always world domination; don’t just make cars, but Make All The Cars. If it wants this future at all it has to get the software right, but now it looks like it will turn to some outside help to get that done.
Your Turn
What’s your solution to new car pricing woes? When was the last time you tried to buy new, and how much did you pay?
Here’s one idea: just be rich! That’ll solve any new car-buying woes you may have. Have you tried being rich, or even better, being born rich?
Top Photo: Erik McLean/Unsplash
My solution is to just keep daily driving my 1966 Thunderbird because screw it, I literally have no better options. When I bought the ‘bird, I figured I could always buy a cheap Civic if I needed something more practical… those were different times. Air conditioning and working windows and decent fuel economy without premium gas aren’t really necessary anyway, right?
Flush: Honestly, between my lack of a running parsh, my Lancer getting up in years, and my overwhelming desire for a newer, nicer parsh that could tow my parsh, I’m looking harder at changing industries. Sorry! Journalism sadly doesn’t have enough jobs, and the ones that are out there just don’t pay very much. I am looking to sell the hell out. Things are too expensive, and being good at something no one’s hiring for doesn’t pay the bills. Gently used Mahogany Metallic Cayennes with solid maintenance records and tow packages ain’t cheap, either.
Sorry to folks who enjoy my writing, but yeah—that’s part of why I’ve dropped off the map lately. I’m tired of being mostly unemployed, and most journalism companies seem to be laying people off. Maybe I could keep writing some around a so-called “day job” provided that it’s not like, Porsche hiring me on the comms side or some other obvious conflict of interest. I had a day job doing software marketing before I went full-time into cars, and welp, I could do that. I want a parsh. Like, I’m done with this lack of a nice parsh situation. I need a job that makes running-parsh-and-enough-left-over-for-track-days money.
If anyone has any connections at compelling places to sell out to—like, I’m not going to switch sides if I end up paid the same as I was at my last journo job—you know how to find my gottdanged LinkedIn, let’s talk. Bonus points if it’s in Austin because I like having decent tracks and the good American F1 race in my backyard. Yer girl wants to do more track days again, and tow that hooptie there with a Cayenne.
How about making some models with only a few microprocessors? Let’s begin with one for engine control, and one for cell phone interface. There’s no need for every stinking control in a car to pass through a computer. The best cars I’ve owned have been the simplest.
This!
If I ran a car company, most of my models would be electric, AND these electric cars would be mostly analogue and repairable with basic tools. Where there are microprocessors, all of the code would be open source.
Give us one with simpler controls! I prefer manually adjusting seats, and after growing up with a string of GM cars where you didn’t touch the electric windows if you didn’t have to, I can even get along with manual windows, too. I do not need all the bells and whistles that have become standard. Stereo and HVAC and…seriously, I’ll survive.
The last (and only) new car I purchased was my 2008 Saab 9-3 Aero in September of 2008. With the “employee pricing for everyone” deal GM was offering plus plenty of other incentives, and my 2003 9-3 as a trade-in, I paid $28K for a $38K car (equivalent to a $53K car today with inflation). At that price it was the same price as a year-old one, so it was a no-brainer. I usually buy slightly-to-heavily depreciated cool stuff and run them into the ground. I had that Saab for 7 years and 140K miles. One of the best cars I’ve owned.
My strategy for the current car market shitpocalypse is to buy cool used vehicles that are largely underappreciated, thus relatively inexpensive to buy, well-engineered, so they will last a long time with maintenance, then put way more money than I should into said maintenance so it would be financially suicidal if I ever sold one. Then I slowly collect more so I can comfortably sideline one or more at a time with upgrades, thereby keeping my interest in them, modernizing them here and there, and leaving me with little to no money for other vices. Then, collect underpants.
To that end, the current fleet consists of a 1995 BMW 530i, a 2004 Cayenne S, a 2001 Range Rover, and a 2018 Alfa Stelvio. This plan is flawless. What could possibly go wrong? That reminds me, one of these days I need to get the Rover out of storage to rebuild the front end, put it back on air, get new tires for it. Oh, and the BMW needs a secondary air pump, and the Cayenne needs front brakes, and the Alfa, well, actually, that one’s good. Wait, which one is coming up for registration next? Does it need smog this year? What does “ended” mean when I look up a part’s availability? Why won’t that guy on UK eBay ship to the US? Is it weird to base my next house purchase on its proximity to an Alfa dealer? What do you mean they don’t make tires in that size anymore?
Flawless, I tell you.
You had me at collecting underpants. Well put for what many of us go through, and nice collection, of cars that is.
Thanks, appreciate it. The unfortunate reality is that it becomes harder and harder to keep some of these cars on the road with the parts supply dwindling. The P38 and E34 in particular are seeing a lot of parts going NLA in the past couple of years. I’ve become quite adept at treasure hunting.
