@increasingmyfico wrote:
@RobynJ wrote:If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
You are correct with cars lower milage but I can get a decent car for 7k-10k all day long in my area. This is however 150k mile car but if its clean and makes it a year with no problems you can recoup your cost of the car and have it for a year and be in a better position to purchase a newer car at normal prices in my opinion.
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@RobynJ wrote:
@increasingmyfico wrote:
@RobynJ wrote:If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
You are correct with cars lower milage but I can get a decent car for 7k-10k all day long in my area. This is however 150k mile car but if its clean and makes it a year with no problems you can recoup your cost of the car and have it for a year and be in a better position to purchase a newer car at normal prices in my opinion.
Or you can do like I did. I bought a Toyota Tacoma. Free maintenance for two years and sky high resale even before the shortage. I'll get most of my money back and not have to worry about repairs on a 150k mile car that's been used up. There are several vehicles with really good resale that this can be done with. Used car purchases don't make sense right now.
@disdreamin wrote:
@increasingmyfico wrote:
@RobynJ wrote:If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.
Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.
Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.
I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.
@RobynJ wrote:
@disdreamin wrote:
@increasingmyfico wrote:
@RobynJ wrote:If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.
Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.
Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.
I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.
I agree no one knows for sure. However, I am basing my answer on industry knowledge. I look at trend reports every week. I know what the mfgs are saying. They do not want to go back. They are happy. So are the dealers. Even when Covid goes away they will control supply. That's why Ford is conditioning people to order. The only variable I see is the impact of the economy and rising rates. So far demand is still outpacing even with that. How that changes as rates keep trickling up. Thats the question.
With the current hikes in interest rates. The auto market will eventually correct itself. I wouldn't buy a used vehicle in the current market. The mark up is higher than on the new vehicles IME.
Also do not pay over MSRP, keep shopping. The Honda HRV isn't on the list of high demand vehicles. GF ordered two hybrid Ford Mavericks from two different dealerships a few weeks ago. These vehicles are in extreme demand! She called at least 11dealerships. You would be suprised how much the fees and prices vary from one dealer to another. She was able to find two dealerships that charged MSRP plus DOC fees.
Don't accept any add-on fees. Get the info on the DOC fee up front. Some of those DOC fees are outrageous! I had her walk on several of those overpriced fees as well.
The only way prices on this stuff is going to come down. Is if we as consumers stop overpaying. Same goes for the housing market.
Patience and more patience will get you the best deal.
@BMW_Jess wrote:
@increasingmyfico wrote:
@RobynJ wrote:
@disdreamin wrote:
@increasingmyfico wrote:
@RobynJ wrote:If you can, buy a cheap used car for a year. The prices are going to crash so for 2 reasons. 1- The rate increases so less people are going to want to buy (supply and demand) and 2- the chip shortage will be over soon as Covid is on its last leg. Once the chips are replenished the deals will be back. So buy a 10k car with higher milage to beat around for a year and then purchase. This is of course if you are not ego centric and can't be seen in an older model.
Not quite... cheap cars have also exploded in value. Used car price increases have actually been more extreme than new cars. Paying slightly over msrp will shake out as the better way to go when values start to slide. There isn't likely to be a crash though. Supply is still tight. Plenty of cars just got wipe out (new and used) by Hurricane Ian. Also at this point I don't see the manufacturers ever going to back to producing as many as they were before. They will likely control supply to keep things close to where they are now. They aren't having to spend hardly any money on incentives. This has been a lesson for them and they took good notes.
I agree with @increasingmyfico - used car prices have been hugely impacted over the past couple years, to the point where buying new has sometimes been less expensive than purchasing a ~2-3 year old used car. Out of curiousity, I just checked a car I purchased last summer and kbb shows a trade-in value of slightly more than I paid new, private party sale is $2-3k over what I paid.
Personally, I am not convinced that cars are going to drop significantly in price any time soon. For one thing, some manufacturers have been shipping only decked-out vehicles that have higher margins and nearly the same chip demand. I wonder how much of that has changed for good. It's very challenging (read as: nearly impossible) to find a base/near-base trim of some models, and has been for some time. I've had my eye open to trade in the vehicle I mentioned above, but since it's a car for my kid I wanted a stripped-down vehicle, not something with $8-10k+ tied up in a higher trim level.
Lastly, while the pandemic may deemed be over here, my understanding is that China is still a long ways from making that determination. An article over the summer suggests new chip orders are still backed up by an average of over a year. Not sure that bodes well for a quick turnaround/recovery.
I agree to disagree, the truth is nobody knows for sure as it is all speculation but we can review this in lets say 12 months and discuss who was correct. I can say I am wrong if it ends up that way, humbleness at it's finest.
I agree no one knows for sure. However, I am basing my answer on industry knowledge. I look at trend reports every week. I know what the mfgs are saying. They do not want to go back. They are happy. So are the dealers. Even when Covid goes away they will control supply. That's why Ford is conditioning people to order. The only variable I see is the impact of the economy and rising rates. So far demand is still outpacing even with that. How that changes as rates keep trickling up. Thats the question.
The above line does not reflect my own industry knowledge firsthand. If they were happy, we wouldn't be producing record numbers of cars, here at my manufacturer. The only thing slowing down the market is the chip shortage, which only makes sense due to the loss of one of the two suppliers globally. Add in changing their production model from home electronics, back to automotive electornics; before adding in the influx of new clientele from the first supplier - and it's made a mess for us in the automotive manufacturing industry. Graciously, we have not had any major issues, other than a brief Covid related shutdown from our US supply chain.
Not sure who you are with. Sounds like one of the smaller niche brands. Toyota's Bob Carter has said he does not want over a 45 day supply of inventory again. Ford is pushing the order model to cut down on cars built to sit in inventory. They do not want to go back to paying customers to buy cars. They are making so much more cash. The industry is forever changed.
