Auto Prices Are Too Damn High Topic!

[Deanh]

13 minutes ago, ice-capades said:

 

Agreed. Whatever the final terms are for the new UAW contract, you'll see an immediate impact on vehicle MSRP's. 

which will most likely effect sales totals...here comes the Domino effect and Id say manufacturers such as Tesla, Kia, Hyundai and Toyota will be printing their own money....and laughing all the way to the Bank...

[tbone]

10 hours ago, ice-capades said:

 

Agreed. Whatever the final terms are for the new UAW contract, you'll see an immediate impact on vehicle MSRP's. 

That cost is going to have to go somewhere. I don’t see how they can just absorb it, so will be coming to the consumer. 

[jpd80]

3 hours ago, tbone said:

That cost is going to have to go somewhere. I don’t see how they can just absorb it, so will be coming to the consumer. 

Yet, no one thinks that Ford has been building in price increases well before the UAW contract negotiations began, they knew this was coming and started jacking up prices for the past year.

 

I will be interesting to see how the competition react, will they seek to undercut Ford prices or will they raise theirs as well…..

Edited October 5, 2023 by jpd80

[silvrsvt]

4 hours ago, jpd80 said:

Yet, no one thinks that Ford has been building in price increases well before the UAW contract negotiations began, they knew this was coming and started jacking up prices for the past year.

 

I will be interesting to see how the competition react, will they seek to undercut Ford prices or will they raise theirs as well…..

 

Or its just a wash with inflationary price increases over the past few years. 

 

In the grand scheme of things I think most workers will find themselves in the same situation financially due to other influences...they'll break even vs getting ahead. 

 

I still can't wrap my head around people paying $1000-1200 a month for a 60K car (assuming they aren't putting any money down) when a typical mortgage or even renting an apartment in the US is $1,700~ a month. 

 

So basically the household income would need to be over well $100K a year to be able to "afford" that. 

[jpd80]

28 minutes ago, silvrsvt said:

 

Or its just a wash with inflationary price increases over the past few years. 

 

In the grand scheme of things I think most workers will find themselves in the same situation financially due to other influences...they'll break even vs getting ahead. 

 

I still can't wrap my head around people paying $1000-1200 a month for a 60K car (assuming they aren't putting any money down) when a typical mortgage or even renting an apartment in the US is $1,700~ a month. 

 

So basically the household income would need to be over well $100K a year to be able to "afford" that. 

That’s more or less happening all over the globe. Ford has know labor price increases were coming, I’m sure at least some of that was already factored in.

 

Everywhere, the greedy are continually jacking up prices, where I live, some grocery items keep going up every fortnight  and it makes me wonder just how far the market will be tested. 
 

Mind you, Ford just had a decent month here in Australia selling a record number of Rangers and Everest. Combined, they represent close to 7,400 of the 8,015 total sales, just 16 behind Mazda at 8031. Toyota was still way out in front with 20,000 sales. Down here, they can’t unload the boats fast enough, just about everything is presold 6-12 months in advance although some floor stock and demonstrators exist.

Edited October 5, 2023 by jpd80

[silvrsvt]

12 minutes ago, jpd80 said:

Everywhere, the greedy are continually jacking up prices, where I live, some grocery items keep going up every fortnight  and it makes me wonder just how far the market will be tested. 

 

I have a friend who works in the mortgage industry and they mostly do lending to state employees (cops, civil servants, etc-people who have decent jobs) and the stories he tells me are insane-people refinancing their house to cover almost six figures of credit card debt or people just refinancing their houses every few years due to all the debt they get into. 

 

You have to wonder at what point does this get really messy?

[akirby]

7 hours ago, jpd80 said:

Yet, no one thinks that Ford has been building in price increases well before the UAW contract negotiations began, they knew this was coming and started jacking up prices for the past year.

 

I will be interesting to see how the competition react, will they seek to undercut Ford prices or will they raise theirs as well…..

They jacked up prices due to supply and demand which will swing back the other way at some point.  If you increase fixed costs and then have to lower prices you’re in deep shit.

 

It’s not as simple as Ford made $10B last year they can get by with $5B.  They’ve been around 4%-6% margin until recently when it went to 8% but that was due partially to price increases.  Once you get down to 3%-4% investors become wary, stock prices fall, credit gets more expensive and you’re one price war or economic downturn away from bankruptcy.

[silvrsvt]

Speaking of MRSP increases

 

https://www.caranddriver.com/news/a45455826/2024-ford-f-150-pricing-revealed/

 

F-150 is going up, but nothing astronomical. 

[ice-capades]

8 minutes ago, silvrsvt said:

Speaking of MRSP increases

 

https://www.caranddriver.com/news/a45455826/2024-ford-f-150-pricing-revealed/

 

F-150 is going up, but nothing astronomical. 

 

An increase of $2,735 for the base model isn't exactly small by any measure of typical Model Year increases. It may be justified by Ford's marketing department based on standard equipment adjustments or other factors but it's still a sizeable increase. Ford and the other "Big 3" OEM's will always price their vehicles at the highest prices that the market will bear, while still being competitive. And as soon as one OEM raises prices, the others soon follow. In today's market and dealing with the transition to BEV vehicles, the OEM's will do whatever they can to maximize profits on the full-size pickups that will help finance that transition.   