Porsche is very good at keeping a ready supply of parts available for what they consider “classic” models, which the 1st-gen Cayenne has become. You might pay through the nose for certain parts, but at least you can still get them. JLR Classic has a policy of “if enough people ask, we’ll tool up and make the part again”. Not exactly helpful in real-world situations. As for BMW, as far as I’m concerned, the company that made my E34 no longer exists.
Then there is the environmental issue. As long as the vehicle is new enough to pass emissions, the carbon footprint of keeping an older vehicle running is much smaller than purchasing a new one, as that vehicle reached a net carbon neutral quite a long time ago, at least in regards to the resources it took to manufacture it.
Economically, a lack of buyers for new cars is going to create a shortage of used cars in the coming years, which is all most people are going to be able to afford, so that will drive used prices up further, which will drive new prices up further, leading to more scarcity, which will push most of us to try to hold onto what we currently have, except there will be no parts available, so those cars will end up being worthless, further eroding buying power. So the only option will be to extend the loan terms out even farther, except that banks are currently pulling back on lending due to rising default rates. So the only hope is that the influx in repossessed vehicles flooding the market will give people a little relief over the next couple of years.
I think I need to start collecting more underpants.
So… the solution to the lack of used and affordable new cars, is to start an aftermarket parts company to keep all existing cars on the road for as long as possible, and train up more people in the art of rebuilding and restoring even seemingly mundane cars?
Seems doable. Now to find a large chunk of money somewhere to make it happen…
Since cars are so expensive I’ve been impressed by the pricing and looks of the new Chevy Trax. A quick search showed me that a local dealer had two in transit. The price for each one was about $34,000. I knew this was off kilter until I realized that they unashamedly tacked on a $7500 markup. Chevy dealers are a dime a dozen. I hope this particular dealer rots.
Same with the Maverick. Great deal for a XLT Hybrid at around $30k. Not so great at the $40k any dealer wants for one.
Laughing so hard at that Grand Wagoneer price.
It’s very frustrating to be a car shopper right now. My partner and I both purchased new cars in the last year. He waited almost 2 months for an Elantra Hybrid Blue to come into a dealer who was charging no markup. I just purchased a Bolt EV at MSRP only because of the $7500 tax credit. That makes both cars around 24K net plus tax and title. This is the new bargain price for new cars. It kills me to pay that much for a a new car and I hope at some point, this changes. I am so sick of cars getting dropped for SUVs. The Bolt is being replaced with the Equinox EV. Ugh.
Just bought a new Bolt EV.
After 2 years of consecutive price decreases ($10,900) in anticipation of the $7,500 tax incentive going away, the tax incentive was brought back AND GM kept the price the same.
The Bolt EV or EUV are by far the best bargains in the industry right now (if you can find one).
Invoice deal for $29,990 (less eventual $7,500 tax credit) puts me at $22,400 before TTL.
PLUS GM will install 240V power in your garage at no charge.
There are deals to be had out there if you do your research.
Where was this? The few Bolts I’ve seen left on dealer lots have markups on them, and its been that way since they became great deals.
This is a direct result of the auto industry first marketing expensive SUV/trucks to 1) make more profit per sale and 2) exploit the EPA’s rule on heavy vehicle. Now all we have are expensive, high profit vehicles and expensive, subsidized EVs (RIP Volt and Bolt, etc). This has to stop as there are only so many times financially illiterate average Americans can roll negative equity into an 84-month loan. New cars have always been for wealthy people, just most folks didn’t know it.
My wife has leased cars for longer than I’ve known her (almost 15 years) and she hasn’t seen that much of an increase in price. She’s had a CX-5 for her last 3 leases. She has a new one coming in this week. With $2500 down her payment is actually less than it was before. This is partially due to lowering her required mileage and her negotiating. But even with no money down and the higher mileage her payments would have only been $65 more per month. That doesn’t seem crazy to me. Of course it’s a lease and she always has a payment, but it still seems like a good deal. My 2018 3 will be paid off next year and I’m hoping to have it for a long time after that.
You’re not wrong. The marketplace is frustrating as hell. I ordered my Plan A car in September, knowing there was a 50/50 chance it would get built (Ford Maverick hybrid). Meanwhile, my Plan B cars are thin on the ground. My current ride now needs a major repair (torque converter @ 200k miles), but even getting a Plan B car is impossible unless I want to pay $5-10k market adjustment which I refuse to do. My budget is $40k max, and the pickings are slim…..
I’ve not had much success in being rich.
I tried buying a Kia Stinger GT Line back in January/February and it was not a pleasant experience. Coming in with several thousand on a down payment and yet somehow it only covered taxes and dealer fees. Lowballed on trade too (which I expected, but not by that much). Just dropped the idea entirely. So the last car I bought new I don’t even own anymore and that was my 2015 Nissan Frontier which I sold a year ago. I bought it for $25K and sold it for $13,500. Much better dealer experience buying that one, but the market was different then.
