"Cheap" new basic truck is $27,500!

[drkelly]

I’m just sitting here wondering if prices will level off at all. We will be going on two years of people paying ceiling high prices. Surely manufacturers are going to figure out a way to keep the car prices sky high.

Keep supply down even if chips and employees come back?

I was reading an article recently about how much money Ford was missing out on making due to the chip shortage. They want to sell as many trucks as possible. I believe that once the chip shortage is resolved, that prices will return to normal. Unfortunately that is probably going to take 1-2 years.

 

[mbalbritton]

And what’s “normal”? Because to me, Normal prices of trucks haven’t been seen in decades.

the other day one of you was talking about trading in your 2-3 year old truck for a new $78k truck… $78k!!!! My first home was $78k! And that’s probably an average price for a new full size truck. That’s fucking insane. I often wonder if I’m the one who doesn’t know the value of a dollar or is it everyone else.

 

[ManglerYJ]

And what’s “normal”? Because to me, Normal prices of trucks haven’t been seen in decades.

the other day one of you was talking about trading in your 2-3 year old truck for a new $78k truck… $78k!!!! My first home was $78k! And that’s probably an average price for a new full size truck. That’s fucking insane. I often wonder if I’m the one who doesn’t know the value of a dollar or is it everyone else.

When I was a senior in high school, you could buy a brand new (1990) Jeep Wrangler complexly stripped down (4 cyl 5 speed, no rear seat, no carpet, no radio soft top) for $8888. Was supposed to be my graduation present, but my mom insisted that they got me something that my grandmother could get into "if she had to" . Ended up with an 89 Dodge Daytona with t-tops and A/C and grandma never even saw it.

 

[CLRracer]

There was a time when long term car financing was 12 months.

Duane

 

[Loganwayne]

And what’s “normal”? Because to me, Normal prices of trucks haven’t been seen in decades.

the other day one of you was talking about trading in your 2-3 year old truck for a new $78k truck… $78k!!!! My first home was $78k! And that’s probably an average price for a new full size truck. That’s fucking insane. I often wonder if I’m the one who doesn’t know the value of a dollar or is it everyone else.

ya but that same house is probably over 200,000 and you wouldnt even have to have it updated from when you bought it

 

[drkelly]

And what’s “normal”? Because to me, Normal prices of trucks haven’t been seen in decades.

the other day one of you was talking about trading in your 2-3 year old truck for a new $78k truck… $78k!!!! My first home was $78k! And that’s probably an average price for a new full size truck. That’s fucking insane. I often wonder if I’m the one who doesn’t know the value of a dollar or is it everyone else.

When I post about 'normal', I just mean pre-Covid and stimulus. I agree truck prices were retarded before Covid. Now they are full retard. I was looking to upgrade my truck pre-Covid and couldn't stomach the prices. I may be stuck with my 20 yr old truck until I am dead.

 

[doc]

When I post about 'normal', I just mean pre-Covid and stimulus. I agree truck prices were retarded before Covid. Now they are full retard. I was looking to upgrade my truck pre-Covid and couldn't stomach the prices. I may be stuck with my 20 yr old truck until I am dead.

Never go full retard! (love that movie)

But seriously, prices were nuts before & have only gotten worse lately...I refuse to go over 60-months on a loan on a new ride. My '17 is oh so very close to being paid off & I feel it will be my truck for quite some time vs. buying another new one.

 

[NickMaul]

When I post about 'normal', I just mean pre-Covid and stimulus. I agree truck prices were retarded before Covid. Now they are full retard. I was looking to upgrade my truck pre-Covid and couldn't stomach the prices. I may be stuck with my 20 yr old truck until I am dead.

I’m about to roll over 225k on a 4.0 WJ. Pre COVID I swore I was going to sell it and hop into a reasonably priced new truck.

Now I am fixing all of the things it needs to make it another 20k. I’m ready to buy a new ride I don’t have to worry about fixing every other month.