[Deanh]

52 minutes ago, ice-capades said:

 

An increase of $2,735 for the base model isn't exactly small by any measure of typical Model Year increases. It may be justified by Ford's marketing department based on standard equipment adjustments or other factors but it's still a sizeable increase. Ford and the other "Big 3" OEM's will always price their vehicles at the highest prices that the market will bear, while still being competitive. And as soon as one OEM raises prices, the others soon follow. In today's market and dealing with the transition to BEV vehicles, the OEM's will do whatever they can to maximize profits on the full-size pickups that will help finance that transition.   

barring Rivian....lol..what...too soon?.....

[jpd80]

4 hours ago, akirby said:

They jacked up prices due to supply and demand which will swing back the other way at some point.  If you increase fixed costs and then have to lower prices you’re in deep shit.

 

It’s not as simple as Ford made $10B last year they can get by with $5B.  They’ve been around 4%-6% margin until recently when it went to 8% but that was due partially to price increases.  Once you get down to 3%-4% investors become wary, stock prices fall, credit gets more expensive and you’re one price war or economic downturn away from bankruptcy.

Yes but what I’m suggesting is that Ford also knew that labor costs were going to increase and so also began factor some of that into its increases…..I mean, that’s what corporates do when all their suppliers including the UAW signal that increases a on the way. Incentives that may or may not be used are also built into that pricing - notice how some Mach E have $3k incentive (deanh mentioned this recently).

 

Sure, fixed costs go up but that’s not going to stop them increasing prices, it is what it is, everyone groans but still keeps buying.

Edited October 5, 2023 by jpd80

[akirby]

7 minutes ago, jpd80 said:

Yes but what I’m suggesting is that Ford also knew that labor costs ere going to increase and so also began factor some of that into its increases…..I man, that what corporates do when all suppliers including the UAW signal that increases a on the way.

 

Sure, fixed costs go up but that’s not going to stop them increasing prices, it is what it is, everyone groans but still keeps buying.

I disagree.  Ford can’t just arbitrarily decide to raise prices because of some future event - that would price them out of the current market.  

[silvrsvt]

2 hours ago, ice-capades said:

 

An increase of $2,735 for the base model isn't exactly small by any measure of typical Model Year increases. It may be justified by Ford's marketing department based on standard equipment adjustments or other factors but it's still a sizeable increase. Ford and the other "Big 3" OEM's will always price their vehicles at the highest prices that the market will bear, while still being competitive. And as soon as one OEM raises prices, the others soon follow. In today's market and dealing with the transition to BEV vehicles, the OEM's will do whatever they can to maximize profits on the full-size pickups that will help finance that transition.   

 

The Bronco went up quite a bit from the 22 to the 23MY without any changes to it outside of removing a trim level

 

Edited October 5, 2023 by silvrsvt

[rmc523]

25 minutes ago, akirby said:

I disagree.  Ford can’t just arbitrarily decide to raise prices because of some future event - that would price them out of the current market.  

 

*wild price fluctuations of a few current products raise their hand*

Edited October 5, 2023 by rmc523

[Deanh]

7 minutes ago, rmc523 said:

 

*wild price fluctuations of a few current products raise their hand*

we have LITERALLY had new window stickers arrive for vehicles in which the MSRPs were changed ( hint...they did NOT go down ) I have several vans I ordered for a customer in which there are 3 different invoices....and nothing changed....

[jpd80]

36 minutes ago, akirby said:

I disagree.  Ford can’t just arbitrarily decide to raise prices because of some future event - that would price them out of the current market.  

Of course that can

Price  increases are most definitely manufacturers like Ford testing the market to see if higher prices will be rejected. The fall back is that incentive cash is built into those higher prices but whether Ford chooses to use it or not is up to them.

 

As Dean just mentioned multiple MSRP stickers with price increases arriving for vehicles, the price increases are progressive and seem to be times when buyers are not really noticing.

Edited October 5, 2023 by jpd80

[akirby]

21 minutes ago, rmc523 said:

 

*wild price fluctuations of a few current products raise their hand*

I didn’t say they couldn’t raise prices.  I said they couldn’t do it based solely on their future labor costs going up.  If everybody’s costs are going up due to inflation or there is high demand and limited supply then that’s market based pricing.  But if you raise prices and the competition doesn’t you’ll almost certainly lose sales and market share.

[Deanh]

56 minutes ago, akirby said:

I didn’t say they couldn’t raise prices.  I said they couldn’t do it based solely on their future labor costs going up.  If everybody’s costs are going up due to inflation or there is high demand and limited supply then that’s market based pricing.  But if you raise prices and the competition doesn’t you’ll almost certainly lose sales and market share.

I agree...but for the life of me I dont think theres ANY valid explanation for a car sitting here , waiting for the Customer it was ordered for to pick it up....having a $1500 give or take adjustment to its invoice WHILE its sitting here????????????? figure THAT one out....