Nine year old Fit EX for which I paid $21K because it was an early one, there were limited numbers, and I needed and wanted it.
I don’t care that I paid ‘too much’, as it’s proven to be exactly what I wanted and has cost very little indeed for such a fun car.
I plan on keeping it running as long as possible. In today’s market, if that means repairs that might have otherwise sent it away, I’ll fix it. Plus, again, I love it, and there is nothing on the market I want to replace it.
Dealer: I can’t sell these expensive cars, it’s hurting my business.
Also Dealer: Ford Maverick = MSRP+$20k limited market value markup
Toyota GR Corolla = MSRP + $20k limited market value markup
etc, etc, etc.
Mr Pink: “You know what this is? It’s the worlds smallest violin, playing just for the Car Dealers.”
My solution is to keep what I got going, $2500 in repairs on a 9 year old Forester, that’s not even 6 months of payments on a new one so may as well do that. Sucks for people that get totaled or just have total failure. Regular neighborhoods going to be looking like Cuba, oh looks it’s the new Pontiac, those look sporty!
I have an older outback that is used for local errands and not much more. We’ve been planning on trading that in on something, but there are no somethings we want right now – and absolutely none we want bad enough to get a car loan at these rates.
I’ll be ordering the parts to rebuild the suspension since it looks like I’ll have it a little longer. I did the brakes, bearings and exhaust last year.
Awhile ago I predicted this to a degree. The Big Three were losing money on the lower end of the market no matter how good their products were. They never got the respect they deserved by media for compacts even though the Focus and Cruise were really good cars. Demand was shifting to SUV’s as they could provide more legroom in a compact package. Couple this with CAFE rules change that recognized that SUV’s can efficiently move more people, there was little incentive to build small vehicles that they lose money on.
As we march towards EV’s the automakers need to make huge investments and choices are made. I didn’t predict COVID (who did?) but the result was consistent, moving upmarket to increase profitability when production is constrained. My reasoning was that there would be a flood of Chinese makes hitting our shores glutting the low end of the market. Automakers plan decades out, so that is what I believe was the main reason to disinvest in small cars. Trump was widely derided for his “trade war” with China resulting in the 28% tariff on cars, yet that is the protection that is buying time for the US to retool for EV’s. There is no doubt this tariff will be negotiated away in the future, hopefully bringing an equitable deal for Americans. Once that happens out first cars will like be from a brand we can’t pronounce right.
Or they will be from Yangwang, which I am insufficiently mature to say with a straight face.
What idiot thought that rich people love buying expensive cars right off the lot?
‘Yes GM I do not want to order a new car, I want the pre rusted one that has been sitting in a parking lot that has been test driven by multiple poors and I want to pay a markup for it’.
The only time I ever consider buying a car off the lot is if said car is not in production anymore and I can get a new one off a lot.
I’m calling it: These expensive fuel hogs are going to get scrapped, especially all the used ones that people fail to make payments on and subsequently get repossessed.
These used “luxury” fuel hogs will flood the market and noone wants them because noone who wants them can afford to fill them up, let alone buy one. The People who can afford to buy them don’t want to buy them used nor do they want to buy a new one off a lot, they’ll custom order one.
I would agree if that’s what had happened with early Escalades and Hummers, but I don’t think it is
No, those are very much around. As summer toys now, but still around.
Back in 2019 I wanted to buy a new Toyota 4runner or Sequoia as a family vehicle and keep it for at least 10 years. Or more, if I could keep it rust free.
Then as the prices went up, I started looking at 2-3 year old used ones.
Finally I had to admit defeat after 2 years of waiting for the market to normalize and I bought a 2 year old Nissan Armada for about half a comparable used Sequoia’s price.
Even the smaller 4runner would’ve cost 10-15k more.
I’m a big fan of Toyota, but at this point I can’t afford or justify their prices anymore.
And to be honest, as good as they are, they’re all outdated at this point, Armada included. They’ve earned back their development and tooling costs years ago.
Maybe I’ll regret this and the Armada will be a disaster, we’ll see in a few years.
I went with a 2013 GX460 around the same time. For some reason the GX has not appreciated in the recent used car market the way the 4runner has. IMO its a way better vehicle than the 4runner for every reason except the rear window, and now they are even cheaper than 4runners on the used market
The GX was another candidate I would’ve loved to get, but I would’ve had to go a few years older. And very few of them for sale too in my area.
Unfortunately 2-3 extra years means a lot up here in the North, a body on frame vehicle is quite rusty already by year 6 – unless the owner undercoated it once or twice a year.
