What Happens When Automakers Make TOO MANY CARS?
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- Äas pĆidĂĄn 16. 06. 2024
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Today on the Daily News You Can Use, Ray and Zach discuss the latest new car inventory data and what happens for customers as a result of growing inventory levels. Tune in to learn more! - ZĂĄbava
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No dealers, no hassle, NO CRAP, serious savings. You forgot the crap part.
I remember back when the âbailoutsâ happened. Some manufactures was offering employee pricing, lifetime warranties, zero percent financing, push, pull or drag it in guaranteed trade in offers, thousands of dollars in incentives.
I donât think they have really felt the pinch yet or they are doing something different with those âleftover inventory â.
They should have never gotten a bail out.
You guys should do like a raffle or a give away prize of Ray spending the day with someone going to dealerships and negotiating a deal. It would be so fun to see him give some dealers a hard time đ
I'd go for that! If I were really in the market for a NEW car. All this pricing/financial fiasco has put me off buying cars from dealers.
Prices must come way down. They were quick to raise prices, time to drop prices.
can they make money with a lower price?
â@@subaruamazoncan they make money not selling cars?
@@subaruamazon Too bad if they can't. They caused this problem. Let them figure out how to get out of it.
Prices come down very slowly. Much slower than they go up.
Itâs not just the prices though. Iâd argue that the high interest rate is driving sales down more than the high prices.
the auto manufacturers have screwed their world up to the point the average person will not buy again.
Average person chanting China,China, China !!!!
â@UPdan nobody is chanting china but china. đđđđ
I was chanting for Chinese food earlier today
Greed is what has domed the auto industry. The auto makers figured that by reducing or eliminating the more affordable models of cars and focusing on the production of higher end cars that had more profit would make them more money which it did for a few years, however people have started to wake up and to push back on this $800.00+ card payment for 84 months which basically keeps the family broke and in debt slavery, then with high interest and high monthly insurance payment made many new cars unaffordable. Next we move to the cost of parts and service for these cars once they go off warranty and once again the family in thrown into a financial crisis trying to figure out how to pay for the $1000.00+ repair bill. Cars once needed for basically transportation for the majority of people have become a mental and financial drain on many due to the cost. People that want to drive a high end car go for it but I am not going to pay that high price for a car because I just want a safe reliable car to get me from point A to point B. Another problem is the over use of computer chips in cars, after about 10 years the chips for your car may not be available any more and if you are lucky you might find a used one but if you can't find one then as in many cases the car won't run and the owner is screwed.
I was just put in a situation where I had to buy a truck. I have been in the business since 88. I've never seen things as crazy as they are today. Was I going to pay 60k after discounts at 8% intrest? No chance. Or was I going to buy a used vehicle for 40k at 11% . No chance! I bought a truck I could afford, along with a 12 month loan payment. Don't tell me vehicles are un affordable. Your taste is unaffordable. Compromise for a year or 2 and let things settle down. This isn't brain surgery!
Uaw has to get theirs, if you can't afford to pay auto workers you can't afford an automobile
UAW will price themselves out of work. Having said that management does the same.
â@@Chris-bz6wlWhat percentage of the mark up from actual cost do you think goes to the people who build the cars?
@dentman67 curious what you ended up getting?
Overpaying CEOs and board members will always cost more than any UAW contract. Don't let rich pricks confuse you who the bad guy is
The price of cars has basically doubled in 5 years. A economic car is now $30,000 and just a "normal" car is $50,000
There are way too many hands from the manufacturer to the dealer that are being paid. It's no wonder prices are not indicative of the value received by the retail buyer.
That was why I bought a Tesla.
I am in your Dad's age range. My father was an auto mechanic in the 1960s - 1980s. He worked for all of the big three domestics. I played in the cars in the showroom as a kid. I really enjoyed seeing you and your Dad discuss cars from the young and older perspective.
Prices need to fall significantly. I'll check the market again next fall, but it's clear that at this time the sellers are still in denial. I have an 11 year old SUV that I'd like to replace, but I know that I could drive it for several more years.
