Originally Posted by CoachKandSportsguy (Post 2020885)

That's great if you have time, and don't need car transportation for any kind of income or food shopping. . . . however, retired people account for about 20% of the population. . so the remaining 80% probably need vehicular transportation for one of the just two items above. Waiting 6-10 weeks is not a viable option for that scenario.

However, to be fair to the dealerships, they have fewer and fewer used cars to sell for several reasons:

Carvana is bleeding shareholder cash to overpay for trade ins, and sell them, driving up the price of used cars and removing them from dealership lots. Yes, i was short CVNA from near their all time high, and covered recently for a nice profit. Looking to go short again at a higher price prior ti earnings or in response to a good earnings call which can't keep going.

Rental car agencies did not purchase as many new fleet cars due to the reduction in business travel, so there are less used fleet cars available.

With the price of used cars significantly higher, leased cars are getting purchased by the leasee at the end of the lease, and there are fewer lease returned used cars available.

Finally, with the work from home for the significant IT and corporate wage slaves, there is a huge drop in car usage, and the resulting mileage aging, so the initial car purchase turnover has extended the time to need a new car from purchase, and so new car trade ins for another new car has slowed down as well.

from a new car point of view, the port of LA had a rule that empty containers could not be stacked more than two high, which caused a reduction in container throughput as the empty containers were not returning to the far east as quickly as in the past. . . that changed last week as that cause was identified as one of the current throughput issues of pre assembed car parts. But then there are trucking issues created by Amazon. Amazon creating warehouses and requiring local delivery fleets, draws employees from the long haul trucking pool. Why?, trucking types who want to sleep at home every night for regular sex instead of on the road have a more appealing work option for about the same amount or slightly less money in warehouses or local delivery fleets.

Put that all into the macro economic blender, used cars have a higher margin at dealerships than new cars. With fewer used cars are available and are being sold at dealerships, along with fewer new cars as well, requires a higher margin at sales time to pay for the fixed dealership costs. . fewer unit sales to cover fixed costs always requires more margin, (prove me wrong - find me any physical sales business that doesn't have this issue which is not a niche industry)

So to be fair to dealerships, trying not to go out of business or declare bankruptcy, there are very real reasons for increased margins for survival, and they are trying to survive in very trying times. . . so sure, calling it ripping you off makes it easy to accept, but i suspect that there will be a small wave of car bankruptcies in the near future as a result of severe pre-pandemic behavioral cycles which have been truly disrupted and require several years to return to normal, or some other financial event related to cars sometime next year.

As i typed in the penglobal thread, best conclusion is to keep your car in good working order, and try to avoid any accident, as you won't have an easy time getting a replacement vehicle quickly and cheaply. Avoiding accidents is tough, but that means driving a bit more defensively. . . or using your golf cart more, but the same goes for golf carts around the country.

finance guy

Originally Posted by retiredguy123 (Post 2020892)

Car dealers are notorious for charging different prices to different buyers for the same vehicle. In normal times, this difference can be as much as $4,000 for an average vehicle, depending on the knowledge and resourcefulness of the buyer. In the current market, I suspect that car dealers are very happy to take advantage of uninformed buyers, to expand the price difference from $4,000 to an even more inequitable price difference. I think it is shameful that car manufacturers have not developed a fair pricing system for their product, like almost every other product retailer.

Originally Posted by CoachKandSportsguy (Post 2020885)

That's great if you have time, and don't need car transportation for any kind of income or food shopping. . . . however, retired people account for about 20% of the population. . so the remaining 80% probably need vehicular transportation for one of the just two items above. Waiting 6-10 weeks is not a viable option for that scenario.

However, to be fair to the dealerships, they have fewer and fewer used cars to sell for several reasons:

Carvana is bleeding shareholder cash to overpay for trade ins, and sell them, driving up the price of used cars and removing them from dealership lots. Yes, i was short CVNA from near their all time high, and covered recently for a nice profit. Looking to go short again at a higher price prior ti earnings or in response to a good earnings call which can't keep going.

Rental car agencies did not purchase as many new fleet cars due to the reduction in business travel, so there are less used fleet cars available.

With the price of used cars significantly higher, leased cars are getting purchased by the leasee at the end of the lease, and there are fewer lease returned used cars available.

Finally, with the work from home for the significant IT and corporate wage slaves, there is a huge drop in car usage, and the resulting mileage aging, so the initial car purchase turnover has extended the time to need a new car from purchase, and so new car trade ins for another new car has slowed down as well.

from a new car point of view, the port of LA had a rule that empty containers could not be stacked more than two high, which caused a reduction in container throughput as the empty containers were not returning to the far east as quickly as in the past. . . that changed last week as that cause was identified as one of the current throughput issues of pre assembed car parts. But then there are trucking issues created by Amazon. Amazon creating warehouses and requiring local delivery fleets, draws employees from the long haul trucking pool. Why?, trucking types who want to sleep at home every night for regular sex instead of on the road have a more appealing work option for about the same amount or slightly less money in warehouses or local delivery fleets.

Put that all into the macro economic blender, used cars have a higher margin at dealerships than new cars. With fewer used cars are available and are being sold at dealerships, along with fewer new cars as well, requires a higher margin at sales time to pay for the fixed dealership costs. . fewer unit sales to cover fixed costs always requires more margin, (prove me wrong - find me any physical sales business that doesn't have this issue which is not a niche industry)

So to be fair to dealerships, trying not to go out of business or declare bankruptcy, there are very real reasons for increased margins for survival, and they are trying to survive in very trying times. . . so sure, calling it ripping you off makes it easy to accept, but i suspect that there will be a small wave of car bankruptcies in the near future as a result of severe pre-pandemic behavioral cycles which have been truly disrupted and require several years to return to normal, or some other financial event related to cars sometime next year.

As i typed in the penglobal thread, best conclusion is to keep your car in good working order, and try to avoid any accident, as you won't have an easy time getting a replacement vehicle quickly and cheaply. Avoiding accidents is tough, but that means driving a bit more defensively. . . or using your golf cart more, but the same goes for golf carts around the country.

finance guy

Originally Posted by Singerlady (Post 2021223)

How about the differences in a dealership’s local, city, county taxes and overhead costs depending on their location? Food doesn’t cost the same in every Publix grocery store, for example. Just sayin….

Originally Posted by retiredguy123 (Post 2020921)

My only point is that, when you go into most retail stores, customers expect to see a price that everyone pays. Americans tend to like and accept that pricing system. They don't want to argue with the Best Buy salesperson about the price for a television or the Publix cashier about the price of tomatoes. The advertised price is the price. I think that a similar pricing system for vehicles would be well received, if it were implemented fairly by the car manufacturers. If the current vehicle market has a shortage, why haven't the manufacturers adjusted the MSRP to account for it? They know how many fewer cars they are making. I suspect the reason is that they want the dealers to be better able to take advantage of customers who have no way to determine a fair price in a difficult market. Many people think that car dealers are dishonest, and they often feel intimidated and cheated by them.

Originally Posted by retiredguy123 (Post 2020892)

Car dealers are notorious for charging different prices to different buyers for the same vehicle. In normal times, this difference can be as much as $4,000 for an average vehicle, depending on the knowledge and resourcefulness of the buyer. In the current market, I suspect that car dealers are very happy to take advantage of uninformed buyers, to expand the price difference from $4,000 to an even more inequitable price difference. I think it is shameful that car manufacturers have not developed a fair pricing system for their product, like almost every other product retailer.