I saw an article recently saying that dealerships and car makers want to keep inventories low because they like the post-covid margins they're experiencing. When I paid 5k over msrp a few months ago the salesperson claimed they wanted more inventory because salespeople were unable to hit the volume goals they have. Not sure who to believe but I'm sure the truth lies somewhere in between.
Disclosure: I work for GM. Anything expressed here is solely my own opinion and experience.
I think each statement is true.
Context: for ages, OEMs (the factory) have had a belief that Americans will not wait to buy a car. There's also a bit of a prisoner's dilemma: if any automaker wanted to trim inventories, the customer could go to a competing automaker's lot and buy today. Since customers will not wait to buy a car, a dealership must have some quantity of vehicles that are acceptable to buy today.
Now customers are used to waiting and nothing really catastrophic happened to the dealer or the OEM. In fact profits went up substantially. If OEMs or dealers had worked together to limit inventory, that would be illegal market manipulation. (I'm sure someone may build a conspiracy theory out of this, but I do not believe any intentional market manipulation took place).
Dealerships hate carrying extra inventory because it costs money to finance the vehicles until they sell them.
However, there are also salesperson and dealership bonuses based on volume, so that individual salesperson is feeling the pinch. Kind of similar to how crazy home prices are right now (in many large cities) - the homebuyer is hurting, but the real estate agents aren't making a commensurate amount of extra money because the market is relatively inelastic.
In future American OEMs may move to a more European model where vehicles are built to specific customer order. This takes on the order of two months at the moment for many legacy reasons, but there is no need for it to actually take this long.
> Context: for ages, OEMs (the factory) have had a belief that Americans will not wait to buy a car.
On the contrary, we recently added a 3rd car, and it ended up being a $4000 used Toyota Camry. My first choice would have been a Corolla or civic but none were available at a reasonable price, condition and mileage. Due to the well known rise in used car prices.
It's in good enough condition and meets all the requirements for something that's comfortable, has cruise control and working AC, wasn't in bad shape, and can be repaired and maintained economically. Now I'm optimizing for dollars per km driven and although I could easily afford to take out a car loan for a new Model 3, or similar, I have absolutely no intention of doing so.
At the purchase price of this car and its highway mpg, and driving around 14,000 km per year, even at the current fuel prices (or if fuel goes to $6.85 USD a gallon) there is no way that its $/km is going to be anywhere near as high as the TCO of buying a new Prius or Ioniq nevermind a fully electric car.
I have simply opted out entirely from the concept of buying a dealership new car or late-model car and will continue to spend money on things that are reasonably adequate, and my financial outlay and overall level of stress are considerably lessened. No more worrying about if it collects a rock chip in its front plastic bumper, or a ding in a parking lot, no more paying comprehensive insurance, no more dealership haggling and waiting lists, no more inventory problems.
I'm all for frugality, but with a newer car you're getting vastly improved crash safety. Over the years crash safety ratings have gotten tougher and tougher. You can browse the IIHS crash rating history for the Camry (or any other car) and you can often observe that when the IIHS introduces a new test, cars often perform poorly on it (high likelihood of injury) initially, but get better later on. https://www.iihs.org/ratings/vehicle/Toyota/camry-4-door-sed.... This is it's own piece of mind.
I haven't found the safety data, but was very surprised when my new car was way cheaper to insure than my old one. I assume the insurance companies have the data.
This may not be safer as in better crash resilience, but safer as in you have a backup camera, and side sensors for changing lanes.
I wonder how much of the new car being cheaper to insure was the liability only portion of the insurance vs the comprehensive. How much of your risk is seen as so much greater by insurance companies as likely to be at fault in causing an accident in a ten year old car vs new.
Not entirely surprising - the biggest change in car technology over the past few years has been the inclusion of driver assistance features and liability is the most expensive component of auto insurance.
Most of the safety driver aids seem to paper over incompetency and the fact that people can't put their phones down while operating a deadly vehicle. Been driving for 20+ years and no accidents. I also mainly drive older vehicles without any such tech save for ABS. Stay focused on the task at hand and be responsible. If you cant do that, then surrender your drivers license and use an alternative transportation method.
I've anecdotally found that the improved safety features have led to near-crashes for me, simply by making the auto behave unexpectedly.
Most notably this happens when I'm driving down the freeway, and the car thinks something is in front of us that isn't and randomly slams on the breaks.
It has also happened when other negligent drivers have started merging into my lane (where I am), and the vehicle slams on the breaks, against my better judgement of slamming on the gas to avoid the collision because it would have been safer.
My daily driver is old and has no security features, and modern rentals are a nightmare for exactly those reasons.
Also, what's with the newer cars randomly beeping at me to communicate instead of presenting an actual sentence of information? Almost all the time I have no idea why the safety features are engaging because they only communication is a beep of some kind, leaving me confused and taking my eyes off the road to look for some supporting message in the car's interface.
That is luck not skill. Humans are not good drives and never can be.
> Stay focused on the task at hand and be responsible.
That helps. It would help some more if you would also get updated training - safety engineers have discovered a lot of things over the years that few people know.
Luck is enough. The average road is about 2 accidents per million miles. https://www.dot.ny.gov/divisions/operating/osss/highway/acci... so if we assume the OP doesn't drive drunk he is isn't enough above average to claim skill based on the evidence we have.
More importantly, the OP should not claim skill even if he has some: that leads to complacency. If he claims luck he is more likely to admit he isn't perfect and thus pay attention to changes in what he best practice for driving. What he was taught in drivers training 20 years ago assuredly has some things that we now know were wrong, and it didn't even cover some things we now know is important.
I don't think bluGill is entirely wrong ( as indicated by the downvoting ), the average driver believes they're better than the average, which isn't possible. But, I'm sure, the average person is much better than then average _some_ of the time, and they're thinking about their best when they rank themselves -- I think this falls into the same reasoning as, 'we judge others based on their actions and we judge ourselves based on our intentions' -- intending to drive error free is likely much more common than actually driving error free
But, it also sounds like, some of the driver assist features aren't so good yet either ( reading many of the other comments in this thread )
> That is luck not skill. Humans are not good drives and never can be.
This is a stretch. The better argument is that the best human reflexes can't react to others' stupidity with the speed and precision modern safety mechanisms can.
I have a 2000 BMW 318ti beater car, the clear coat is peeling but mechanically fantastic. The crankshaft sensor was causing random misfires which I replaced. Otherwise all stock, it's fantastic and freeing. I can floor it and it doesn't go anywhere. upkeep is cheap, oil change when it asks me to. light compact car i've only done brakes once 6yrs ago and it looks new still... the only downside are the plastic parts which sometimes let water in. Those I'm replacing.
sorry my bad, let me try again, it doesn't go anywhere "unintended".
I've driven some cars that are psychopaths, while fun they're most unsuitable as a beater. Minimise risk/cost the whole way is the beater life!
High powered vehicles don't have a tendency to cause anything.
Driver input causes sudden acceleration. Having access to more power is not an inherently dangerous thing. Poor driving ability is a dangerous thing - though I agree that more power can compound that danger.