So here's what I am wondering -- if the new-car dealerships are overloaded with rigs that aren't selling, why aren't manufacturers offering incentives to sell them? I mean BIG incentives -- the sort we used to see. Like zero-percent financing, big rebates, and so forth? The incentives we are seeing right now are ANEMIC -- no wonder cars aren't selling.
I would be willing to buy a car that has been sitting on a lot for two years if there is a big discount. Why aren't we seeing big rebates and low-interest offers?
I saw great deals on new 2023 Dodge Chargers at a Phoenix dealership a few days ago. Around $26,000!
Greed is the reason.
@@moonbeamskies3346 If Chrysler were to offer zero-percent financing, I would be at the dealership in a flash. There are incentives on some cars, but on the one I want they are insignificant.
In my region, there are several 2023 Chrysler 300s that are equipped with the 5.7L hemi. I love this car. I am on my second, and they won't be making any more of them. These have MSRPs of $54K, and the dealers are offering them around $47K. This includes the anemic Chrysler rebate of $1,750 for V-8 equipped 2023 models.
In pre-COVID days, the rebate would have been more like $6,000 by this point, and a "double birthday rig" sitting on a dealer's lot would be so drastically discounted that it would have been sold months ago. I sold cars in pre-COVID times, when cars sitting on lots more than 90 days were the exception and not the rule. I would have expected that a car sitting on a lot for two years would be selling for $10-$15,000 under MSRP. That's what happened at my dealership in olden times when cars lingered past their first birthdays.
I'm still interested. I would be tempted to go to one of these dealers right now and make an offer of $10,000 under MSRP. The way the market is going I probably would be able to settle around $45K. The problem is that I would still be paying an absurd interest rate, and I'd still wind up with payments around $700/ mo.
Just passed our local CDJR dealer. He took over a large closed restaurant lot to park over 75 unsold Jeeps and Gos knows what else. His own lot is wall to wall jeeps, dodges, Chrysler ( are there still any?) & rams.
The Mopar dealer near me is always slammed with models more than any other dealer I passed. Maybe confirmation bias.
I have seen that with a Lincoln dealer in Wayne, NJ - overflow lots are full including on a former restaurant site.
T hi s is called Karma! Unscrupulous dealers have been overcharging ( read â dealer markup â ) for years because of car shortages! Now the public gets its revenge! Make dealers & manufacturers eat their crow!
The cost of new cars combined with sky high insurance premiums has put new car purchases out of reach for most Americans. Dealership managers donât seem to understand the problem
" Something's got to give " ... Well, since prices are NOT dropping in MY neighbourhood ( southern Canada ) and used car prices continue to be almost as high as new car prices, the only thing left to give is for consumers to give up on the idea of replacing their cars ( unless money is no object ) and I'm sure that more and more people are investing in their existing cars to make them last longer. Go ahead, dealerships, make cars more and more and more expensive, all you're doing is creating another Cuba where older cars are kept on the road for longer periods. WE can't make YOU drop prices to affordable levels, but on the other hand, YOU can't force US to buy new cars. The consumer is the last link in the chain, guys. Maybe if all the dealers go out of business, then manufacturers can start to open up factory outlets like they should have been doing all along. We don't a middleman.
I like the way Ray explains stuff đ đ đ
I went to car edge for the first time thinking I would buy a truck through the site, but when it had pages of agreements I was suppose to read, I gave up. Soon as I saw the word monthly subscription, I was lost. I didnât read any further. I thought this was going to be simple. Apparently not sorry. Thanks for the videos though. I am enjoying them.
I did the same thing and as soon as I saw the words monthly subscription I lost interest immediately!
Just pay for the month your buying a car?
Grifters! Once people catch on. There gonna have to go get jobs as used car salesman!đ
The son never had a real job in his life...suckers listening to him like he's an expert. And the dad is a seasoned salesman.
