Oh, Carmax...

[Captain]

Would you rather make 5% margin or 15% margin even though you sell half as much?

But manufacturers set the MSRP, so no matter what you pay, or what the dealer charges, the price the Manufacturers charge is the price they get. If the manufacturers want 5% or 25% they just charge more. Just look at what Ford did to almost every vehicle they make… they raised prices by thousands.

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[jsus]

No one said there were rebates widely available on any car currently, but that’s the point. They’re going to manage inventory in the future so they don’t have to put so much cash on the hood to sell the cars.

It is what it is. MSRP will be the new normal for most cars, I would think. Certainly the days when you could get $5-10k off sticker on models is certainly over, I would think.

Manufacturers want to meet demand, but the excess supply we were all used to is a thing of the past.

Yep. Incentives are being withered away or retired altogether.

At the end of last year, one could get up to $1800 off an Escape, another $1k for putting in an order and waiting for it.

Interest rates were 0% 36 mo, 0.9% 48, 1.9% 60, etc.

At the same time, 2021 Escapes could be had at 0% for 60 months.

Now you’re lucky to get 2.9% for 60 months, the retail order bonus cash is reduced, and is likely to exclude hybrids once those order banks reopen (like they did by excluding Maverick Hybrid from the promo rates).

Meanwhile, MSRP continues to climb.

Not sure when it’s going to end but this isn’t sustainable much longer.

 

[Maverstang]

That makes no sense for a car manufacturer. They set the MSRP, so keeping inventory low only helps the dealer make more money. Manufacturers make money on volume sold, not inventory.

There are many costs manufacturers bear for selling through a dealership. Floor plan costs and building subsidies are some of the big ones.

Jim Farley says it costs Ford $2-$3k per car to sell through a dealer, which is something he would like to eliminate through direct online sales.

In his new model, existing dealers would get a delivery prep fee, then make most of their money on warranty and service. The dealer benefits by saving on sales staff, balloons and checked sports coats…

 

[ClemsonU88]

That's not true. They receive all the rebates from the manufacturer and they have hold back if they sell the car in a timely fashion vs sitting on the lot for months. Plus the get kickbacks from the banks they use to finance most of the customers.

The kickbacks & rebates (which are dwindling) are similar to oil changes & such. They’re extraneous and not guaranteed. If I pay cash, no kickback from a lender. If I change my own oil, no money for the dealership. Hold back will be a thing of the past if demand continues to exceed supply.

My main point was that they don’t make a lot of money on the car itself. They’ve come up with other revenue streams.

 

[Droid82]

The kickbacks & rebates (which are dwindling) are similar to oil changes & such. They’re extraneous and not guaranteed. If I pay cash, no kickback from a lender. If I change my own oil, no money for the dealership. Hold back will be a thing of the past if demand continues to exceed supply.

My main point was that they don’t make a lot of money on the car itself. They’ve come up with other revenue streams.

I realize that was the old system but that's what is was before covid hit.

 

[SR-71]

CNBC reports today that Carmax did not meet Q2 earnings expectations. The stock is down 23.3% today (insert crocodile tears here).

Guess they won't be offering up $10K over MSRP on Mavericks anymore. Maybe that will give the rest of us a fair chance to buy one at/near MSRP ordered through an actual Ford dealership.

 

[Bmr4mav]

You act like Carmax didn’t pay handsomely for both of those Mavs. Blame the used Maverick market.

 

[MLowe05]

CNBC reports today that Carmax did not meet Q2 earnings expectations. The stock is down 23.3% today (insert crocodile tears here).

Guess they won't be offering up $10K over MSRP on Mavericks anymore. Maybe that will give the rest of us a fair chance to buy one at/near MSRP ordered through an actual Ford dealership.

You think they’re going to drop the prices on the Mavericks now because of this report? LOL

Let me know how that works out for you.

 

[JsnMrd]

How much can I get now for XLT?

 

[SR-71]

Carmax has greedily supported the inflation bubble for vehicles, and I for one am glad that they are now paying a huge price for it.

Y'all can flame me if you want, but I think it's way past time for our country to make a big reduction in inflation, and greed is not a sustainable long-term strategy.

I think by the time most of our Maverick's ordered by MTC members are delivered, MSRP will be considered a win-win for both customers and dealerships.

 

[SLINGSHOT]

SR71 said, "Y'all can flame me if you want, but I think it's way past time for our country to make a big reduction in inflation, and greed is not a sustainable long-term strategy."

Inflation and greed have been with us since the beginning of time. Good Luck.

 

[New2AZ]

Carmax has greedily supported the inflation bubble for vehicles, and I for one am glad that they are now paying a huge price for it.

Y'all can flame me if you want, but I think it's way past time for our country to make a big reduction in inflation, and greed is not a sustainable long-term strategy.

I think by the time most of our Maverick's ordered by MTC members are delivered, MSRP will be considered a win-win for both customers and dealerships.

I agree with you that something should be done about the inflation issue, but this extends way beyond just cars. We're in for a world of hurt for a while. Hang tight if you can.

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