I drive a 480bhp 1800kg car. It takes active involvement from me in multiple steps to "take off" or 'suddenly' accelerate, and when it does so, the whole car is configured to _increase_ its stability as its speed increases.
That said, if I were to aggressively accelerate when the road conditions are in excess of what the stability aids (and my fallible human skillset) can counter - which from experience is a high bar for modern DSC (oil, ice) - then I would crash and power would be a contributory factor. But from experience I can say that a small front wheel drive car will have 'let go' far sooner under those same conditions.
High-powered cars, by virtue of their expense, tend to have more comprehensive and capable driver assistance features both tech and mech (you're not going to find a limited slip differential on a budget super mini car)
Under-powered cars have trouble effectively matching carriageway and motorway speed in the short slip roads that are common in the UK. A 1 litre, >80bhp car is fine for city/town and village driving. It is not an appropriate vehicle for motorway or NSL carriageway driving. Anything that has no ability to out-accelerate a HGV maintaining cruise speed to join a motorway has no business being on the motorway.
living my dream! I've been driving for 25yrs now? never got to accelerate out of an accident even once. would've been really cool lol what was the situation like? like people swerving into your path?
Nothing major - one was an inattentive driver in a parking lot headed my way and at least one more was avoiding a deer. If there's a pack of deer stopping can often be a bad idea as they're get spooked enough to run right in to your car and cause damage. It's happened to me twice.
Agreed. I'm firmly in the boat of "expensive things own you" so I avoid owning them. I do try to take care of what I have but don't obsess over things that can and do happen.
That said. I did get rid of a perfectly good 2002 Camry to buy a Mustang Mach e about 14 months ago. It was pure indulgence and I'm still smitten. I try to take care of it, but don't park across 2 spaces an extra 200 meters away while at the grocery.
When I removed comprehensive coverage, the lady from the insurance company audibly said "wow" before telling me my new yearly rate. It dropped quite a bit. Over 50% decrease IIRC.
In Australia I changed from comprehensive to third party property damage, fire and theft and my rate changed from $950 to $240/y. For a $5000 vehicle! (NB: first and third party medical insurance are covered by rego and Medicare).
More generally, it usually doesn't make sense to have insurance for anything where you could comfortably afford to pay for the bad thing out of pocket if it happened. For me that means 3rd party liability coverage, yes; comprehensive coverage, no.
As a brit where at least 3rd party insurance is a legal requirement,I consider that everyone should be fully comp. It's not just your car you're damaging, it's likely another car and potentially legal fees and loss of earnings.
Even if insurance went optional I'd still go fully comp, as the cost of a new car is not what I need if I'm already financially struggling due to injury
In the US, auto insurance policies are split into 3 buckets: collision, comprehensive and liability. Comprehensive kicks in for events which are “not collisions,” so tree falling on the car, theft, etc.
You are required to have liability and collision coverage in most states, but comprehensive is optional. People often drop it from their policies to save on the premium. I have tried doing that on one of our vehicles over the years but have barely realized any savings so I’ve ended up keeping it on the policy. Seems like others have fared better.
Indeed. I've been doing similar research myself and was surprised at how highway driving can disadvantage EVs. They'll never be as expensive per mile as an ICE vehicle but I found the fact I spend most of my commute at 80mph significantly decreased the savings.
I mean, driving at 80 vs 70 will also vastly decrease your ICE mileage
It definitely increases the drag, but after spending a week driving at 70 the difference in mileage was almost unnoticeable. It helps that I have a small, aerodynamic car that's geared high instead of a truck or blocky SUV.
"For light-duty vehicles, for example, every 5 mph you drive over 50 mph is like paying $0.18 more per gallon of gas (based on the price of gas at $2.63 per gallon)."
Even that is a simplification. Air resistance increases exponentially with speed, so the jump in resistance (reduction in efficiency) is much greater from 70-80 than from 50-60.
Also, gas is a lot more expensive now, so the additional $0.18/gal could easily be doubled or tripled at today's prices depending on where you live.
> It helps that I have a small, aerodynamic car that's geared high instead of a truck or blocky SUV.
According to consumer reports, even a very gas miserly Toyota Yaris loses 4mpg going from 65-75mph. It's probably double the efficiency loss if you go to 80mph. Can't cheat physics.
I find that very hard to believe, given that drag increases with the third power of velocity. By almost unnoticeable do you mean that you didn't notice it, or did you robustly measure and compare?
It's entirely possible, even likely, the lack of difference is due to age-related efficiency losses at lower speeds rather than not losing efficiency between 70 and 80. There's also the fact I'm running AC on max in very hot weather, which maximizes the loss due to AC and increases the amount I save by shortening the trip and thus reducing the amount of time the AC is running.
My overall trip efficiency maxing out at 70 was 31mpg, and 80 was 27.9mpg.
I applaud you for not taking the bait on the Model 3, which is overrated, but I cannot fathom purchasing an appliance car like a Camry. You can’t possibly enjoy driving it. Why not at least a Honda?
Perhaps because nearly all car trips are those in which they are mostly acting as an appliance as central to (presuming here) American life as AC is in most of the country.
Personally, I’ve never driven a Camry and thought, “this is awful”, but rather “this is totally fine and wow, great mileage!” In a similar vein, its status as an abundant vehicle with many parts out there and being generally reliable are all similar and useful things I’d consider before buying a new washing machine or whatever.
They're even reliable in the way they break down. Parts are cheap worldwide, every mechanic ever can work with them, and the service life of components seems to be staggered such that you only get a couple of issues a year even on a 20 year old model like mine. If you think all is lost at 500,000km, just buy a new engine for like $1000 and sail away in your little Ship of Theseus that refuses to die. The purchase price is so low and the maintenance so consistent it's like you're renting it.
If you are struggling to build your self-worth through a car or think you need to spend $50k to get that, try fixing an old Camry yourself for dirt cheap, and then see how you feel. No need to fight for right-to-repair laws either, just buy a part anywhere and clean or replace it according to the manual, which is just a 1000 page PDF on the internet of every possible repair. (Although my next car will be electric, because of climate change. Sorry Camry.)
I really hope an electric car model will take up the mantle for reliability and repair ability. Toyota is lagging hard in the EV space. Maybe those Chevy Bolts will last a while? Or the Kia EVs? Probably the F150s, but I'd prefer a compact.
I have more hope for EV repairability than for e.g. iPhones. Notice that right-to-repair laws followed tractor owners, not iPhone owners. The farmers felt the pain first. It's simply more important for a vehicle, where replacing is not nearly as cheap.
You can already buy random EV parts online. As automakers make more models and source more common parts for their cars to do this competitively, this aftermarket gets better and more useful. A fairly promising thing is the apparent popularity of EV conversions and home-brew EVs, so perhaps there will be some competition for e.g supplying full-on computer control systems with some serious capabilities. There are also more modifications people will conceivably want to do on their cars. I know someone whose petrol ute has a fridge under the canopy, powered by a solar panel on the roof and an extra battery. Nobody is out there drilling a hole in their iPhone to add a headphone jack, because it would be really bad, but you can do all sorts to cars without ruining the whole experience. The complexity and variability of what people want their cars to do leads to modifications and that demand will have to be met somehow. It's also the kind of strange demand that cannot be met by the big automakers alone.
