Will Vehicle Prices Ever Decrease?

[Molon Labe]

I have several industry connected buddies that say that "pricing" will continue through Q3 in 2022...at least...that is their projections. These are sales managers and GMs at larger dealerships.
BUT...dealer pricing will drop quickly...when it happens.
The general consensus amongst them is hold gross as long as you can...then spin units when inventory starts coming back.
The only wrench to that plan is money supply and how much interest rates will be jumped by the fed this year...

The problem is the big three lost over half a million units of production almost every quarter last year...
Straight up supply and demand. Less inventory available...steady demand...demand didnt increase...people just were willing to pay more because...merica! want my toy now!

One of the guys said that it was by far and away their most profitable year as a dealership and they were down 10-15% in units. And they would like to hold gross for as long as they can...but once supply is back they will cut their prices to move units.

Another guy mentioned that he is worried about how the big three will manage inventory moving forward. The Tesla model seems to be working for them...and that is sort of how 2021 went...and if they can presell as much as they did last year...they would prefer that. He just hopes the brand he sells doesnt do something crazy like that.

 

[Fatcamp]

I'm curious to see what happens to campers this spring. After an insane 18 months I believe the market is absolutely saturated and a whole lot of new owners are training how much work and how expensive it is.

A year ago supply was low and prices were high. Not sure about prices but every lot around here is overflowing. Gonna be interesting.

 

[Graybush]

I am a sales manager at a large dealership that sells a Japanese product. A year ago our manufacturer offered us dealer cash on most of the vehicles we sold. Today we receive no incentive money. We currently are enjoying record profits selling fewer units. Manufacturers will never pump out so many units that they have to spend money on incentives again. Consumers will have to order vehicles in the not so distant future- showrooms will have sample vehicles. Used cars will still be a big profit center for dealers, as well as service. We’ll never have a 60 day supply of new cars and trucks on the ground again.

 

[GSPHUNTER]

I'm curious to see what happens to campers this spring. After an insane 18 months I believe the market is absolutely saturated and a whole lot of new owners are training how much work and how expensive it is.

A year ago supply was low and prices were high. Not sure about prices but every lot around here is overflowing. Gonna be interesting.

My friend works for one of the biggest RV dealers in the Los Angeles are and, while supply is low he is making more money than he ever has. The lot is at about 50% normal and they are looking for used RV's and paying premium $$$ for them and turning them for Nice profits. He offered me 5K over what I paid for mine three years ago.

 

[Fatcamp]

My friend works for one of the biggest RV dealers in the Los Angeles are and, while supply is low he is making more money than he ever has. The lot is at about 50% normal and they are looking for used RV's and paying premium $$$ for them and turning them for Nice profits. He offered me 5K over what I paid for mine three years ago.

That was last year here. Now lots are packed and I don't know of anyone who wants one that doesn't have one.

The F250 groups I belong to on Facebook are having a great time with window stickers. Ford dealers are actually putting "Market adjustment" costs on their window stickers. 10, 20, 30,000 $'s. There is a limited number of people who are that dumb, and they tend not to have good outcomes.

All I know for sure is I'm darn glad I bought a newer truck last spring.

 

[Mosby]

I had to buy my wife a new car recently. Her car has a 147,000 miles on it and I didn't want to keep putting money in it or have it leave her stranded. I shopped for a new car in 5 different states, contacted 15 different dealers from 4 different manufacturers/models. Did I get a great deal? No, but it wasn't horrible relatively speaking. I did better than I thought I would. I will be married 35 years this year. There are times you make money. There are times you save money and then there are times you do what you have to do, to make your wife happy. This was one of those times.

 

[Mosby]

I am a sales manager at a large dealership that sells a Japanese product. A year ago our manufacturer offered us dealer cash on most of the vehicles we sold. Today we receive no incentive money. We currently are enjoying record profits selling fewer units. Manufacturers will never pump out so many units that they have to spend money on incentives again. Consumers will have to order vehicles in the not so distant future- showrooms will have sample vehicles. Used cars will still be a big profit center for dealers, as well as service. We’ll never have a 60 day supply of new cars and trucks on the ground again.

I agree. My impression is dealerships like the way it is. Banks don't. They liked financing those large dealer inventories. A sales manager I spoke with said they got rid of commission sales and he is making more money without the month to month pressure. Fewer sales staff needed too.

 

[Dos Perros]

Care to elaborate? Good time for new (if you can find them) bad time for used, I assume??

That’s the analysis I saw from an in industry analyst. I’m sure you could do some Googling and find articles.

I will say, that’s probably predicated on a dealer not ripping you, selling way above MSRP today.

