Current New Vehicle Market

[13COBRA]

So when you type "prices will not fall" what you really mean is "prices will fall?"

Uhm, no.


What you're stating is that at ANY point between now and 12/17/2024 if prices drop below today's mark, I lose. What I'm stating is, that sure, they could drop below it next month, then shoot back up again. But I would lose that bet.

I guess what I'm saying is I would make a bet that in 36 months it won't be less than what it is today, barring some catastrophic economic event.

 

[gimmie11s]

So, you want me to bet that over the next three years, it won't drop at all? Psh.

There hasn't been a 3 year period in 25 years where it didn't drop at one point. I'm not going to take a bet where there are 4,380 days that all I need is for one point to move, and I lose. I could be right 4,379 days, and still lose the bet. lol

You're the one suggesting prices will "never" again drop. Why the change in heart?

The bet is $500 and a new car that will cost you 0. Come on six figguh!!!

 

[gimmie11s]

Uhm, no.


What you're stating is that at ANY point between now and 12/17/2024 if prices drop below today's mark, I lose. What I'm stating is, that sure, they could drop below it next month, then shoot back up again. But I would lose that bet.

I guess what I'm saying is I would make a bet that in 36 months it won't be less than what it is today, barring some catastrophic economic event.

 

[VRYALT3R3D]

LOL sure thing homie. So when you get laid off the first thing that you are going to do is buy a new car because "supply overrides all."



A rate hike increases the cost of capital for banks. As cost of capital increases marginal loan origination falls. Dipshits that could get financed when cost of capital was marginally lower can no longer get financed. Because they cannot get financed they cannot buy the things that they would buy when they could get financed. Sales fall. As sales fall incentives increase. Prices fall. This is basic shit.

And by the way this is the reason that the Fed increases rates. To slow down economic activity in an attempt to contain inflation. Which BTW inflation is just a fancy way of saying "too much money and not enough things to buy." So when you hear that the Fed is raising rates think "the Fed wants people to buy less stuff."

Yes, the supply issue overrides all.

It is clear that supply-driven price increases and shortages have caused over 4m units of lost production. As such, the auto industry continues to grapple with disruptions in sourcing key materials and components used in cars. Further disruptions will continue to exist and demand will not be satisfied due to industry ordering habits, inflexible engineering approaches, and a lack of visibility for their supply chain. Inadvertent specificity continues to be a challenge. Since this is unlikely to be resolved in the next few years, low new vehicle inventory levels will remain for the foreseeable future.

In the past year, the ATP increased as incentive spending decreased. According to KBB, the average new-vehicle incentive was ~4.5% of ATP. The lowest in two decades. Even if higher rates occur, it will be gradual increases that are expected and it will not cause “decimated demand.” The outlook for vehicles in the next few years remains strong. There is excess demand through 2023. Automakers have shifted away from affordable vehicles to much higher margin vehicles.

 

[Klaus]

Yes, the supply issue overrides all.

It is clear that supply-driven price increases and shortages have caused over 4m units of lost production. As such, the auto industry continues to grapple with disruptions in sourcing key materials and components used in cars. Further disruptions will continue to exist and demand will not be satisfied due to industry ordering habits, inflexible engineering approaches, and a lack of visibility for their supply chain. Inadvertent specificity continues to be a challenge. Since this is unlikely to be resolved in the next few years, low new vehicle inventory levels will remain for the foreseeable future.

In the past year, the ATP increased as incentive spending decreased. According to KBB, the average new-vehicle incentive was ~4.5% of ATP. The lowest in two decades. Even if higher rates occur, it will be gradual increases that are expected and it will not cause “decimated demand.” The outlook for vehicles in the next few years remains strong. There is excess demand through 2023. Automakers have shifted away from affordable vehicles to much higher margin vehicles.

Maybe you want to get some? The wager above is available for you, too. Special price for Canadians is $2000. $500 to Sid, $1500 to me.

Or you can edumacate me on supply and demand and rates none of which do you possess even a basic understanding. Hint: I know a thing or two about these things.

 

[13COBRA]

You're the one suggesting prices will "never" again drop. Why the change in heart?

The bet is $500 and a new car that will cost you 0. Come on six figguh!!!

I'm not suggesting anything. What I've been stating is that the general price of vehicles WILL NOT GO DOWN.

I guess I should've been more clear. Do I think there's a chance that at anytime during the next 36 months, there may be a data point for sales price below where it is today? Sure. Do I think that in 3 years, the price of vehicles will be less than they are today? Nope.