As for reliability, I hope the market will continue to speak pretty loudly with their wallets on the importance of that. People care about it now, I have no reason to believe they'll stop.
That would probably be Tesla? I suppose it depends on your definition of repair-ability. Telsa has a high degree of parts compatibility and seems able to keep even the older 2012 era Model S repaired.
There are a lot of high mileage Teslas out there. Most of Tesla's negative reputation seems to be people complaining about fit and finish (paint, panel gaps). The actual mechanical reliability seems to be quite higher than a normal ICE car. However EVs are still pretty new so long term data is still being collected.
Teslas seem to have a reputation of being locked down and requiring first party repairs. As an example, Tesla charges extremely high fees for its repair documentation to shops.
Considering how many Teslas have been shipped, a postmarket community forming around the vehicles seems likely. I just don't know how successful it will be when the manufacturer is so hostile toward third party repairs and tinkering overall.
I don't doubt they are reliable cars, though. So are Apple computers and phones.
No, the data shows that Tesla vehicles generally have terrible reliability. A Toyota Prius hybrid is far more mechanically complex than any Tesla EV, yet the Prius is far more reliable on average.
I'm having a hard time navigating that site and getting any data out of it. Is it considered a reliable source of information? It seems to only have data for the first generation Model 3 from 2018. They also seems to count stuff like replacement of the 12v battery.
The writeups of high mileage Tesla's that I have read have not mentioned very many repairs - and that seems to be the general consensus on the owner's forums.
Note that software updates are also considered 'recalls' on Teslas now.
Consumer Reports has more recent data. Tesla is next to last. The potential for EV reliability is there, but Tesla has missed it with incompetent engineering and sloppy assembly.
My first car, in the early 00s mind you, was a 1989 Camry Wagon and boy did I sure love that thing. Great utilitarian car that could fit friends, got great gas mileage, and basically required no upkeep.
I now drive a 2000 4Runner that has actually gone up in value from when I bought it 12ish years ago. I’ve had two people in the last two years drive by randomly and ask if I was selling.
One of my all-time favorite Onion headlines: Toyota Recalls 1993 Camry Due To Fact That Owners Really Should Have Bought Something New By Now
I literally said it's a 3rd car, what makes you think one of my other two cars isn't something fast and fun, that runs on premium gas and eats through expensive Z rated tires? Its per km cost is considerably higher. Maybe I don't want to use it for like, buying groceries at Costco, and with two seats it's not very much good at all for picking up family members with luggage from the airport.
Our only car is a 10-year old 7-seater powered by a 1.4 liter turbocharged petrol engine (Opel Zafira Tourer). An entirely utilitarian choice, I'll buy something fun when the kids grow up.
What I have come to realize though is that most people couldn't drive quickly in corners if their life depended on it.
And that there is nothing more satisfying than watching a Tesla or Audi become a small dot in the rearview mirror on a highway onramp or a switchback road, when the emblem on your trunk says "1.4 EcoFlex" and your bumper sticker says "Baby on board".
Sure, you'll get passed when the road straightens out again, but both them and me know that I've won.
What, does buying a more expensive car give you access to a different set of traffic laws? My 106HP Yaris is more than capable of breaking the speed limit and coming off a stop fast enough to slam me back in the seat.
Theoretically, no. In practice there's definitely a different level of scrutiny applied to beat up old cars (fishing magnet), a brightly colored sportscar (revenue ticketing magnet) or a bland sedan or crossover (mostly gets ignored unless you're doing something crazy).
Go out and actually drive the cars in this class and they're pretty much all the same. Honda build great cars, but let's not pretend you hop in an everyday Civic and it'll blow your socks off. They are very pedestrian.
We bought a Mazda3 because my wife didn't like the sight-lines in the Civic. YMMV.
A very utilitarian view. People aren’t all beings of pure logic, though. Some people have fun in their cars and use them for purposes other than pure transportation.
They do indeed, but that doesn't mean it has to be fun for everyone.
Some people enjoy cooking, but that doesn't mean everyone has to make every meal into a banquet.
>Dealerships hate carrying extra inventory because it costs money to finance the vehicles until they sell them.
Note that with interest rates having been really low, even negative in real term, an inventory was almost a good investment with relatively good returns (if you could get your hands on it). Now with rising interest rates and falling inflation, the cost of financing might become a burden again.
The bank rate to the dealership to carry its floorplan is much higher than the posted rates. Yes, being able to carry inventory during the pandemic is advantageous but otherwise dealerships work hard to not having a vehicle older than 180 days as they become undesirable to consumers.
>an inventory was almost a good investment with relatively good returns
This is a great point. Any dealer who had surplus inventory heading into summer 2020 did really well on their margins I bet. Of course, not something you want to base your business around...
Further, if a manufacturer were to stop paying for a portion of the floorplan interest when the vehicle is sold, then the effective interest rate may go up even more dramatically for lots with inventory over N days old.
Since Ford’s plan to prioritize direct sales has made news recently, it seems plausible they will seek some means to limit existing dealer inventory.
GM went through a dealer culling after the government bailout to strengthen the remaining stores. The Covid shock, it appears, may permanently cull inventory levels across the board and (optimistically) have the same end.
I was seriously looking to buy and stopped when I was quoted a 9 month delivery time.
Also, what is the point of a dealership if you have to wait a very long time and have no negotiation leverage? They might find they regret their temporary boost of profits when it destroys them. Ford is selling EVs direct to consumer now, the writing may be on the wall for dealerships.
My friends who work at Ford all report a general feeling of being over the dealership. They’re just as sick of the dealer shenanigans as we consumers are and it sounds like they’re working hard on cutting them out. This didn’t have to be—but the dealers insisted on being scummy and not changing with the times and now they’re left friendless.
TBF there is a very slow moving pendulum. The manufacturers screwed the dealerships many decades ago, so the government passed laws to protect dealerships (see also: in some states you can't buy a Tesla at a Tesla showroom). The dealers in turn used those regulations as leverage against the manufacturers.
General speaking: in times of high-margins, manufacturers want to kill the dealerships to capture a larger slice of those margins. In times of low-margins (even negative net margins) the manufacturers want to force the dealerships to eat as much of the cost as possible.
Manufacturers having the capability to do this is a relatively recent development, though, historically speaking. Originally even the largest manufacturers couldn’t afford to build out the necessary sales and service infrastructure across the US without the independent dealers.
Previously, some dealerships were offering “cut the line” fees to their Lightning reservations, and Ford called them out by saying that dealerships that do that will get less stock.
It’s about time OEMs fight back against dealerships.
Because the US has a law that prohibits direct sales and must be made through a dealership. Presumably some middle man bribed their way to creating that law
> Context: for ages, OEMs (the factory) have had a belief that Americans will not wait to buy a car. There's also a bit of a prisoner's dilemma: if any automaker wanted to trim inventories, the customer could go to a competing automaker's lot and buy today. Since customers will not wait to buy a car, a dealership must have some quantity of vehicles that are acceptable to buy today.