I just paid for one month and then used the concierge service which likely saved me at least several thousand in avoided markups
As a guy living on a disability income I doubt I will ever be able to buy another new car in my lifetime. My wife works at a Ford dealership and although she gets a plan price and they have always worked with us, the cars have NEVER been $40-50K. Thanks for your show, I always learn something. If you ever need an experienced biller I know someone wanting to get out of the dealership LOL! Take care guys and Thanks.
I have not bought a new car and am not sure I will.
No worries. TeslaCab is coming.
I like the father & son relationship that they have itâs heartwarming †to see !
Yea itâs really feminine
@@CaliAAA72 bro what's your ish
Enjoyed this as always guys!!
Manufactures will only get worried once dealers are in such bad financial shape they refuse new inventory. I think thatâs happening to a small degree but it needs to be damn near industry wide for the car maker to panic.
That will happen in about 3 to 6 months
You canât sell something when no one has money to buy.
We have absolutely zero issues at our dealership. Very very happy with inventory levels !
OR do not finance. that is a rip off. pay cash.. if you can't afford to pay cash for the car, you can't afford the car.
Car dealerships are now just banks that happen to exchange cars for loans. Most sales people I'm talking to don't even bother to follow up since I'm not looking to finance.
Still high prices on new old stock. These OEM's will never learn. What? A 40% discount with a 60% markup? Buyers are getting smart.
Jeep may have a lot of inventory but my local dealer isn't offering any deals on them short of the $1500 manufacturer rebate. They don't seem to be too concerned about moving them.
They're not making too many cars. They are making too many of the wrong kind of cars. They are only making expensive cars and not adjusting to the market. The first manufacturer to adjust to this will make a huge impact.
I just love listening and learn from you both. I love the father son friendship. My sister in law is from Middletown . Not all bad happens in Middletown.. Keep up the great work!!!
I gave up on buying a new car, bought used from Enterprise. Got a good price, no add-ons, clean carfax. No more new car dealer games. At this point in my life itâs just transportation.
I was going to order a new BMW this week but I had a $1,500 emergency root canal today and it made sense why that's a no go. The expenses in life you don't see coming.
If a $ 1500 life surprise stopped you from buying a BMW , you're looking at to much car . Maybe a 5 year old Chev Spark would be wiser purchase.
@@scottenser464 Is that your way of saying I'm broke and can't afford it? Small-minded response.
You may not be broke, you just cannot afford a BMW...â@@jacobstrouble6631
I have been shopping for a truck for 3+ years.... they are still over priced by at least 35%.
When the mid size trucks get back down to mid to late 30s then we will know they have finally revamped their pricing structures.
My 2013 Audi was totaled late last summer and I started my car search. I decided to suspend it in October b/c, even with perfect credit, I was being approved for 5-6% interest rates when Iâm more accustomed to 0%. Said Iâd wait til things got back to normal. Never happened. Just pulled the trigger and ordered a new Tesla model Y for $18k less than last yearâs MSRP, $7,500 tax credit, $2k state ev rebate, and 0.99% interest rate. Not looking back - these dealerships are crazy!
Thought about a new Traverse. Bank is 6.24 % and their deal is 7.99%. Nope.
Paid off my 2022 rav4 in April. Toyota did a 1.7% note in late 2022.
Ray and/or Zach, OR ANYONE FOR THAT MATTER, can you explain to me how dealerships can sit on new, unused 2023 inventory and not lower pricing AT ALL? How is it possible? How does it make any sense to try and sell it without any type of price reduction or incentive to buy?
Something's gotta give. So why isn't anything giving?
The majority of their revenue is probably coming from interest payments, so not as much incentive to sell.
â@clericstorm2009 . That's a great point. Kinda like a Mortgage broker.
@@clericstorm2009 interest payments on unsold inventory????
Would love to see you do a video on how to deal with required Dealer Add-Ons--like theft protection etching. LoJack, iinterior/exterior "protection". There is a Checy dealer here i Arizona even wants a required add-on of $400 UNDERCOATING and $400 for 5 yr key replacement.
my dealer in murray ky named parker ford still had most all their 2023 Trucks, f 150s an same high pricing. the are just sitting on the Trucks, Trucks sitting on their lot over a year.