 

[DSM Turbos]

Cars used to only last 5 years and then were steaming piles of shit at that point, so the longer the car lasts the more willing you are for a longer payment - at least that is how some will justify it

Car manufactures also in a way are loving the chip shortage, profit per vehicle is way up, sure they sell a little less but they are making more money right now per car

 

[LBarr2002]

Cars used to only last 5 years and then were steaming piles of shit at that point, so the longer the car lasts the more willing you are for a longer payment - at least that is how some will justify it

True, but I feel early 2000s were the height of vehicle reliability with simplicity. There's so much tech in new vehicles that while they are generally reliable any issue out of warranty could be seriously expensive.

I love my GMT800s and plan to keep them going forever...

 

[Jody Treadway]

And what’s “normal”? Because to me, Normal prices of trucks haven’t been seen in decades.

the other day one of you was talking about trading in your 2-3 year old truck for a new $78k truck… $78k!!!! My first home was $78k! And that’s probably an average price for a new full size truck. That’s fucking insane. I often wonder if I’m the one who doesn’t know the value of a dollar or is it everyone else.

It wasn't quite $78k, get your numbers right!
My trade difference was like $16k. They were shocked when I didn't spring for the 84 month terms on the balance. It's astounding.
Side note: they gave me $60k for my 2020 Tradesman (lame ass truck according to @braxton357) when you can go 5 miles down 176 and buy a brand new one for $58k. Was on their lot for $64k and was gone in 3 days.
I don't fully understand the dynamics of new/used car sales these days.

 

[paradisePWoffrd]

I get it. Every now and again me (CFO/COO) who drives a 13 year old lincoln, the company president who drives a 7 year old 150 and the majority partner who drives a 5 year old explorer, talk about putting on a financial clinic for the employees, usually after we look at the parking lot. Maybe everyone else is better with money than us, everyone is entitled to spend where they so choose, vehicle driven is not indicative of the quality of person, but damn...I must be paying everyone too damn well, or they're not eating regularly...because I sure as hell wouldn't want their payments.

Part of me wonders if the length of payments, and so many being upside down, are part of what keeps the used truck prices high. I mean $40k+ for a truck with 150k on it. The depreciation numbers have to come from somewhere, and who better but lenders or underwriters. If they control the depreciation value, they can control their risk, and also increase profits because people will borrow more $$ for new and used.

 

[DSM Turbos]

True, but I feel early 2000s were the height of vehicle reliability with simplicity. There's so much tech in new vehicles that while they are generally reliable any issue out of warranty could be seriously expensive.

I love my GMT800s and plan to keep them going forever...

Early 2000s still had a lot of transmission issues in a lot of cars, but overall agree

I completely agree, all the electronics scare me now, I didn't get a fancier car partially due to that (2019 Accord), and I am still debating an extended warranty because of it

 

[Bebop]

Car manufactures also in a way are loving the chip shortage, profit per vehicle is way up, sure they sell a little less but they are making more money right now per car

Fuck no we don't.
3 shutdowns since January in our plant alone. We're begging the chip manufacturers everyday in various meetings etc.
I promise nobody loves it and want to go back to normal more than us.

 

[DSM Turbos]

Fuck no we don't.
3 shutdowns since January in our plant alone. We're begging the chip manufacturers everyday in various meetings etc.
I promise nobody loves it and want to go back to normal more than us.

This is what I was referring to, slightly different I guess.

Dollar Signs: Computer Chip Shortage Drives Record Auto Dealer Profits

A computer-chip shortage and high consumer demand for cars and trucks are driving high prices. Dealers, automakers and auto lenders are cashing in.

www.forbes.com

 

[UTfball68]

This is what I was referring to, slightly different I guess.