 

[npm352]

I believe they will come back down. Demand is increasing or stagnating while supply is low. They'll decrease but not to where they were with this inflation.

 

[Randle]

What is the active driver monitoring thing?

Right now you have lane keep, lane departure, etc next will be active driver monitoring (camera watching drivers) for distractions, then full autonomous car( No driver input needed. Prices will just keep going up

 

[colersu22]

I'm curious to see what happens to campers this spring. After an insane 18 months I believe the market is absolutely saturated and a whole lot of new owners are training how much work and how expensive it is.

A year ago supply was low and prices were high. Not sure about prices but every lot around here is overflowing. Gonna be interesting.

I’m hoping the prices come down since I was hoping to pick one up this year , I noticed too that lots are full around my area as well. Hopefully with all the inventory and people realizing campers are not for them I can pick one up for a good deal.

 

[treillw]

If you trust the reports now coming out, the chip shortage will last into 2nd quarter of 22. One of the big factor in prices is the limited number of vehicles coming off the assembly lines due in a large part to chip shortage. As for used vehicles the prices are up due to lack of new vehicles so, until lines start picking up production prices will remain high. As to whether prices will come down, we will never see pre shortage prices again but yes they will come down, eventually. My brother in law put in an order for a new Ford pickup, 13 month wait. I think he's down to 11 months now.

That's worse than a suppressor.

 

[treillw]

I have several industry connected buddies that say that "pricing" will continue through Q3 in 2022...at least...that is their projections. These are sales managers and GMs at larger dealerships.
BUT...dealer pricing will drop quickly...when it happens.
The general consensus amongst them is hold gross as long as you can...then spin units when inventory starts coming back.
The only wrench to that plan is money supply and how much interest rates will be jumped by the fed this year...

The problem is the big three lost over half a million units of production almost every quarter last year...
Straight up supply and demand. Less inventory available...steady demand...demand didnt increase...people just were willing to pay more because...merica! want my toy now!

One of the guys said that it was by far and away their most profitable year as a dealership and they were down 10-15% in units. And they would like to hold gross for as long as they can...but once supply is back they will cut their prices to move units.

Another guy mentioned that he is worried about how the big three will manage inventory moving forward. The Tesla model seems to be working for them...and that is sort of how 2021 went...and if they can presell as much as they did last year...they would prefer that. He just hopes the brand he sells doesnt do something crazy like that.

What do you mean by hold gross? Sell at or above MSRP?

 

[treillw]

I am a sales manager at a large dealership that sells a Japanese product. A year ago our manufacturer offered us dealer cash on most of the vehicles we sold. Today we receive no incentive money. We currently are enjoying record profits selling fewer units. Manufacturers will never pump out so many units that they have to spend money on incentives again. Consumers will have to order vehicles in the not so distant future- showrooms will have sample vehicles. Used cars will still be a big profit center for dealers, as well as service. We’ll never have a 60 day supply of new cars and trucks on the ground again.

Would you recommend buying a new vehicle now, or waiting?

 

[stoopiddumbman]

Newer vehicles are outrageously priced for what you get and not particularly reliable.

 

[treillw]

Right now you have lane keep, lane departure, etc next will be active driver monitoring (camera watching drivers) for distractions, then full autonomous car( No driver input needed. Prices will just keep going up

Cameras watching driver's sounds like a lawyer's playground.

Gonna need a big roll of electrical tape...

 

[camping1601]

I looked to trade my truck last week, but ended up bailing on the idea. I was gonna have to order and wait while surrendering my truck at the day of ordering. Although I have another vehicle, I'm not rolling the dice on time frame of delivery.

 

[Graybush]

If I needed a new vehicle I’d try to buy it now. Expect to pay MSRP plus some sort of addendum pricing. If you have a trade it will never be worth more than it is right now, and that will help offset the higher price on the new vehicle. Interest rates are still low, but that can’t last indefinitely. My 17 Tacoma is worth more now than when I purchased it…but there is no 60 months @ 0% on a new one available so I’ll be driving my 17 for a long time, God willing and the River don’t rise.

 

[Breddoch]

I don’t think MSRP on new vehicles will go down. I have passively been looking at Tahoes and suburbans. The dealers here are getting $10k over sticker and tell me they are fetching even more at auction. I believe if I were serious about a new vehicle I would order it, pay sticker and wait 6 months. With inflation and manufacturers seeing what people will pay, I wouldn’t expect to see a decrease in sticker prices.

I also agree with the folks that mentioned we are headed towards made when ordered cars and 40 year mortgages.

 

[gbflyer]

The shit I buy for vehicles isn’t going up. I keep it in the 10 year old at least category. There’s some good ones out there, although they usually aren’t advertised. Plus I can kinda work on them still.