Not an issue with the GX. All are Japanenesse produced, and don’t suffer the rust issues that affects about 50% or sequoias and all 4runners. Driving a 2013 in PA
The last 3 cars I bought new I paid below dealer invoice. I have a feeling this is one of those stories that I will be telling my grandchildren while they roll their eyes and think about how full of shit grandpa is.
Reminds me of that Seinfeld episode, when they are stuck at the dealership. That old guy goes on about “buying a Hershey bar for a nickel!”
@DT: “Maximizing profit is any American company’s goal.” You say this as if it is the only obvious way to run a business, but historically, it’s not. This is to a significant degree a product of Harvard Business School over the last 40 or 50 years.
Ah,historically. Ironically enough the reason for this issue was two car companies: https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co. Harvard went with the flow.
Yeah people in this country seem to think the only thing that exists is short term profit thinking but I guess that is just late stage capitalism.
The answer is to not go public. You can do pretty much what you and your private investors will put up with.
Or, if public, do it the Berkshire way in a series of black box holding companies so the analysts don’t get to micromanage the companies.
> One could also just call it smart business.
Until it’s not when your pricey cars don’t sell, dealers hate you even more than usual, and customers hate dealers even more than that.
Last time I bought a new car was 2011. Still daily driving it. That car would be about $27k in today’s dollars. I’m not replacing it anytime soon by the looks of things. Unless I’m forced to.
Right now is a funny moment in the car market. EV’s are on the rise while ICE is declining. A lot of buyers are waiting to see what new EV’s are available since they don’t want another ICE car. Give it a few years to ramp EV production and cars will get back to normal.
Which leads me to the thought there’s no reason right now that nearly every ICE vehicle isn’t already hybridized.
Let me run my cars through the inflation calculator.
Year Model –> Original MSRP –> Inflation Adjusted –> Current Equivalent
1976 Jeep J10 V8 > $6,327 > $35,600 > $40,465 (Ram 1500 Tradesman)
1993 F250 Diesel > $21,500 > $44,100 > $67,345 (equivalent)
1994 Grand Cherokee V8 > $30,000 > $62,700 > $62,225 (equivalent)
2019 Nissan NV3500 > $45,000 > $53,900 > The V8 Express is in this range
2021 Mini Cooper Oxford > $19,300 > $22,600 > $25,800 (oxford seems to no longer exist)
So yeah it seems like if you want a truck you’re pretty well screwed.
Other segments seem to be keeping in line with inflation.
Maybe people are just buying too many trucks?
I’ve bought two new Chevys in the past three years for less than $45,000. Our Equinox and Malibu both have excellent fuel economy, great infotainment, trouble free and are comfortable and roomy. I’d say new cars are affordable, if that’s what you are looking for. But most people want to flex a bit and the automakers cater to those customers – especially because that’s where the profit lives.
I have an older “enthusiast” car (hooptie…ongoing project…) that I drive on occasion too. I’d hate to daily drive it though.
If I buy a late model car with 40,000 miles, it’s already worn out with more than 100,000 miles when I’m ready to sell. If I buy new, I’m driving a new car for the time I own it.
Also, I’ve never paid sticker price. There are always bargains!
Neither the Equinox or the Malibu sound like bargains at “under $45,000.”
Today I learned some people willingly buy new Malibus. I thought those always went to rental companies or got totaled and resold with tainted titles and different color parts to broke working people who need a ride and can’t afford anything else because america.
I’m proud to buy brand new, super well built, comfortable, trouble free cars built by America and our neighbors Canada and Mexico. Because America ! I’m a working, not broke, not poor but not rich American boomer who needs a ride that’s not rusty, 20 years old (except for my old Jaguar) and ready for the scrap heap. Because America ! I don’t apologize for it. Proud to be an American. Proud to buy American. And proud to be a boomer, because I’m not dead yet!
For both. And they are excellent cars.
Last summer we dove in on a brand new Volvo V60 Cross Country T5. It’s the family car, the “One Good Car” to offset my 18 year old BMW E46 and 23 year old Jeep XJ, and one we don’t have to worry about as I bought the factory extended warranty for it as we hope it stays with us for a long time. Expected future car purchase costs, ability to find a wagon, and it was the car we both really wanted sealed the deal. The experience was fine, no mark ups, but certainly no discounts either.
Staring down the barrel of a car purchase this summer. Due to a combination of factors, we’ll be car-payment-free and credit-card-payment-free by the end of next month. I was looking towards an Outback but the idea of a $700/month payment makes me sick. I’ll be lucky to get a 3+ year old Crosstrek.
How is this where we ended up?
I am kinda freaking out myself. I need a new/used car. 15 year old jeep is scaring me with the small problems cropping up. I get anxiety now looking at these car prices. 20K for even a 10 year old car with average miles is just bonkers.
Upgrade from a 15 year old jeep to a 25 year old jeep. You won’t regret it.
username checks out 😀