I think this is mostly true, for a decent chunk of buyers. And I think this is part of the reason why we've seen used car prices skyrocket. People who have the cash to buy a new car but can't find what they want on the new lot are buying whatever they can.
Every day there are several major crashes where a car is totaled: cannot be fixed and so the person needs a new one now. There are also a lot of people who wait until their old car breaks completely before deciding to get a new one (the car may or may not be repairable, many people give up on a perfectly good car). Both of these cases are high profit margin I need a car now I'll take what I can get.
Someone who is willing to order a car and wait is more likely to look for a better deal if they can get it.
> In future American OEMs may move to a more European model where vehicles are built to specific customer order
This would be a great thing. NPR ran a show last week about the benefits of switching to this model for the consumer in terms of products of all kinds, and it turns out that given this choice, the customer makes better, more ethical and informed decisions about the product and feels better about the relationship they have with the producer and manufacturer. It tends to create a better and more loyal customer over time as well.
I think any move that goes in this direction will be deemed a non-starter by incumbent industry even if it could lead to the good stuff you mentioned later on.
Only for decisions people can make though. If the option I really need is only available bundled with a bunch of other high priced options my decision is more informed, but it didn't change.
OTOH, it isn't possible for a dealer to keep all possible combinations of options on the lot. Even the largest dealers don't have that much lot space for one model (much less all models). This is why there are so many bundles: you chose package A,B,C and then color. However if people are ordering they may give the nod to a manufacture that allows them to unbundle choices, and this competition may force them to make lots of different options and thus lose the profit margin on lots of options that maybe people didn't want but it came with an option they demanded.
OEM's and dealerships make a very large amount of their profit on parts (OEM's) and repairs (dealerships). And both make money on financing.
This is especially true for dealerships. Sure during a shortage dealerships are happy to sell limited inventory at much higher margins but in the long term that's going to eat into their bottom line. Financing alone often surpasses profits on the car itself. Then also fewer people will bring their cars in for scheduled maintenance and get their cars fixed during the warranty period. After that a lot of people get their cars fixed at less expensive 3rd party repair shops.
A family member worked in the industry for years and conveyed this to me, but it's also what the sales manager told me when I bought a new car recently: No one was happy. Salespeople made fewer bonuses hitting quotas and the dealership's long term profit forecasts were way down, even if current profit margins made short term profitability the same or slightly higher than usual.
There's also the fact that many dealerships are doing deals fully online. So your local Ford dealer isn't competing with the other one in town, they are competing with the other one in town and all the ones that facilitate online deals.
This has become the thing to do if you want to avoid dealer markups. Just call around until you find a dealer that will honer MSRP and will ship to you, then do the deal with them.
> In future American OEMs may move to a more European model where vehicles are built to specific customer order. This takes on the order of two months at the moment for many legacy reasons, but there is no need for it to actually take this long.
You've been able to do this in the US forever; you just might have needed to pay closer to (or even at) sticker (now I'm sure it's higher than sticker).
Only on some makes and some models. Try doing this with a Japanese car or your average Volkswagen and you’d get nowhere. This apparently used to be more of a thing when American cars ruled the industry — custom orders could be quite profitable — until the Japanese makes came along with severely limited optional equipment as a quality and cost saving measure.
The dealers lost a lot of sales to sleep on it. They discovered if you put someone into a car that was close (wrong color, not quite the same options) they would happily drive it home and not return it. If you ordered the exact car someone wanted they will often call you the next day saying they changed their mind, cancel the order.
I tried to do it with Toyota and got absolutely nowhere. I talked to dealer after dealer, and they all told me that they couldn't customize a vehicle order. I also couldn't do it on Toyota.com - after I configured a vehicle, all it did was refer me to a dealer who told me that they can't customize anything.
That is odd because Japanese dealerships carry very little inventory and make to order.
You go to the dealer and test drive, sit down and go over packages and finance then a couple weeks later your car shows up and they either deliver it to your house or you go and pickup.
I can't believe people go to a dealer and are willing to drop $30k+ on a new vehicle that isn't to their exact spec just to drive away that day with something new. There usually aren't too many options on cars -- color, wheel design, a few packages. If I'm spending that much money on something, I'd want exactly what I want. I've even flown to a dealer a few hundred miles away to buy the exact car I want and drove it home.
If I drive a car for ten years and I save over $1k for getting a "meh" color instead of the color I want, that's over $100/year that I save. I am 100% willing to be paid $100 each year in exchange for driving a gray car.
I suppose I've also never spent over $30k on a car...
> Dealerships hate carrying extra inventory because it costs money to finance the vehicles until they sell them.
Why aren't dealerships just consignment stores for cars? That seems like it'd work out better for everyone involved. (And they could still follow "manufacturers can't sell direct" regulations, by having the dealership buy the car from the manufacturer just-in-time to resell it, once they've already got a signed contract from a buyer. And the manufacturer(s) they sell for could even extend them a line of credit to cover the float required to do that, so that they can operate on the same thin business model as regular consignment.)
>Why aren't dealerships just consignment stores for cars? That seems like it'd work out better for everyone involved.
It wouldn't be better for the dealership when you take into the fact that they are a dying business that literally everyone (car manufacturers, clients, etc.) hate. The only thing that keeps them in business is laws that were passed so f()cking long ago that your grand parent were not even born yet. The justification at the time were valid, they were helping protect consumers and tried to create a "fair" market place amongst car sellers. That was back in the pre-internet and for some people even pre-phone era. when society changed and they became a useless parasite, they never tried to innovate or adapt to the new reality, they just doubled down on their hostile model.
There is no long term future for most of them, especially not with EV cars that require less maintenance. If there were no laws protecting them, most of them would be gone and car manufacturers would let you buy direct from them online. None of the crap they force you to go thought would be tolerated if you could just pull your phone in front of the sales rep and buy the exact model you want on the spot at msrp.
>It wouldn't be better for the dealership when you take into the fact that they are a dying business that literally everyone (car manufacturers, clients, etc.) hate. The only thing that keeps them in business is laws that were passed so f()cking long ago that your grand parent were not even born yet.
There is no evidence of this. Dealerships exist, and flourish, all over the world where no such business laws exist.
Their business will change and adapt, some dealerships will fail, but "everyone hates" them is a major exaggeration.
Are you speaking of used-car dealerships, or "franchised first-party" new-car dealerships (e.g. "a Honda dealership")? I know the former exist in most places, but I think the latter is pretty-uniquely American.
> Why aren't dealerships just consignment stores for cars?
Presumably because people prefer getting less money now to getting more money later. Also most dealerships essentially "flip" cars (like those people on HGTV flip houses) - they clean them up, do basic service, add a warranty of some sort and that gives them extra margin versus just taking a small fee for handling sale paperwork.
Honestly I'd hate to sell a car via consignment because there's zero incentive for the dealer to do anything with it. They might sit on it for months.
> Also most dealerships essentially "flip" cars (like those people on HGTV flip houses) - they clean them up, do basic service, add a warranty of some sort and that gives them extra margin versus just taking a small fee for handling sale paperwork.