Edited October 5, 2023 by Deanh

[GearheadGrrrl]

Good way to chase away a loyal Ford customer!

[rmc523]

https://www.autoblog.com/2023/10/06/u-s-treasury-details-new-point-of-purchase-instant-ev-tax-credit-rules/

 

Apparently effective Jan 1, EV tax credits can be directly applied as rebates at the dealer.

[akirby]

9 minutes ago, rmc523 said:

https://www.autoblog.com/2023/10/06/u-s-treasury-details-new-point-of-purchase-instant-ev-tax-credit-rules/

 

Apparently effective Jan 1, EV tax credits can be directly applied as rebates at the dealer.

How the hell is that supposed to work administratively?  The government pays the dealer and you’re on the hook when you file?  That sounds like a nightmare for the dealer and the government.

[DeluxeStang]

On 10/5/2023 at 5:30 AM, silvrsvt said:

I still can't wrap my head around people paying $1000-1200 a month for a 60K car (assuming they aren't putting any money down) when a typical mortgage or even renting an apartment in the US is $1,700~ a month. 

 

So basically the household income would need to be over well $100K a year to be able to "afford" that. 

Yeah, it's why so many of us in our 20s are immensely depressed at the moment. We've been priced out of everything. My parents paid under 400k for their 7 bedroom home just outside of Salt Lake City a decade ago. Their home is worth more than 900k now. A POS 1,200 sq ft house in the sleaziest part of SLC is like 300k now. Those kinds of homes would sell for 100k 5 years ago. 

 

People in my age group can't afford home, cars, marriage, kids, retirement, vacations, any of it. All the things society tells you that you need to have to be happy and fulfilled in life. The only form of hope my generation has is the inevitable population collapse that's a few decades out. People are building homes at a crazy pace, to keep up with crazy levels of demand, but 20 years from now, you're gonna see neighborhoods where half the homes are unlived in, people won't be able to give their homes and cars away, there simply won't be enough people to take all of them.

[akirby]

14 minutes ago, DeluxeStang said:

Yeah, it's why so many of us in our 20s are immensely depressed at the moment. We've been priced out of everything. My parents paid under 400k for their 7 bedroom home just outside of Salt Lake City a decade ago. Their home is worth more than 900k now. A POS 1,200 sq ft house in the sleaziest part of SLC is like 300k now. Those kinds of homes would sell for 100k 5 years ago. 

 

People in my age group can't afford home, cars, marriage, kids, retirement, vacations, any of it. All the things society tells you that you need to have to be happy and fulfilled in life. The only form of hope my generation has is the inevitable population collapse that's a few decades out. People are building homes at a crazy pace, to keep up with crazy levels of demand, but 20 years from now, you're gonna see neighborhoods where half the homes are unlived in, people won't be able to give their homes and cars away, there simply won't be enough people to take all of them.

It’s not fun but you just have to get further away from the popular areas where prices are more reasonable.  You might have to move to a different city or state.  That’s what we all did when we were younger.  Only difference today is the expensive areas have gotten larger.

 

Too many people today want all the best stuff right away which isn’t realistic.

[jpd80]

2 hours ago, akirby said:

How the hell is that supposed to work administratively?  The government pays the dealer and you’re on the hook when you file?  That sounds like a nightmare for the dealer and the government.

I think you misunderstand how it works, all buyers have to do is declare that they meet the income limits to qualify for the tax credit

 

This answers the question of when is a tax credit not a tax credit? When it’s an incentive

 

Quote

https://www.reuters.com/business/autos-transportation/us-treasury-details-ev-tax-credit-rebate-rules-2023-10-06/#:~:text=Currently%2C consumers can only take,may help boost EV sales.

Currently, consumers can only take advantage of the $7,500 new EV credit or $4,000 used EV credit when they file their tax returns the following year.

Starting Jan. 1, consumers can transfer the credits to a car dealer, effectively lowering the vehicle’s purchase price, a change that may help boost EV sales.
 

Under the guidance issued Friday, consumers will need to attest they meet income limits to qualify for the tax credit or they will need to repay the government when filing their taxes.

For new vehicles, the adjusted gross income limit is $300,000 for married couples and $150,000 for individuals.

Congress approved a sweeping reform of the EV tax credits in August 2022 as part of the $430 billion Inflation Reduction Act (IRA).

 

Edited October 6, 2023 by jpd80

[jpd80]

2 hours ago, akirby said:

It’s not fun but you just have to get further away from the popular areas where prices are more reasonable.  You might have to move to a different city or state.  That’s what we all did when we were younger.  Only difference today is the expensive areas have gotten larger.

 

Too many people today want all the best stuff right away which isn’t realistic.

Loading up with finance probably made sense when interest rates were low but imagine the compounding of rising prices plus higher interest on borrowings just adding to the misery. It looks like many folks are tolerating this pain for now in the hopes that interest rates will go down next year as inflation comes back under control. A good jobs growth report for September (335k?) and unemployment still under 4% are all good signs.

Edited October 6, 2023 by jpd80
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