Dollar Signs: Computer Chip Shortage Drives Record Auto Dealer Profits

A computer-chip shortage and high consumer demand for cars and trucks are driving high prices. Dealers, automakers and auto lenders are cashing in.

www.forbes.com

Yeah…but the problem remains the fact that there’s still a minimum revenue requirement, regardless of margin per unit. Sure they may have added another $5k/unit. Thats well and good, but they still have bills to pay. Bigger bites of a smaller apple, doesn’t mean you ate more.

 

[CasterTroy]

Fuck no we don't.
3 shutdowns since January in our plant alone. We're begging the chip manufacturers everyday in various meetings etc.
I promise nobody loves it and want to go back to normal more than us.

This

Don Flow just cancelled renovations on 3 floors of his new headquarters downtown. We've done the upfit and shell of everything in that building for the last 5 years and it's all come to a dramatic stop.

Kernersville dodge also canceled a very large renovation/take-over we've been in the works for over the last 2 years....for the same reason

 

[Bebop]

This is what I was referring to, slightly different I guess.

Dollar Signs: Computer Chip Shortage Drives Record Auto Dealer Profits

A computer-chip shortage and high consumer demand for cars and trucks are driving high prices. Dealers, automakers and auto lenders are cashing in.

www.forbes.com

Record profit per car, sure. We had to adapt in order to make as much money as possible given the circumstances.
But remember that the auto industry makes money on volume, and we're way low compared to "normal".

 

[DSM Turbos]

Yeah…but the problem remains the fact that there’s still a minimum revenue requirement, regardless of margin per unit. Sure they may have added another $5k/unit. Thats well and good, but they still have bills to pay. Bigger bites of a smaller apple, doesn’t mean you ate more.

but ford at least is trying to learn from this and deliver more on demand and keep less on the lot to keep margins higher, but we will see how that works out in the long run, I bet they abandon that.

 

[jeepinmatt]

True, but I feel early 2000s were the height of vehicle reliability with simplicity. There's so much tech in new vehicles that while they are generally reliable any issue out of warranty could be seriously expensive.

Agreed! Look under the hood of a late 80's Jeep 4.0 and you can't even see the engine. But under the hood of my 2000 TJ is pretty clean, simple and accessible.

Early 2000s still had a lot of transmission issues in a lot of cars, but overall agree

But back then you could still get a proper manual gearbox in anything that mattered

 

[UTfball68]

but ford at least is trying to learn from this and deliver more on demand and keep less on the lot to keep margins higher, but we will see how that works out in the long run, I bet they abandon that.

Yeah…JIT works better in some industries than others. Completely speaking off the cuff here, but GM always seems to have more on hand inventory the Ford, and I’d suspect in this scenario, where there’s an inventory shortage, they held on to normal operating procedures a bit longer. But since they’re not as lean, when they reach(ed) the the end of their rope, it’s a much harder fall. I haven’t looked at balance sheet trends for either, so maybe I’m completely wrong on how they've weathered the storm, but if I were a betting man, I would have bet on GM sales/inventory being better sustained than Ford’s, with a greater impact to GM once they ran out.

 

[DSM Turbos]

But back then you could still get a proper manual gearbox in anything that mattered

I'm older now, I value the auto!!

 

[doc]

But back then you could still get a proper manual gearbox in anything that mattered

Still miss the manual F-150's, etc

 

[Tom@Hilltop_Machine]

Thought this would be a good read here.

 

[RatLabGuy]

Fuck no we don't.
3 shutdowns since January in our plant alone. We're begging the chip manufacturers everyday in various meetings etc.
I promise nobody loves it and want to go back to normal more than us.

This is what I was referring to, slightly different I guess.

Dollar Signs: Computer Chip Shortage Drives Record Auto Dealer Profits

A computer-chip shortage and high consumer demand for cars and trucks are driving high prices. Dealers, automakers and auto lenders are cashing in.

www.forbes.com

Time for some math... if you make 10% more per unit, but sell only 90% your normal volume are you making more or less money?
That articale conveniently overlooks the decreased annual totals.