To be clear, I meant new car dealerships — the ones that are branded to a particular manufacturer brand (e.g. "Ford dealership", etc.) Why aren't those dealerships just consignment stores? It would stabilize a very cashflow-constrained franchise business, into something that's essentially just "making money to be a showroom" — which is exactly what those really are.
> Honestly I'd hate to sell a car via consignment because there's zero incentive for the dealer to do anything with it. They might sit on it for months.
Seems fine to me. Any consignment store is really just doing lead-gen: helping to arrange a contract between the buyer and the manufacturer (where they just happen to take temporary possession of the car in-between.) Sort of like a car real-estate agent.
The important thing to realize about consignment models, is that your customers aren't the people coming in to buy things. Your customers are the manufacturers, who essentially rent space in your lot to show off their products. If you don't work to sell their products, the manufacturers stop renting that space from you, and you don't make money.
Certainly, consignment stores aren't as motivated to move particular products. Especially particular high-margin halo products. But they are motivated to do volume — i.e. to hit their manufacturer/renters' revenue targets.
(Also, keep in mind that a consignment store can't really "sit on" consignment goods; those aren't their goods to sit on. If the manufacturer wants to rotate them out for other stock, they just go to the store, take those goods out, and put something (or nothing) else in its place.)
For new car dealerships I think the reason is mostly just historical precedent but much like how movie theater owners make their money by selling popcorn and all the ticket sales go back to the studio, car dealerships make their real money through service and the car sales are often a wash.
That's also essentially how a lot of financing arrangements are already made on the consumer side anyways. When getting financing over the weekend the dealer will draft up a contract between them and the consumer and then later on transfer the actual loan to the financial institution actually providing financing. It wouldn't be that much more convoluted for the dealer to sign the contract and then settle the whole ownership - loan holder details right afterwards.
>Now customers are used to waiting and nothing really catastrophic happened to the dealer or the OEM. In fact profits went up substantially.
"Nothing catastrophic happened to the dealer" only in a world where dealership employees don't count. My VW dealer had to lay people off, not enough volume.
>Dealerships hate carrying extra inventory because it costs money to finance the vehicles until they sell them.
Well, yeah, this is literally every single retail business anywhere. Who wants to carry inventory? The point is to turn it over ASAP. That doesn't mean the optimal level of inventory is zero.
You don't have to do that. Many if not most automakers, both foreign and domestic, already accept custom orders through their dealers. You're not going to like the wait time, though.
I placed an order for a Sienna a couple of months ago. However, it's more of getting put in line for something similar that is allocated to the dealer. The more specific, the longer the wait is.
But this doesn't make any sense, that's exactly the problem. If you wanted a particular configuration they should direct the plant to assemble that configuration just as soon as they've finished assembling any special configuration requests placed before yours.
Possibly they do configurations in phases, so the more unusual your request, the longer it will be before they're building a suitable batch.
Maybe they only do adaptive cruise models on Wednesday and wood trim on the third week of the month. Now to get both you have to wait a month and because the ship leaves in 2 weeks, now you have to wait for the next one.
Semiconductors are the same. Manufacturer lead times are, even in good times, long for many things because they don't hold stock to cover big orders. If you come along and order a million AD4242WTFBBQ-OMGXXX, one of dozens of variants of a chip, they don't have that boxed and ready. You'll have to wait until the fab is doing that variant again.
The problem now is that all the distributor stock that used to keep everyone going while the big orders were scheduled is gone, and the fabs are so slammed that the time to the next free slot is measured in years, not weeks. And that's if the fab is still making that jellybean part at all and hasn't switched to a higher-margin part.
I've been looking for a van and I was told that Chevy full size vans are done in the same plant as an SUV. They do a 2 month cycle of vans, then a 4 month cycle of SUV. So if you order at the wrong time, it could be over 4 months to wait.
For Toyota, there are no custom orders. You wait until the dealer gets a specific allocation. I imagine that this is due to their precisely tuned JIT manufacturing?
For many other brands, your custom order goes to the factory when you make some small commitment.
JIT can allow customization. Toyota doesn't want to work that way, but others do. John Deere (the company I work for) makes everything to order, when you place your order you are buying a spot on the assembly line for the options you want. We can't even make all the combinationally possible options in a single year for many products (big car makers have much larger volumes). Whatever options you want is what we will put on yours.
In order to pull that off our lines have to be flexible. Some options require a special jig, so we have larger factories to put all the jigs near the line, and we allow time for the person at the station to get the right jig out and store it away when done. We could produce product a little faster if there was just one jig on the line, thus the smaller line could move faster (or more likely use that space for more stations), switching the jigs out monthly. It doesn't make sense for us to do that, but for Toyota is probably does. (I'm told Honda has automated the jig replacement so any line can produce anything - but this limits what they can make)
Yep. All the large car manufacturers, and maybe all of them large and small, have JIT supply chains. I didn't mean to imply that JIT couldn't support customization, since obviously others allow you to build custom, just that Toyota's reasons for not doing customization may be linked to their particular JIT choices. And not some other deciding factor.
It's worth noting that Toyota suffered least (or last, anyway) with COVID-related supply chain restrictions. Their JIT is a particularly fine-tuned machine. They are the inventors of it, are they not? I read somewhere that many, if not most, others' are a poor simulacrum of Toyota's, and they don't understand it really. Like the way that most people implement microservices, or big-A Agile.
It depends on where the vehicle is in its life cycle. New Corvettes, for instance, are frequently custom-ordered. The options the buyer has are:
1) Buy off-the-rack from a local Chevy dealer. For the first couple of years after a major revision, the dealers mark up the cars to ridiculous levels. You will pay out the nose for instant gratification. This used to be an issue for high-end sports cars only, but these days even a Honda Civic customer can expect the same treatment.
2) Order from a local dealer. You typically don't have to pay as much for this, depending on your relationship with the dealer. But it can take a very long time for the dealer to get an allocation slot from the factory, especially for smaller stores that don't sell many Corvettes. At the time they take your order (and your deposit), they may not bother telling you that they don't have an allocation yet. You could wait a year or potentially more.
3) Buy off-the-rack from one of a few massive dealers, typically out of state. The dealer's allocation is based on how many Corvettes they sold in previous years, so some dealers specialize in selling from inventory at MSRP or below to achieve the absolute maximize possible sales volume. You will have to drive the car back home or have it shipped.
3a) A subset of these buyers will use a local dealer to accept "courtesy delivery." This means that the car is custom-ordered from the out-of-state volume dealer and shipped directly from the factory to your local dealer for delivery for a relatively-low fixed fee. Local dealers are about as enthusiastic about this as you'd expect, and many will refuse to participate. These buyers save some money initially, but are low on the totem pole when it comes to scheduling service appointments and getting loaner cars.
For Corvettes in particular, the custom-order options can be combined with delivery at the factory/museum complex in Bowling Green. European cars are sometimes offered this way as well, where you get to drive the car around for a while before it goes on the boat.
Once the car is no longer the hottest new thing on the block, the prices come down for both custom orders and off-the-shelf deals. The same purchase/delivery choices are available, though. Almost everything said about the Corvette purchasing process above applies to new Jeeps and pickups nowadays.
