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As I understand it, auto manufacturers tend to use older semiconductor technology in their vehicles. But the semiconductor manufacturers have very little interest in upping their production capacity for those older semiconductor manufacturing processes because the profits lie with the latest and greatest tech, not the older stuff.
We know the US is working hard to ramp up domestic semiconductor production capacity, but it doesn't make sense to me that these new facilities will be used to produce what is essentially "legacy" technology. That means manufacturers will be forced to adopt newer and pricier semiconductor products in their new vehicles, and that will drive up vehicle costs.
As a used car dealer I have many thoughts about the market. Pardon my rambling ahead:
- I can't say that we are enjoying this either. While used car values have increased in the past 2 years, so have the costs of purchasing them. We have been trying to maintain a minimal inventory and cycle the vehicles quickly to avoid being exposed when the market does eventually correct itself. Having to buy vehicles over their new MSRP at times is a difficult pill to swallow. But I also have to rely on market data to see what vehicles are in demand and average days they take to sell. As someone inferred earlier, everyone doesn't have the luxury of putting a deposit down and waiting 2-6 months for their new vehicle to arrive. A lot of vehicles are still needs based due to job situations, write-offs, new to BC etc. I feel bad for these people. Inventory levels are low and even some of the slimiest retailers with terrible practices are thriving.
- I can't believe some of the stuff some new car dealers are pulling lately. This example is with some Toyota stores I have heard of: They will take a deposit for a Tacoma/RAV4 Hybrid/4Runner or other hot vehicle. Come the time for your vehicle to arrive, some dealers will not sell you the vehicle if you are a cash buyer. If you are a cash buyer, you best have a trade. And when they appraise that trade, they absolutely lowball the shit out of these people because they know they can. Also, they won't appraise your trade at the time you put the deposit down. Yes, your vehicle may get driven more. But the main reason they do it is because when your shiny new object arrives, they think they have you by the balls and can offer you pennies on the dollar. You don't like the trade value? Ok, no deal we will sell your high demand factory order to someone else. It's such short term thinking on how they treat their clients.
- Another reason for the local vehicle inflation: Some online players that have entered the market. They are paying absurd money at auctions and re-selling these vehicles to clients with challenging credit. So that credit challenged client is already buying a vehicle over market price. On top of that, they will send your credit app to so many banks that it knocks your credit score down so badly. And this is unbeknownst to the client. So they end up coming to us and we check their credit history and notice that there are sometimes 7-10 inquiries on their credit recently. All this under the veil of being forward-thinking business models.
I am looking forward to inventory levels coming back to normal. With few exceptions, vehicles are depreciating assets. Inflation in the used vehicle market is something that is not sustainable both for consumers and retailers alike.
I went car shopping with somebody that's new to BC a few weeks ago, and the local Kia dealership was adding a $2k markup on new Kia Soul EX's. That's nearly 10% of the MSRP.
I pointed it out to the buyers, and they fortunately ended up with a car at MSRP at Mazda.
- I can't believe some of the stuff some new car dealers are pulling lately. This example is with some Toyota stores I have heard of: They will take a deposit for a Tacoma/RAV4 Hybrid/4Runner or other hot vehicle. Come the time for your vehicle to arrive, some dealers will not sell you the vehicle if you are a cash buyer. If you are a cash buyer, you best have a trade. And when they appraise that trade, they absolutely lowball the shit out of these people because they know they can. Also, they won't appraise your trade at the time you put the deposit down. Yes, your vehicle may get driven more. But the main reason they do it is because when your shiny new object arrives, they think they have you by the balls and can offer you pennies on the dollar. You don't like the trade value? Ok, no deal we will sell your high demand factory order to someone else. It's such short term thinking on how they treat their clients.
This is what happened to a friend of mine. The sales manager wouldn't release the car since he was buying it in cash unless he had a trade in but they gave him a week and if no one took it with a trade, they'd sell it to him. He eventually got it though.
Second part happened to me, placed an order for a car and they said they wouldn't appraise it until the vehicle arrived in 3-4 months. I just sold it to a friend of mine for more than what they would've appraised my car at. Luckily I have the luxury of driving other cars while I wait.
