Auto market

[Ja Rhule]

I’m planning on getting a new car this winter and told my wife to go take a look at GMC.  She called me and said their lot is packed with used cars and they have issues getting new cars.  FYI, looks like there is a new car shortage as well so the prices on cars might blow up.

Edited May 22, 2021 by Ja Rhule

[LinvilleGorge]

Might? The used vehicle market has been absolutely stupid for most of the past year. If you have a diesel truck that runs, you can probably get $20k for it. A Jeep that runs? At least $10k. Same for a Toyota truck or 4-Runner. Running Land Cruiser? That's at least $15k.

[cookinbrak]

Look at camper prices.

[Squirrel]

Chip shortage hurting new cars being built. 

[LinvilleGorge]

2 hours ago, cookinbrak said:

Look at camper prices.

Campers, ATVs, boats you name it. It's ridiculous.

[PanthersATL]

The used car industry is crazy right now, in part because of the pandemic -- people who normally would use Uber/Lyft/Public Transport decided that it was safer to have their own vehicle rather than grab rides with strangers.

This put a strain on the used car market, causing available inventory to plummet. And now that travel is picking back up, the rental car agencies are finding themselves scrambling to buy new cars to rebuild their fleets.

Just like the insane housing prices right now, I don't know if I'd recommend buying a car "just because" vs "because you need one".

That said, if you do purchase a vehicle, stay away from the 7 and 8 year loans. Try to stick with the 4-5 year loans if you need to go down the loan path.  Those 8 year loans may make your monthly payments super-cheap, but it'll put you underwater in the vehicle equity for quite a long time.

[Ja Rhule]

Sounds like I won’t be getting a new car for another 1-2 years.  Apparently people pre-ordering cars and giving earnest deposits to be in line for a new vehicle.  poo is crazy.  

[PanthersATL]

If this gives you some idea about negotiation.

if you're doing a trade-in, the wholesale data that I've seen suggests that the spread between trade-in price and what the dealer will sell it at retail is $8k-10k for "newer" models, and anywhere from $3k-5k for "older" models. Much depends on condition of the car and overall demand for that particular model.  (example pick-up trucks aren't in high demand in the northeast, so they may be priced more to get off the lot than they are for profit)

Dealers will also be more apt to lowball the trade-in if it's a car that they'd have to take to auction to get rid of rather than being able to sell in their own internal dealer system. Auctions will cost the dealer a minimum price to sell it, so they need to keep their investment in the deal down.

There are positives about selling your car directly to CarMax or any other dealer that does a "guaranteed price" deal. You may end up getting more than you thought it was worth vs going through the hassle of selling it yourself via Craigslist or other method.

Example: 

• Had a 12-year old import with some miles on it - needed a new paint job, air conditioning didn't work, the electrical system needed some review (auto windows wasn't always happy; doors would lock automatically, whether you wanted them to or not). It was getting to be on its last legs, maintenance-wise. CarMax offered $5k for it. For us, that was a no-brainer to accept.
• Had a 14-year old SUV with about 175k miles. The sunroof leaked (ducktaped!) and the air conditioner didn't work. The thing ran great, but just had some quirks that needed some attention I couldn't give it. CarMax offered $250 (their minimum). Found someone to buy it for $1000 cash instead. Seemed like a good deal at the time.

 

[PanthersATL]

Always recommend keeping a car for at least 10 years. The longer you can go without having a car payment to make, the better off you'll be. (And even in those months when you have no official car payment, make that payment to yourself into some savings/investment place that you would utilize for the next car purchase)

Used is almost always going to be more cost-effective than new.

Some have suggested never buying the first year of a new model or redesign. Let them work out the kinks before you buy in.

Personally, I like buying the original extended car warranty from the dealer, but that may not be the best use of $$ vs dealing with individual repairs and maintenance. A lot depends on how long you intend to keep the vehicle.   If you're planning on keeping it for a long time, then an extended warranty may be worth the investment for peace of mind.

[PanthersATL]

If anyone has solid "here's how to buy a car/price negotiation" advice, would love to hear it.

[Squirrel]

12 hours ago, LinvilleGorge said:

Campers, ATVs, boats you name it. It's ridiculous.

Metals in short demand too. Good time to be collecting scrap metal. Regular truck load will get you $100 to $200 a load. 

[LinvilleGorge]

1 hour ago, PanthersATL said:

If anyone has solid "here's how to buy a car/price negotiation" advice, would love to hear it.

When the supply/demand is skewed to heavily favor the seller, you're not in a strong place to negotiate. If you're trying to shop for a deal, you're gonna have to wait.

[cookinbrak]

14 hours ago, LinvilleGorge said:

Campers, ATVs, boats you name it. It's ridiculous.

I got my dumpy little pop up for $500 right after Thanksgiving just before Covid became a thing. And a canoe with a broken seat for a hundred. Still less than a grand in the 2, I could sell the set for $3,000 with no problem. Not gonna.

 

[LinvilleGorge]

9 minutes ago, cookinbrak said:

I got my dumpy little pop up for $500 right after Thanksgiving just before Covid became a thing. And a canoe with a broken seat for a hundred. Still less than a grand in the 2, I could sell the set for $3,000 with no problem. Not gonna.

 

I bought my Jayco Baja ZX about a year ago for $5k. The only one I'm seeing on the market right now is several years older and is almost $9k.