Future State of Buying Cars

[jtpc2021]

Found this video highlights what we are seeing and will probably see moving forward:

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[atomguy245]

Customers will tolerate this as long as the vehicle has a perceived value for the price being asked. We talked about this many times here about how the Maverick seems like a great value at MSRP. That won't be the case with other brands or models. If pricing seems out of whack, and then the dealers also try to go over MSRP, eventually the consumers will just walk away.

 

[pxpaulx]

Customers will tolerate this as long as the vehicle has a perceived value for the price being asked. We talked about this many times here about how the Maverick seems like a great value at MSRP. That won't be the case with other brands or models. If pricing seems out of whack, and then the dealers also try to go over MSRP, eventually the consumers will just walk away.

That is exactly why the Maverick could do exceedingly well - but that requires that dealers sell at MSRP, which we already know isn't the case outside of most of the retail ordered trucks.

The only reason that market adjustments work is that people are getting crazy prices on their trades, or they are in a position where a vehicle is a need (for work, current vehicle is end of life, etc). Those buyers only make up a small amount of the buying population - most buyers are ok to wait for the right time/deal, which for the most part isn't out there currently.

 

[atomguy245]

That is exactly why the Maverick could do exceedingly well - but that requires that dealers sell at MSRP, which we already know isn't the case outside of most of the retail ordered trucks.

The only reason that market adjustments work is that people are getting crazy prices on their trades, or they are in a position where a vehicle is a need (for work, current vehicle is end of life, etc). Those buyers only make up a small amount of the buying population - most buyers are ok to wait for the right time/deal, which for the most part isn't out there currently.

This build to order crap only works if every automaker does it. If Ford is building to order and it takes 6-12 weeks, but a buyer can go buy from a large selection of Hyundai's today, a lot of buyers will opt for the immediate purchase.

 

[jbpoole]

This build to order crap only works if every automaker does it. If Ford is building to order and it takes 6-12 weeks, but a buyer can go buy from a large selection of Hyundai's today, a lot of buyers will opt for the immediate purchase.

Part of the:

Gotta have it! Gotta have it NOW!!!

mentality.

 

[Shay]

Until the next economic downturn, then you will see inventory levels go up to bring more buyers into the dealerships, and compete downscale again. It's all cyclical.

 

[FriscoTXJoe]

Considering the buying audience for Nissan, Chrysler and VW having a larger percentage of financially challenged people in the wrong bind of buying a new car, I don't see those MFG's giving up that sales model. The 2 parties need each other.

 

[zakstang]

Arctic cat started doing this build after order stuff a few years ago for their snowmobiles...according to my dealer ford definitely wants to go this route in the future for all vehicles....so we will see....

 

[MarkG]

Part of the:

Gotta have it! Gotta have it NOW!!!

mentality.

There are many reasons that people need a vehicle and are unable to wait 6+ months for it. My current vehicle has 180k miles on it and as long as it is able to get me to and from work I am ok. If the transmission goes out or some other major mechanical issue makes the car undriveable I am going to have problem.

There have been a couple of threads here where Mavericks were totaled in an accident. I doubt those owners are able to replace their vehicles with another Maverick even if they have cash in hand unless they were able to find one on a dealers lot for $5000 or more dealer markup.

 

[jbpoole]

There are many reasons that people need a vehicle and are unable to wait 6+ months for it. My current vehicle has 180k miles on it and as long as it is able to get me to and from work I am ok. If the transmission goes out or some other major mechanical issue makes the car undriveable I am going to have problem.

There have been a couple of threads here where Mavericks were totaled in an accident. I doubt those owners are able to replace their vehicles with another Maverick even if they have cash in hand unless they were able to find one on a dealers lot for $5000 or more dealer markup.

Your points are certainly valid. Imagine having your brand new Maverick totaled and having to wait almost a year for a replacement, or having to pay maybe $5k over if you could actually find one.

 

[JennyJoannSuebeeMcNash]

Before discovering the Maverick, I'd been considering a few different models of cars, most notably the new Corolla Cross, VW Tiguan, and the Kia Soul or Seltos. Bored with Honda so I wasn't considering any further purchases unless they suddenly decide to bring back the Element. Most of the Toyota dealerships in the area are marking up the Crosses by several thousands of dollars. Not playing that game at ANY dealership. I'd just as soon drive my Honda until it's ready to be put out to pasture. While I was told 12-16 weeks for a Maverick, I don't mind waiting longer for it if I have to. My only worry (and I'm sure I'm not alone with this concern) is that the trade value goes down on my Honda in the interim. Don't want to be stuck with a huge monthly payment.

 

[JASmith]

Yup, on another forum people were saying I was a conspiracy theorist and full of for saying that manufacturers are actually LOVING the COVID induced problems that push them into a low production high profit margin business model.