> OEMs (the factory) have had a belief that Americans will not wait to buy a car
It's really contextual. If your current car was in an accident, you will need a new one ASAP. On the other hand, if your current car is working okay, why not wait until you get exactly what you want?
What's driven me to pick from inventory is immediate need. In the past, I came across good deals in inventory that a dealer was looking to move; and I really needed to replace my car. (Car died, putting too many miles on a lease, car wouldn't pass smog.) Now, I've replaced cars because I was afraid they'll break down on me at some point in the indefinite future, so I just order a Tesla about a year or two before I think I'll need it.
Perhaps used cars will fill the need for people who just really need/want a car now?
I wish dealers made it easier to order cars, before the supply shortage, I couldn't get a dealer to place an order for exactly what I wanted, which was invariably never what was stocked. I'd rather return to a build to order model, with greater variety of configuration options.
What I wanted was in a color not commonly stocked, with an unusual interior color, and the upgraded engine, with all the packages - but without a sunroof. That's a nearly impossible combo to find, my car is like 1 of 22.
I think you need some cars on the lot for people who can't wait 3-6 weeks for a vehicle, but I think you'd see more customers move to ordering, if it was an option.
> I think you'd see more customers move to ordering, if it was an option.
Dealers AND auto makers don't like that because some people will place an order and then the next day cancel it. If the dealer instead puts them in a car that is "close enough" most people will keep the car even though it isn't perfect. They do lose customers like you who are very specific about what they want, but they gain more. (or so they think)
I'm pretty flexible on some stuff - like exterior color, but I live in Texas, and yet all the stocked cars (of the type I want) come with a black interior. Same with the sunroof problem, if I want a high end trim, it comes with everything, so at that time it meant buying what is effectively comparatively a stripper if I dont want a sunroof.
The pandemic made it so they'd actually take my business, we negotiated the purchase contract at the time of order, and I got it without all of the stuff I didnt want.. like nitrogen air, tint, and the 'paint protection' BS. I did have two minor quality issues - the rear AC vent trim bit was not fully seated, I fixed that myself, the other one is the gas door sticks on, why? no idea - the dealer has tried a couple things, I've found cycling the opener 2-3 times opens it just fine.
Example of one, but once I heard about the 9+ month wait times for cars I wasn't even excited about, I just decided to keep my current car and fix the paint, detail the interior, etc. I can wait to buy a car, but not on a paid wait list.
That all sounds nice in theory when all manufacturers had constrained inventories and consumers were being told about this once in a generation car shortage. But back in normal times, if one manufacturer always has cars on the lot in your choice of colors at 3k below MSRP and your previously preferred brand has no cars on the lot in black only with a 2 month lead time for 5k over MSRP, guess what, your brand preferences are going to change!
Idk where you live, but paying over MSRP is unnecessary where I live (tier 2 US city) unless you’re looking at a very high end car ($80k+).
Most dealerships near me that priced gouged had to change course pretty quick. I bought 2 vehicles during the pandemic, both at the same dealership, both at MSRP. I think most people who pay over either don’t know other dealerships will negotiate to MSRP, or they just really want a specific color, etc.
And it shouldn't work like that. Haggling the price of a car simply shouldn't be something that is done. Every vehicle for sale should have the price listed on it. No dealer should expect more and folks that think it is too much should simply not buy.
If folks are paying more than that or expected to "trick" people into thinking they are getting a good deal (or ripping off the dealer), this isn't an honest sale. It is a game of "who can trick the other more". The MSRP isn't realistically there to advertise the price of the car.
The reason I'm against it is because it means folks are going to get taken advantage of. In a lot of cases, it is the buyer.
>it wouldn’t work that way if everyone approached dealerships like that
Of course it would. Dealers have some flexibility in their margins. Just like you, they have a price below which they will not make a deal. If you offer too low a price they will simply say no.
This isn't rocket science; buyers and sellers come together at an acceptable price.
We shouldn't be expected to haggle. Just expect everyone to be more honest about pricing - haggling makes it so folks compete and try to trick each other.
I'll add that at least one of these wasn't you haggling - you just happened to be associated with a place that gave you a discount. And you don't need dealerships to get such a thing.
> I think you'd see more customers move to ordering, if it was an option.
That is dishonest. A dealer needs to make his pay. You took his time, they need to make money for it.
Of course it works out because dealers know that you know what they paid (edmunds, kelly blue book, and a few others I can't remember) will tell you the exact numbers, and everyone knows that. Dealers just have found other sneaky ways to get their money instead. It is people like you are refuse to allow a simple honest profit margin that force all the evil financing junk that dealers pull instead.
Know the 4 boxes where they make profit. Price, trade in, add ons, and financing. You just found out that a law that forces MSRP doesn’t do much except help politicians break their arm patting themselves on the back.
And you should go into the dealership with clear alternatives to each.
There are lots of dealers to buy vehicles from, lots of people to sell your vehicle to, plenty of alternatives to "add on", most of which are unnecessary, and lots of banks and credit unions to loan you money.
When you have alternatives and can use them at the dealer, you'll get dealership down on prices. Understand the incentives the dealers have (how they make money, especially extra money), understand their cost structure, etc. and you'll have even more bargaining power.
For example, you can often leverage financing to get the price down. The dealers get extra cash by bringing financing deals to their partners, so they might take a few hundred off the vehicle if you finance. Even if you want to pay cash, take the financing (make sure no origination fees or early payment fees) and pay it off before it accrues any interest.
I've also walked into dealers before with print outs of the same vehicle priced lower at other dealers and magically they become more flexible. I've ever tried this before where I didn't present this info and they let me walk out of the store, refusing to budge. Then when I came back with the info, they became more flexible.
The service departments pull this nonsense as well. I've negotiated service prices down 40% in the past and know that you can use things like recall repairs to get a better deal on repairs you actually need done (if you do x repair for $y, you can do this recall repair as well).
I think dealers are an extremely bad component of the vehicle market, but eliminating them will lead to people who can exploit the system to pay more. It will be an overall net benefit for the market though.
I've found (in the US at least) that automaker financing on new vehicles is usually better than any other banks.
I'm now wishing I put zero down on my last car, because it's looking like my loan is way cheaper than inflation is going to be over the life of the loan.
Last time I thought financing might be a good idea, the dealership asked who I banked with, applied for a loan in my name without my permission, and presented it to me +0.5% extra profit for them. They were just going to insert themselves as an intermediary.
The automaker financing is often subsidies. In the past you could choose a rebate or their low interest financing, if you ran the math the rebate was basically the difference between the interest rate they offer and what a little more than what a fair market value interest rate would be. I seems the rebate option as disappeared though, so financing is probably your only option to get these rates.
Of course in the end if you have options you need to run your own numbers. Things change far too often to give general advice.
Right, the automakers' finance divisions make money by selling cars, not loans. If you can get a loan under the prime rate, it's definitely subsidized.
> I'm now wishing I put zero down on my last car, because it's looking like my loan is way cheaper than inflation is going to be over the life of the loan.
Would you have invested that money in something that is currently growing at least as fast as inflation?