Rat food đ
Great video, Thanks!
Iâm happy with my 06 jeep commander and I still drive it like itâs some bad ass 2024 car Americans need to get their priorities straight ⊠you donât need a new car you can be happy with a 10+ year old
Dad sounds like the Smuckers spokesperson back in the day. Anyone is old as me will remember his voice.
Feel bad for a dealer? It's actually remarkable how much I don't care about any of them
Shoutout Middletown NY! 845!!
Maybe everyone read April's Automotive addition of Consumer Reports Magazine. Which you can get at your local Library.
No joke... Jeep is currently rated as the worst out of 34 brands listed.
If I could post pictures here, I would.
The window has opened. Just got a 2024 new Crosstrek at almost $1,800 off MSRP with no add-ons or products.
Well, they ripped everyone off for several years, now they can deal with their current situation. Considering average car prices are at or near 50k, how are average people supposed to afford these cars.
Taking advantage of people for 3 years caused a lifetime of hurt.
There's another local factor in pricing... Population growth. Here in Vegas and Phoenix, we have huge amounts of people moving here from Cali. This gives dealers new potential customers that don't know how scummy they are. If you walk out, they have two new potential customers to replace you. This is keeping prices high here in Vegas. Like I said in another video... The local Toyota dealers aren't honoring Toyota subsidized leases. The payment and down payment amounts they're offering are higher than what Toyota is advertising. Tried to get someone into a Corolla lease and two dealerships said the advertised payments didn't include all of their fees, so we'd have to pay those fees in cash to get the rate Toyota offered.
Ray, Thanks for sharing your story of the ride home from Middletown - life happens, I guess. Too bad Middletown had to take the blame, sort of.
There are discounts on the models people dont want or can afford. There are little discounts on low days supply inventory.
Love you guys!
Wow. I got 6.21% on my used purchase in Oct 2023. Crazy on the average rates.
Cover using the CarEdge car buying service please when there's a waiting list for a model ( eg Grand Highlander Max)
Nissan of Roseville California called me today and I told them I would just stay in my under water 2015 RAV4 đ€·đ»ââïž
People may be able to afford a car, but the experience is like walking into a den thieves. I have to give Zach kudos for tolerating the bs when he calls dealerships. Iâve been purchasing cars for 50 years, I have an extremely low bs tolerance, I would have told them off.
No one needs to make an executive salary of more than a million. Ever.
My hometown stellantis left this location last week and thereâs a new ram dealer here!
Stellantis boss blames his âarroganceâ for failing to spot 3 mistakes that led to a double-digit sales decline in the U.S.
I remember local dealer sold PT cruisers when they first came out 1500 over window sticker and sold a bunch 2 years later they were worth 1/3 of the window sticker price They were also selling Prowlers 5000 over sticker but they could not get too many of them. A lot of big profit over the years. and dealer owner bought property big mansions and a yacht
This is what happens when car manufacturers MIS-PRICE what they are selling. GREED is NEVER GOOD.
Just saw the Hornet R/T ad for no payment for the first 90 days. They must think people are stupid. Seriously no payment for 90 days. That's their deal. They are finished!
Why spend tons of money on sub par vehicles with tons of problems and recalls?
I bough a 05 toyota crown majesta, air suspenion heads up display v8 engine only 40k miles will last me another 20 years.
Thank you!
A lot of people are buying in Atlanta, and I see a lot of cars with drive out tags.
I live in Atlanta our car market is steady im waiting on the deals đ
I want to point out something interesting that I have noticed in the comments⊠Everyone is complaining about how expensive cars are these ( and I agree ) but at the same time some of the cars people are looking for outrageously more than people actually need. As a society we have taken to thinking that in order to get our spouse and our 1.5 children and a dog from point A to point B, that you must have a three row SUV with a V8. This is a lifestyle choice that can be met in many different ways. Youâre not going to lose your man card by opting for a Honda Pilot over a Denali, Tahoe or whatever. or hell for about half of the people out here what you really âneedâ is a CRV, an Outback or a Trailblazer. ( not recommending any of those ⊠just using them as size and price examples )
most of us don't even think about how much less expensive things COULD be if we were willing to buy a 4 year old car that meets our actual needs.
