Posted on 10/03/2019 10:59:03 AM PDT by Red Badger
Robert Loehr’s dealership is hanging in just fine, much like Fiat Chrysler Automobiles NV’s sales did last quarter. But just as investors doubt the U.S. car market can sustain near-record results for much longer, the Georgia retailer is apprehensive about a key issue: sticker shock.
“Prices are crazy on cars nowadays -- all of them,” said Loehr, who sells Jeeps, Rams and other Fiat Chrysler models from a showroom northwest of Atlanta and has been in the business for 35 years. “They’re crazy to me, and I do it every single day, all day long.”
New Jeep Gladiators -- the truck version of the rugged Wrangler model -- can easily fetch $50,000 and are emblematic of a trend toward eye-popping prices carmakers are commanding for the pickups and sport utility vehicles making up an ever-greater share of their sales. Even as manufacturers and lenders increasingly stretch out auto loan terms to more than seven years and subsidize interest rates with incentives, average monthly payments keep climbing.
Affordability could become more of a risk if the mounting concern that the American economy is headed for recession ends up panning out. Those fears drove the benchmark S&P 500 down more than 2% on Wednesday, to the lowest since August. General Motors Co. and Ford Motor Co. shares slumped by even more.
The U.S. car market has probably reached the end of a great run, according to Brian Irwin, who leads the automotive and industrial practice for consulting firm Accenture. “It’s a step down from where we thought we would be a few months ago,” Irwin said in a phone interview. “I expect to see stronger incentives coming out.”
For more on U.S. auto sales, click here for Bloomberg’s TOPLive blog
(Excerpt) Read more at finance.yahoo.com ...
I remember those days....also when you could get a hamburger, fries and a drink for $1 at McDonalds.
American consumerism is founded on massive debt which keeps people working longer hours to service.
If there were no such things as loans or credit cards, our economy would shrink by 60%. And we would not be headed toward a $23 Trillion dollar debt fueled economic collapse.
I think it was Freeper Travis McGee who kept posting the famous quote about societies with fiat money have to necessarily end with a catastrophic financial collapse. The economy tried to puke up its debt in 2008/09, and the Fed prevented it by foolishly printing money instead of just taking the hit and be done with it.
In 2005, the national debt was $8 trillion. It is almost triple that 15 years later. Good luck with that. There will be a world-wide catastrophic financial collapse that we set off.
It is not a matter of if, but when.
I bought my first F250 4x4 7.3 Diesel in 1993 (plain jane model without all of the luxury velour interior). Paid $16,300 brand new. The were asking $24,000 for the Ranger XLT packages (used to be the top of the line models) but I came across an ad from a Portland, Oregon Ford dealer for a $21,000 the same fancy models. I went in to my local dealer and asked for a comparable price on the truck I wanted they were listing for $21,000 and they about choked.
My final price of $16,300 included lifetime lube, oil, and filter changes. They quit doing that because they forgot to figure in the 12 quarts of oil every 3,000 miles was costing them big money.
$35k+ for a Jeep just seems a little much. $50k for a “Jeep Pickup” is nuts. You could get a decent Silverado for $50k.
Which is why I won't be trading in my perfectly fine 2011 Ultimate Driving machine.
Then car manufacturers caught on and started adding such accessories at the docks where the cars came in after import. Our business dropped. US manufacturers started including these items as standard equipment and prices went back up...and our business all but died.
Now, all the extra bells and whistles are keeping the retail prices way up. It's hard to find a new vehicle that doesn't have a security system, a backup camera, a 6 speaker sound system, a sunroof and all the little things that beep at you for whatever sensor gets tickled by a passing car, etc.
By the time they get “federalized” and try to pass the crash tests (none of which the ChiCom trucks can pass today) they will be the same price as the domestics
When I was a kid, I would get a 25 cent weekly allowance. I’d then go to the store and had a serous purchasing decision.
Candy bars were either a dime or a nickel size. I could buy two ten cent and one five cent, or three five cent and one ten cent, etc.
Hostess pies were 13 cents. So if I bought one, no matter what else I bought I would always have leftover change.
I never walked out of the store with a hostess pie.
I’m now 65 and still have a hard time saving money.
I don’t understand how people can afford these new vehicles...as we head into full retirement, I doubt we’ll ever buy a brand new vehicle again in our lives...
They could have done 7 years (also called a car mortgage)
Then add in tab fee in value of vehicle states plus insurance, etc.
Don’t forget the unions.
As far as comparisons go, they're not even the same vehicles. The JL is a 100% clean sheet approach.
Same situation with the new C8 Vette. A completely new car unrelated to the C7. You cannot even test drive one - dealers want deposits, then you take delivery sometime after Dec.
Tech is what is driving the price increases. Not just adaptive controls, but also finer tolerances in engine, trans builds, etc.
You can buy a new 30 ton dump truck in China for less than what a stripped pick-up costs here.
My 2004 F-250 with 254,000 miles is holding up really well, fwiw.
Nope, they sell them in other countries.
A year of so ago while checking out the new vehicles in the dealership while waiting on a recall fix I saw a Jeep with a $65,000 price sticker. That’s insane.
You can still special order new cars and trucks cheap
Few years back my wife special ordered her GMC 2500 4x4 HD w under a fleet code. Only option was AC and towing package top pull her 35 foot gooseneck horse trailer
Rubber floormats, roll up crank windows, no power seats, old style Am/FM radio, no Bluetooth or USB ports or touchtone screen, steel wheels (not aluminum/cast), manual mirrors etc etc
$18k less than optioned out truck same model.
We call that GM-itis. Knobs fall off, power windows, mirrors and locks stop working. That’s just the early stages.
To properly evaluate the cost of a vehicle, one must calculate ownership costs over the projected life.
Generally, even with a high level of maintnance the ownership cost per mile per year will decline over time. People get upset about spending money on repairs. That money is not a waste but rather a continued investment . The maintenance adds to the ownership cost but proper maintenance should not escalate the ownership cost to the level of a new purchase.
Operating costs are separate and although to be considered are not as important as ownership
The problem with vehicles is emotion, prestiege, appearance, covetness. If you wear a car or truck, then costs aren’t really a factor. Satisfaction for looking good becomes the issue. Hotness can be a factor even though hotness can seldom if ever be actually realized. The excess cost is pretty much unjustified based on usage.
Prudent purchase, Rigorous maintenance (on an aircraft level), longevity , all will produce the lowest ownership and operating cost over a period of say 10 years (or more).
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