> Really glad that dealers in Canada can't charge over MSRP for new vehicles
Oh, this explains it. I spend time in Wyoming. There appeared to be, last summer, a solid business of people buying cars across the border, driving them to Montana and/or Wyoming, and then re-selling them used.
I thought it was just the used car market being weird, though that didn't explain the Canada bit. This does.
It's actually a bizarre, economically illiterate regulation. Why shouldn't dealers be able to charge whatever they want for vehicles? If they set the price too high, no one will buy the cars.
I work in retail automotive in Ontario, Canada. It sucks to read that you paid over MSRP. The province of Ontario has a governing body called OMVIC that doesn't allow sales of new vehicles for > MSRP/sticker price. That said, not all OMVIC registered dealerships abide by that policy, but I do know the one I work for adheres to it. All told, dealerships are making the same amount of gross now as they did prior to the pandemic, if not more thanks to full margin sales despite lack of volume.
Not sure how car dealerships in the US work, but that is the general inventory management problem: sales what all of everything, finance wants nothing of everything, productions wants to keep utilization at 100% and Supply Chain needs to balance that. From experience, this works best when sales has no direct influence on inventory levels and forecast accuracy goals on top their other ones. That way you can let Supply Chain, through sales and ops planning, figure out how to meet both availability and inventory targets.
I'm sure they will all return to the way they did things prior to covid. All it will take is GM or Ford to start stacking new vehicles on car lots, and all of them will have to follow along.
The preorder model only works with artificial scarcity. When the product is plentiful, people want it today. Nobody waits for their Tesla just because they can do it all online. They'll put up with the dealer hassle if it means getting the car today.
Now, if you can get the online order model to work with really short lead times, this might gain more traction than usual. E.g. bring me a car to test drive, and very soon -- today ideally. Then I order the car, and you deliver it to my house on a trailer within a week.
But months? No way, this is how you tell customers to go somewhere else.
> Ford leadership seems to really want to move to the Tesla preorder model
It may not be so much that they want to, but it is apparent that Ford is struggling to figure out how the dealership fits in an EV world, where your customers aren't constantly funnelling in for oil changes. The ICE model allows the dealership to make a sizeable portion of their income from the attached repair shop, but much of that shop work goes away with EVs. This will bring higher commission expectations and Ford could quickly find their cars priced out of the market from that when competitors aren't establishing dealer networks.
Oil changes are a good source of income, but there is a lot of other service. Oil changes are nice to get people into the dealer, but many people go elsewhere for them. My last new car was recalled a few times, for things unrelated to the engine. An EV still has a suspension system, tires, steering, brakes, and thousands of other components that can have recalls, break, or otherwise need work.
There is a bit less maintenance without an ICE, but not much.
This may vary by country. A large proportion, maybe even all, of the Ford dealers in the UK are owned by Ford itself. The only Ford dealers that I have had contact with in France are still separate companies.
Tesla only sells luxury cars, even the Model 3 is considered luxury ($48k). Supposedly Tesla was going to sell in the luxury segment then ramp up production for other market segments.
When exactly is Tesla going to offer an economy car? With their margins they could make the Model 3 priced like that to win market share before other automobile companies catch up. I don't follow them or their product releases but haven't seen anything in the press about that direction of the company.
>With their margins they could make the Model 3 priced like that to win market share before other automobile companies catch up.
You've answered your own question: their high gross margins have more to do with accounting differences with OEMS than actual finances. Making cars is expensive.
Car dealerships and the experience of being in one is truly like stepping into a different world/time. The only other industry that’s close is real estate. These types of businesses function as if the internet doesn’t exist. As if I can’t pull up the factory MSRP on my phone for a car, or find a house I want better than my realtor can on Redfin.
I think the sooner all car makers move DTC the better.
This sentiment is common across any industry that did well during the pandemic due to supply side issues. But I think it would be a little disingenuous to believe that manufacturers previously had the market all wrong and have just now realized that they could have had higher margins with artificial scarcity. In an actual free market, now is the anomaly, not the way things were in the past.
Of course they want margins to be as high as possible. There are enough things that factor into it that they can't just turn a knob (especially buyers and competitors).
The Pico is a great product, but probably not what people are looking for when they say "Raspberry Pi". If there was an Arduino shortage and you said "just get a RP2040", that would be helpful. But people want Linux boxes that make their 3D printer 4% faster or whatever.
I am freshly obsessed with the RP2040 chip, last time I checked Digikey had like 90,000 in stock at 1USD a pop. I am really curious to what extent it could be configured to do the job of many of these out-of-stock chips that the car industry is hurting for, perhaps straight up emulate their I/O ?
I doubt the RP2040 is automotive grade. Cars are pretty harsh environments for electronics, they have to operate in all kinds of climates, hot, cold, humid, dry, with condensation, vibration, large voltage spikes while the car is getting cranked, etc. I don't think any manufacturer would sign off on such a replacement, only to have to recall the cars later on due to the replacement chip failing.
Keep in mind that microcontrollers is just one of the type of chips that the car industry, and others, are lacking. Supporting ICs like power management/voltage regulators, opamps, ADC/DAC's, motor/bridge drivers, interface ICs like CAN bus drivers have all been massively out of stock.
That said, as I understand it, a lot of the automotive microcontrollers are either specialized or they're part of an approved design. So switching them out is not trivial.
On top of that it's the case of not being automotive grade as mentioned already.
Qualification of a design takes a lot of time and money, and would need to be at least partially redone to replace a microcontroller. You need to be risk-averse when you sell hundreds of thousands of an expensive product with warrantees, and much more so when human safety is involved. I work in aerospace, not automotive, but I guess the industries are similar in that changing a microcontroller can easily take 1 year of time and 2-20 person-years of effort.
In one week we got news that wood logs price are normalizing, that GPU and ram are starting to be available and price as per catalog and now that. It seems only oil price normalization is missing and that would mean the inflation was truly supply side and temporary.
Actually, the word used by the fed is transitory. They specifically didn't use the word temporary. They explained that by transitory, they meant that inflation may go up for a while, but it will stop going up after a short time. That doesn't necessarily mean it will go back down.
I have a hobby around electronics, and as a side effect, I have been keeping CSVs with all the components from JLCPCB Parts library for the last 6 months. It appears that we're slowly crawling out of the pit:
Did you also notice that certain electromechanical components like connectors (e.g. from Molex) had supply issues? I wonder what the reason for that was.
Connectors as a category are at 75% in stock, which is greater than across all categories (~51%). As for specific connectors / manufacturers: possibly. Panic buying + scalpers may have contributed.
I just noticed that inventories over at crutchfield.com are coming back to normal levels. Many of their products have been difficult to get over the last year due to the chip shortage.
The ripple effects from the chip shortage will be felt for years … nearly all new cars are already “spoken for” and consumers will still be paying MSRP & MSRP+ for 12-18 months. What happens to used car prices over the coming 2-3 years will be fascinating. So many people will be underwater on their car loans.
>So many people will be underwater on their car loans.
Can you clarify what you mean? A car is a rapidly depreciating asset; being underwater is the norm. It's only been during the pandemic that used vehicle prices have outstripped loan values.