Suv an base model trucks 35k avg price of new vehicles 50k an up. Simple math sales going down an layoffs at auto plants are coming soon.
Tks. much
Currently shopping for a pick up. Interested in Fords. And all dealers across my state has numerous trucks just sitting. Offer $10,000 in discounts then add it all back on in fees. When I call them on it, they get mad and go silent. I will wait a month if I have too. Iâm waiting them out to capitalize on their misfortune
Toyota/Lexis seems to be the smartest ones with 31 day inventory average. That can very from model to model and may not count the ones with engine problems on hold from sales. We know some models were subject to supply chain issues. Also I recall your reference that for the last 2 or so years Toyota has intentionally worked hard to keep dealer inventories down to keep up prices. Also note Subaru, Kia, Hyundai, Chevy even Buick are doing well. Of course that may vary from model to model, perhaps with the cheapest models at very few days inventory or 'on the truck' while other models are collecting dust. It is interesting that Mazda has such high inventory nationally. Some regions where more popular may have lower inventory. They are offering cash, leasing, 'conquest' and low 0%-1.9% interest on shorter term Mazda Credit depending on the model, equipment levels. As to the Middletown, NY Mazda dealer, they are about 70 miles from NY City, north of the NJ State line.
I had my truck at chevron dealer and two days they were in there all day with all the members doing meetings with gm bosses and banks all day
It appears that the 17% of the market that can afford a new vehicle is all that is needed to make a profit both at the manufacture and dealer levels. I talked with a local dealer yesterday and they said that they sell mostly trucks and they are very busy. It seems many of the 17% club pay cash for their vehicle purchases, so interest rates are not a concern for that group of buyers. The sky is not falling in the automotive world as some want you to think! It's just getting back to business as usual.
How much of what you see in days of inventory is buyers waiting for clarity on hybrid, phev, ev versus gas and timing, and how much is interest rates and fear
Grand Cherokee selling below msrp. In Detroit area.
I don't think prices are going to settle down at least on trucks and SUVs. The reason is the federal government keeps tightening CAFE standards so manufacturers have to make ever more efficient vehicles and trucks are by nature inefficient. So manufacturers have to make fewer total trucks, this causes them to only make high end expensive trucks.
I've been looking for a rav4 hybrid xse for months, dealers are adding ridiculous charges for things like window tint! What out the door price is good?
Really enjoy your channel. However, the vehicle Iâm looking for in the 500 mile radius of Chicago seems to be a unicorn. Therefore no deals. GMC Denali 1500 truck with 3.0 diesel. I guess Iâll continue to wait until the 25âs start showing up
Are you talking new or low mileage used? I took a quick look at used and youâre right⊠I think you want a unicorn ⊠there seems to be only 17 diesels nation wide w
@@MurderMostFowl hi. Thx for the note. Iâm open to low miles used or new. Saw the MN truck.
has there really ever been a situation like this - put blame aside (greedy dealers / financial institutions + motivated [generous term] buyers) = where we are...too many cars and at least 3 all new inventory model years colliding...when do the lines of what they made during the pandemic (obscene profits) cross with where they are now (very few profits) - and what do they do?
Iâve been shorting STLA Iâm currently up around 500% . GM looks to be in a good spot to
Short as well.
There are some better prices coming down the line we just purchased a Nissan Pathfinder they had 2.9 for 60 with an incentive that was always a ether or incentive or low interest situation in the past. The price of the vehicle was also very negotiable as well. Prices are coming down on specific models but you gotta do some research and be aware that they need sales you can negotiate itâs a buyers market again.
