We've heard before in these pages from The Economic Ninja on YouTube. He's been active in the car industry for a long time, and has been warning of the growing turmoil in that economic sector. His latest warning is a doozy. It's well worth your time to watch it, particularly if you're considering buying or selling a vehicle in the next few months.
In particular, click over to that video's YouTube page and read the comments from other viewers, especially those who are also in the auto industry. They're eye-opening.
Money quote from the video:
"People ask me all the time, 'When should I buy? When should I buy?' I am not going to be buying until the second - end of second - or third quarter, at least, of 2023. All right? Because you want more of this to shake out, more of it to be in front of the public eye, fewer buyers showing up, car dealers forced to liquidate, all right? So it's going to get gnarly."
Word.
Peter
There's a very good reason that some dealers continue to expand and others fall by the wayside, and that video tells you: some dealers are as dumb as a box of rocks.
ReplyDeleteI've been in the industry; never heard of the financing outfit he calls "large." Odd, that. Maybe it's an outfit that only deals with sub-prime loans? Hmmmm.
He's correct that the used market is going to be more favorable for buyers. Fall of '23 is a good guess; may be sooner, may be later. But if you can hold off, wait till all the Dumb Dealers go bankrupt and purchase from the banks who hold their paper and do NOT want parking lots full of cars.
The car biz has been a mess since 2008. Cash for clunckers, the EPA/CAFE, and other factors have made new and used cars unaffordable for many.
ReplyDeleteAdd to that the fact that the internet and the bad repuation dealers have ment that margens are smaller and oppertunites for dealers to make more are much more limited
Will BlackRock go into the used car business as well?
ReplyDeleteWith their business model they'll be renting out/leasing clunkers at high prices or shipping them out to South America; in either case you can be certain they won't lose any money.
A YouTuber named Lucky Lopez has been talking about this for at least a year.
ReplyDeleteI was planning to give my current vehicle to my daughter, as she is using my 2006 and is several hundred miles away. I bought used (sorry, Certified Pre-Owned) and bought the factory extended warranty (online, and transferable) specifically for her. And then the shortage hit.
ReplyDeleteSo, it sounds like she'll be getting the car later this year. Thanks!
As for financing, I always ask for 0%. When they say that's impossible, especially for a used car, I calmly explain that they most certainly will accept 100% Down, 0% Financing.
@SimonJester: That's him in the video above.
ReplyDeleteI have been waiting to buy a bumper pull travel trailer. Maybe the RV market will also have to lower the prices?
ReplyDeleteBS: Navy Credit Union and USAA loan over value - good time to be a Veteran. Used car lots are still operating at 50% to 60% of their inventory levels in the south east. Try to buy a new F350, F450, or F550. You cannot find them for the past 18 months. You can try to order one where it is a 10 month lead time and your order gets cancelled if they change year models. Anything less than 7 years old with less than 100k miles on it is selling at the MSRP of the year they were produced. Sorry Ram and Duramax fans since the 6.7L Superduty hit ya'll are a distant 2nd and 3rd. It is hard to beat 440HP and over a thousand pounds of torque that get 18 mpg city without a load.
ReplyDeleteI'd look for used in RV, not too old but old enough for someone else to have gone thru the "leaving it at the dealer to be fixed" dance.
ReplyDeleteToo many stories of the new ones spending a LOT of time being fixed.
Go to https://www.irv2.com/forums/ and look around, ask questions about the NEW quality of what you're looking at.
In the next county over from me (Marion) there is an old war time army depot that a local millionaire bought for pennys on the dollar years ago . It has hundreds and hundreds of acres of brand new cars and trucks just sitting there with most waiting on a chip set . Meanwhile the factories are still pumping out more new cars to pay storage on . All the smart guys bought a new car last year when loans were at 2 1/2 % .
ReplyDeleteA YouTuber named Lucky Lopez has been talking about this for at least a year.
ReplyDeleteTake everything he says with a couple dozen pounds of salt, friends.