Apple and others have proven it ages ago that low production/high profit margin is much easier, less risky, and very profitable compared to high production/low profit margin sales model. Heck, we saw this multiple times now in Asia where the big manufacturers were caught colluding with one another to agree to reduce production and increase profit margins so that they all benefit (proof came out that big wigs from the major companies of LCD manufacturers met up in a Singapore hotel and they were convicted and fined heavily). So while I don't think that the big manufacturers are necessarily colluding in Singapore hotels, I think they are all quite happy with the status quo and so aren't providing any political pressure to fix the current state and open back up fully and if anything on the down-low probably the opposite.

For example, look at the personal fortunes of fortune-500 board members and CEOs 2010-2019 and 2020-2021. While the rich were getting richer every year before, it wasn't NEARLY as rapid an increase as post 2020.

Elon Musk's wealth increased from March of the pandemic to today by 540%. Bezos has also made a fortune off the pandemic, with an increase of $86 billion since 2020, with Forbes stating he is the first person in history with a personal wealth in excess of $200 billion. Google's founders Larry Page and Sergey Brin are up $83 billion combined.

Not only are the richest getting richer, but there's also a ton more billionaires as money is rapidly funneled upwards, with 493 billionaires created since 2020, far more than any year before, and it also includes those in the pharma industry such as Timothy Springer, Noubar Afeyan, Robert Langer, and August Troendle.

tl;dr: As long as the current status quo is proving WAY more profitable to the guys on top, and the plebs aren't marching with pitchforks and torches for a return to BAU, expect more of the same for 2022.

 

[pxpaulx]

There are many reasons that people need a vehicle and are unable to wait 6+ months for it. My current vehicle has 180k miles on it and as long as it is able to get me to and from work I am ok. If the transmission goes out or some other major mechanical issue makes the car undriveable I am going to have problem.

There have been a couple of threads here where Mavericks were totaled in an accident. I doubt those owners are able to replace their vehicles with another Maverick even if they have cash in hand unless they were able to find one on a dealers lot for $5000 or more dealer markup.

I think your statement requires a pretty big caveat. Most of the time, someone driving a vehicle on its last leg and with 180K miles on it, would replace that vehicle with a well used vehicle with 80-100K miles on it. The segment of buyers that buy new and drive a vehicle to the ground is very limited - most fall somewhere in between. The fact that this time you've happened upon a brand new model, where there is no used inventory, and that also happens to be competitively priced against even used vehicles (given the current buying/selling climate), is really a unicorn scenario.

Would you be looking at a $15-20K low miles 2011 Ranger if the Maverick weren't available with 70K miles, or perhaps a 2015 F-150 or Tacoma priced above $20K? The market is just off, but that isn't going to change anytime soon either.

 

[Arukoru]

"I just want the process to be more efficient"

> gets mad at the more efficient process

Also I love getting upset at market forces. Hey guess what, there's good reasons used and new vehicles are going for insane prices. When used vehicles finally come down in price (and they will) then you will naturally see new car prices follow it as they are forced to stay competitive. OR maybe new cars are forever changed because of the new sales models, you'll still have used cars as an alternative and even better there will be a giant market opening for companies willing to take advantage.

The suggestion to stop buying cars is hilariously laughable for a variety of reasons and it just makes you sound like an out of touch lunatic. There's a lot of people out there with hour long driving commutes. I get that this is a little tongue and cheek but pretty crap analysis if you ask me.

I'm not even some capitalist worshiper or anything, this is just how things work and have always worked. Big world events causing market instability have led to a new way of doing things, companies are literally forced to find efficiencies or close (speaking of which how is chrysler still open for business).

Last thing I'll say is about the "new" way of doing sales, ever company in the world sees the writing on the wall. If you don't have a convenient way of purchasing things online you will die eventually. I for one really like ordering what I want. It was actually the old way of doing things back when we had options. Could ordering be better than it is right now? heck yes! But don't forget what year it is, let everything recoil from shortages and massive transitions in the market before you jump to conclusions.

 

[MarkG]

Would you be looking at a $15-20K low miles 2011 Ranger if the Maverick weren't available with 70K miles, or perhaps a 2015 F-150 or Tacoma priced above $20K? The market is just off, but that isn't going to change anytime soon either.

Absolutely not. My current vehicle was purchased new in 2005 and I was not even considering purchasing used this time. The options that I was considering before choosing the Maverick was the 22 Frontier or the Black Diamond full size Bronco. The Maverick was an easy decision and it fit my needs perfectly.

Your $15 to 20k number seems to suggest that I can only afford an unoptioned XL. My build is in my signature line and is far from that.

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