A lot of folks bought used cars at ridiculously high prices (over original MSRP when sold new in some cases). Banks approved them for those loans, and when the market corrects and used values come back in line (ie stop appreciating and depreciate again) those folks will be in severe negative equity positions.
People who bought a used car because they needed something now and couldn't get new (ie totaled their old car), they were probably planning on trading that car in for something new ASAP. People who buy new cars tend to trade them in every 3 years, so driving a 3 year old car is not normal. While a new car will be underwater for a time, normally by the time 3 years have passed it is worth about what you owe and so trading in isn't a loss.
People spend about $20k-80k more than they need to just so they can drive something they like.
We could all be driving Honda Civics, but the world is full of BMW 3series.
If you're blowing an extra $20k to have a car you like, what's another $20k on some fuel if that's what you like.
My neighbour bought a 2017 Cadillac Escalade V8 supercharged during the pandemic that gets 7.1L/100km (33MPG) on the highway due to displacement on demand and they live in the country so it has worked out well for them as they need the 4x4 and the space of the vehicle. I was annoyed since that's better consumption than my 4 cylinder econo-box.
If you look at the last 20 years, then the current $100/barrel seems to be the "new normal" ? (Up from ~$25/barrel for the 2nd half of the 20th century.)
Now, currently it's more the lack of refining capacity that seems to be pushing fuel prices up, the crack spread is up to $50/barrel !!
If this is the base, it'll just be a form of inflation and get lost pretty soon. Currently 1 hr of fast food labor buys you 2 gallons of gas. That's probably pretty close to what it was in 1996 also.
Gas was not below $1 a gallon in 1996. Especially not in California. Also, cars weren't getting the mpg they are now.
Cost per mile relative to minimum wage probably isn't that far off.. which you can probably see from data that basically everyone is driving as much as ever.. because other than mental sticker shock, it's still fine.
Literally $1.10 (and often less) at the station down the street from my home in San Jose. My car had roughly the same mileage as my 2011 car that a drunk person recently destroyed.
Right now, even if min wage is what, $15, a gallon is $6, so I don't understand what you are saying.
I just bought out my lease, and the estimated dealer purchase price of my vehicle is substantially higher than what we paid for it. One of those situations where the script was flipped from what I expected.
Waiting longer is ok, it is waiting a random time in a unplanned way with a missed date that is very annoying and becomes expensive, not keeping to schedule will make consumers look elsewhere.
I ordered a new Porsche SUV in the middle of December. It just got offloaded from the ship at port today, so I should finally have it in a couple weeks. But it will be missing some of the electronics, such as the electric steering wheel adjustment due to chip shortages.
My poor sister-in-law also thought she ordered a Toyota in December. But as it turns out, the dealership just took advantage of her and told her they ordered her a car when really she gave the dealership a $500 deposit to let her know if a car ever comes in that matches what she wanted.
I think you’re better off getting on a waitlist and seeing what allocations come in. I was in the market for a Highlander and my local Toyota dealership that’s selling at MSRP had 0 on the lot. I got on the list and the week after they got two in. They called 26 people and I was one of the only ones able to come in right when they called, so me and another guy got the two.
Yeah, that's how I ended up getting one. Working from home and living 5 minutes from the dealership.
The sales manager told me while they finished prepping the truck, their system is so messed up right now they don't even really know when they're getting deliveries. Trucks loaded with cars just show up randomly on the lot and they work the phones to get them sold.
That's pretty normal for the Japanese manufacturers, especially on anything they build in Japan. It has always been the domestic manufacturers who were willing to build you a car exactly to your specifications.
I ordered a RAV4 PHEV (prime in US) last year and it was a factory order from Japan. Toyota Europe app even tells you when it’s built and then tracks the shipment to your local Toyota dealership.
> The remaining all said basically they’re at the mercy of what Toyota makes and decides to allocate to their dealership.
This is what the guy at my sister-in-law's dealership said after I got on the phone with him and asked him what the heck was going on with her order when what she was telling me didn't make sense. Would have been nice for him to admit that up front instead of just taking her money and smiling.
What one salesman told me is that they do have a system where they can enter allocation requests.
So they can enter into the system they want a '22 Tundra Crew Max with an exterior color of Lunar Rock and this/these packages.
Toyota won't specifically build that, but in theory if there is one built matching that requirement they should get it as an allocation. In reality, he said they never get their allocation requests.
Some dealerships (the 2 I mentioned in my research) tell people they're "ordering" when really they're just "requesting allocation."
I ended up lucking into one at MSRP that pretty much checked every box in the 'need' category at a dealership 5 minutes from my house. They wouldn't take reservations or holds, just happened to be able to get there quickly whenever a truck rolled in with Tundras on it.
Another dealership offered me a TRD Pro Tundra, with a $16k dealer markup. I passed, but from what the salesman told me later the very next person (I was #1 on the list) he called bought it with that markup without hesitation.
> I ordered a new Porsche SUV in the middle of December
I just ordered a 911. It's a July build scheduled to be in September (let's hope it actually arrives). I had a Macan S that got held up in port in 2019 for months (once it arrived).
I am curious what was the 'above MSRP' that you paid when you ordered?
We design embedded too and I'm with you. My good friend and associate is one of the world's foremost aftermarket component traders. European, but based in Shenzhen. Same industry for 30 years. Clients include everyone who's anyone. When he stops telling me about record monthly profits after drinking, I'll believe it's over. Until then, no. FWIW, the beer-brag-barometer-index (BBBI) has been tracking solidly upward since 2019 with little exception.
I don’t know if it happened for sure but I’ve been waiting for this component for a few weeks and it finally showed up on Texas Instruments website with 300,000 in stock. A day later it was out of stock. I then checked out Octopart and findchips and looked at the 3rd party resellers and I’m guessing they might have gobbled it up as I’ve read in other threads (the 3rd party resellers on Octopart showed like 10-40k in stock for that component)
So the implication is that some resellers buy up gigantic amounts of components, to take advantage of the massive markups on them that people are prepared to pay right now. Course, if the price/supply on them drops to normal levels they're looking at an instant disaster, and will have to offload them at severe markdowns.
Starting to understand why they say the IC market is cyclical, with wild swings between oversupply and undersupply.
Not sure the size/volume of your endeavor but it's possible the car manufacturers are leading indicators, given their size—it was a rude shock to them post-COVID that they had lost their place in line, but they're still big enough to muscle back to the front.
I sold my pig of a truck. Now I want an EV the $5K local government rebate new or used EV added to a $5K Federal rebate (new EV only) is a big incentive.
If the free market is working, whoever managed to ramp up production fastest will reap the rewards and put everyone else out of business. Good for them.
I have an email account without MFA enabled with encrypted files containing stuff like recovery codes, password manager secrets and other essential stuff like that.
I never use this account for anything else and never send emails from it (other than for itself to store new items), and the account name itself is kind of a passkey. Years later and I still haven't received spam on it.
As long as <cloud free email provider> doesn't fuck me, looks like a sensible last resort to the failure of all other backups.
Of course, not living in a house made of wood and cardboard also helps.