I don't mind betting anyone $500, but I don't take bets that I have 100x's more chances of losing than I do winning. That would be similar to you playing Blackjack where the dealer gets traditional rules and you only get 1 card; would there be chances you could win (if the dealer busts), sure...but far more likely to lose.

 

[VRYALT3R3D]

Maybe you want to get some? The wager above is available for you, too. Special price for Canadians is $2000. $500 to Sid, $1500 to me.

Or you can edumacate me on supply and demand and rates all of which is clear that you do not possess even a basic understanding.

Your understanding of the auto industry is quite parochial.

Obviously you have a poor understanding of the industry's business model. A different paradigm clearly exists now. No automobile manufacturer is going to give up their current pricing power and revert back.

Perhaps if you had a better understanding of the challenges facing the supply chain, the shift in demand for CASE(Connected, Autonomous, Shared, Electric) vehicles, you will understand why your oversimplistic assumptions ignore many other factors that influence demand and supply.

 

[Klaus]

Your understanding of the auto industry is quite parochial.

Obviously you have a poor understanding of the industry's business model. A different paradigm clearly exists now. No automobile manufacturer is going to give up their current pricing power and revert back.

Perhaps if you had a better understanding of the challenges facing the supply chain, the shift in demand for CASE(Connected, Autonomous, Shared, Electric) vehicles, you will understand why your oversimplistic assumptions ignore many other factors that influence demand and supply.

It sounds like you really know what you are talking about. So are we on for the wager above?

 

[VRYALT3R3D]

It sounds like you really know what you are talking about. So are we on for the wager above?

I am willing to bet $2k USD that the average transaction price for a vehicle in the US will be higher in November of 2023 than November of 2021.

We can use Cox Automotive/KBB's data.

The average transaction price in November of 2021 is: $46,329

Eight Straight: New-Vehicle Prices Mark Another Record High in November 2021, According to Kelley Blue Book

New-vehicle prices increased further into record territory in November, including a modest increase from the month prior. According to new data released today by Kelley Blue Book, average...

mediaroom.kbb.com

 

[Klaus]

I am willing to bet $2k USD that the average transaction price for a vehicle in the US will be higher in November of 2023 than November of 2021.

We can use Cox Automotive/KBB's data.

The average transaction price in November of 2021 is: $46,329

Eight Straight: New-Vehicle Prices Mark Another Record High in November 2021, According to Kelley Blue Book

New-vehicle prices increased further into record territory in November, including a modest increase from the month prior. According to new data released today by Kelley Blue Book, average...

mediaroom.kbb.com

Got anything that details calculation methodology? I am not a simp so a link to a press release from a trade group is not useful. The reason that the FRED data is relevant is because it is objective and transparent.

 

[gimmie11s]

It sounds like you really know what you are talking about.

I lol'd

You know he's not game for any of it.

 

[13COBRA]

I don't like how the KBB price doesn't include incentives.

 

[Klaus]

I lol'd

You know he's not game for any of it.

I bet that you are not even familiar with CASE. I am an expert so I know that it stands for Connected, Autonomous, Shared, Electric. Get with the program.

 

[Klaus]

I don't like how the KBB price doesn't include incentives.

Yeah, but he is an EXPERT. What do you know about pricing cars?

 

[Tractorman]

I would say the bet would have to be over a 6 month period or so to make it more fair. Like, 6 month average over any period over the next three years. I get what 13Cobra is saying. He has 36 points to win, Klaus has just one.

 

[VRYALT3R3D]

I bet that you are not even familiar with CASE. I am an expert so I know that it stands for Connected, Autonomous, Shared, Electric. Get with the program.

I am glad you are learning!!!!

 

[Weather Man]

A fair bet would be is the purchase price of a base F-150 XLT crewcab gonna be higher in 3 years compared to now.

 

[13COBRA]

Yeah, but he is an EXPERT. What do you know about pricing cars?

Not much apparently lol

The true transaction price, sales prices minus incentives it what should be tracked. We [should] all agree that the sales prices (MSRP) won't go down, ever...never have.

A fair bet would be is the purchase price of a base F-150 XLT crewcab gonna be higher in 3 years compared to now.

Actually...not necessarily.

Every year, more and more becomes 'standard' raising the MSRP.

BUT, if anyone wants to take that bet, I'll go significantly higher than $500 on it haha

 

[Klaus]

I am glad you are learning!!!!

Meet Rosamund the sex robot. She too is Connected, Autonomous, Shared, and Electric. I now see why you are so familiar with CASE talk.

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[VRYALT3R3D]

Meet Rosamund the sex robot. She too is Connected, Autonomous, Shared, and Electric. I now see why you are so familiar with CASE talk.

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