The timeline may be all over the place as semi conductor manufacturers are working with auto manufacturers to certify newer tech quickly. What Traum said is true that the automakers typically use really outdated stuff for non-media purposes, easily be running 2-3 decade old designs for things you don't see but just function as you expect.
I went car shopping with somebody that's new to BC a few weeks ago, and the local Kia dealership was adding a $2k markup on new Kia Soul EX's. That's nearly 10% of the MSRP.
I pointed it out to the buyers, and they fortunately ended up with a car at MSRP at Mazda.
I had a similar experience with a local Kia dealer where I put a deposit on for a Soul. Are there any decent Kia dealers in the lower mainland?
- I can't believe some of the stuff some new car dealers are pulling lately. This example is with some Toyota stores I have heard of: They will take a deposit for a Tacoma/RAV4 Hybrid/4Runner or other hot vehicle. Come the time for your vehicle to arrive, some dealers will not sell you the vehicle if you are a cash buyer. If you are a cash buyer, you best have a trade. And when they appraise that trade, they absolutely lowball the shit out of these people because they know they can. Also, they won't appraise your trade at the time you put the deposit down. Yes, your vehicle may get driven more. But the main reason they do it is because when your shiny new object arrives, they think they have you by the balls and can offer you pennies on the dollar. You don't like the trade value? Ok, no deal we will sell your high demand factory order to someone else. It's such short term thinking on how they treat their clients.
I can absolutely confirm that dealers are doing this. My parents were given an allocation of a vehicle after months of waiting. However, this allocation had to be purchased through finance (we were looking to make a cash purchase). If not, we would have to wait for another allocation. We ended up taking the car, but it was absolutely disgusting...
I hope sooner or later we can adopt a direct sales model and do away with these dealers.
Almost exactly like Roach describe. Put a deposit down for a Rav4 was told “just” a 3 month wait. 3 month come they told me I need to trade in my other car or we will be back on the waiting list for the next car, maybe another 3 month or possible 6 months.
Went for an Ford bronco sports instead. Seems like the hotter the model the more they tend to pull this crap.
My wife needs a new vehicle but I'll be dammed if I'm buying one in this market. If we have to wait another 12 or 18 months we will.
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As soon as something gets sorted, either something else will happen, or they will manufacture a crisis to keep prices high. We are now in the world of 120k m3s, 300k GT3s and 100k f-150s. We're all gonna die, so we might as well be leveraged to shit when it happens I guess. Just put it on the HELOC
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98 technoviolet M3/2/5
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Originally Posted by boostfever
Westopher is correct.
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Originally Posted by fsy82
seems like you got a dick up your ass well..get that checked
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Originally Posted by punkwax
Well.. Id hate to be the first to say it, but Westopher is correct.
To echo Roach regarding the new online players (ie. Clutch, CanadaDrives, even Dilwarli Online Loan thingy) - do not use those. They did exactly what Roach said. I had a bunch of ppl call me saying I applied for loans with them too, but I didn't. So that's super sus too. I keep a close eye on my credit score and any new accounts. Fortunately, they didn't knock my score low enough to not qualify for VW CPO or Honda CPO.
I needed to buy a new car in December. My brother was going back to school and needed the daily and I sure as hell wasn't gonna drive the death trap e36 m3 in the snow. At that time, a decent used car was 25K-35K. I figured I might as well pay the premium and get a Type R, cause there ain't no way I'm paying 35K for a Veloster N - sorry Gerbs lol
Definitely the shittiest time to buy a car, but it's even shittier to buy a crappier version of the car you wish you had.
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|| 18 FK8 | R-18692 | Rallye Red | 6 MT ||
|| SOLD 97 E36 M3 Sedan | Arctic Silver | 5MT ||
|| RIP 02 E46 330ci | Schwartz Black II | 5MT | M-Tech II | Black Cube | Shadowline | Stoff Laser/Anthrazit ||
|| RIP 02 E46 M3 | Carbon Black | 6MT ||
As soon as something gets sorted, either something else will happen, or they will manufacture a crisis to keep prices high. We are now in the world of 120k m3s, 300k GT3s and 100k f-150s
yeah they saw what people are willing to throw
there's no going back to affordability for in-demand models
then again e30 m when new is essentially 100k in today's money
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