Not too many cars- it is too many of the wrong cars. Too many higher trim models and even the few base models produced are being priced too high at MSRP. There are plenty of new car buyers but not enough affordable product. If these cars averaged 32k they would be selling. Some priced higher-some priced lower than 32k and the car industry, both new and used would be booming.
to many trims opts exp Toyota models ... 4runner, Tacoma ,tundra ,sequoia .... sr, sr5, sr5 premium , trd sport, trd off road, trd off road premium ,trd pro ,and more than one luxury trim limited , platinum ,1794, 1794 limited edition , capstone
It won't matter pretty soon. If the nation goes into depression, very few will be buying anyway. The last wave wave of inflation wiped out the majority of the middle class. The poor haven't been buying new cars for years. This leaves only the upper class buying cars. In light of the recent auto strike increases coupled with the drastic reduction of the former middle class consumers, auto manufacturing companies will be lucky to not go out of business since there are at least ten times more people in the middle and lower class of people than there are in the upper class. The auto manufacturers will either build inexpensive, reliable vehicles in the near future or sell out to those in the upper class. If they continue their recent trends, they will go broke.
This is a direct result of CEOs listening to their wealthy friends rather than listening to their customers. It's been the norm since before foreign imports were introduced in the US. If they had catered to the general public rather than those with the most money, there wouldn't have been a market for foreign cars in the US. But wealthy people prefer those like themselves like other classes of people do. I have watched this happen in all the business sectors of the nation and now the wealthy friends have sprung their trap. It may be that these fake wealthy friends wanted to take their business all along.
Here I'm Hampton Roads on the b popular models. I don't see any prices dropping.
I think Nissan is an outlier. They are desperate to unload stuff because they know they build terrible cars. The build quality isn't the Nissan of old.
Itâs that CVT engine. Nissan doesnât hold value either.
Get about 10 phone calls for every car I save. So I know the land sharks are hungry.
Does anyone else listen to Dad and think of the brothers on Car Talk? Tom and Ray Magliozzi. Click and Clack the Tappet Brothers. Maybe Iâm just old.
Tesla turnover has doubled from 8 days to 16 days! Media reports, "EV sales are crashing!" Ram has 1,000 days inventory. Media says nothing.
Update us on Porsche 911 prices and the market....HIGH,LOW? time to Buy?
Will Ford motor company lower interest rates on new suvs ? Thanks. Love the videos !
Prices still up in Tennessee
We need to get rid of dealers.
Prices are only rapidly increasing in California, at all levels. EVs, new, used. Relentless spiral upwards.
They aren't lowering prices in WA state I can wait
It's called supply and demand. But what keeps me from buying a new car is all the fees the dealers charge you! It's insane! I know you have videos for that, however, I'm wondering if they will ever get away from not including all the fees in the prices they advertise?
The graph you are showing at 20:54 tells me something ---- the crash has not begun yet The blue line needs to take a steep drop south
They run them through a car crusher - really Hynndai did that because they have new cars that were 4-5 years old. Start Up in Montgomery Alabama.
What happen is the market drive the price down, because of the excess of offers...
I disagree. Itâs not bribery, itâs extortion.
Only bad automakers make to many cars. The good one like Toyota and Honda don't make them enough?
The motorcycle market is still out of its mind also. '22s at msrp + freight + setup... covid affected/warped dealers minds...
I'm seeing more motorcycles on the road than ever at least around my city. I figure guys can't afford cars so they are buying bikes, but who knows.
Ford could offer longer engine warranties since they seem to fail all the time with the hybrids. Something like 200k with no time limit I'll give them another look. They need to build their brand back up after they burned it to the ground
You're asking ford to poorly conduct business at a loss so you can get an unreasonable value. With that logic why not just remove warranties entirely, and Ford can just send you a new one for free when you get tired of it? It's probably just better to appropriately weigh your risks as a consumer and choose what's best for you, maybe it isn't Ford
Hey Ray,
Is that the Bulova Military watch your wearing?
It is not. It is a Seiko. Men's SNK805 SEIKO 5 Automatic Stainless Steel Watch with Green Canvas. I bought it 4 years ago for $100 at Amazon. All the best, Ray