5 ms·

One of the other oddities of this market is that prices for "normal" cars have increased at a higher rate than prices for "upmarket" cars. There is now some pr

by OldHand2018 5y ago

One of the other oddities of this market is that prices for "normal" cars have increased at a higher rate than prices for "upmarket" cars. There is now some pricing overlap that never used to be there.

avn2109 5y ago
This is interesting, can you give some examples?
- lastofthemojito 5y ago
  It's interesting to browse Carvana - many of their listings include a link to a window sticker, which includes the original MSRP. Some normal cars, especially ones in high demand like the Kia Telluride, are quite marked up. Here's an almost-new Telluride listed for $46,990, but if you look at the window sticker, the MSRP when new was $35,770. https://www.carvana.com/vehicle/1936818 https://www.carvana.com/vehicle/1936818 One the other hand, the Mercedes GLC isn't at the top of most people's lists. Here's an almost-new one listed for $49,990. According to the window sticker, original MSRP was $51,125. https://www.carvana.com/vehicle/2059912 https://www.carvana.com/vehicle/2059912 MSRPs $15k apart, but now listed for a just a $3k difference.
- el_benhameen 5y ago
  As another poster noted, Kia is a particularly good example. I am trying to buy a Kia suv and would normally have thought of it as a mid- to lower-level consumer brand, but there’s insane markups and competition for them right now. The Sorento tends to be marked up $3-8k over msrp in the bay area, and I’ve seen the Telluride marked up $10k+. I went to test drive a Telluride; the first one was bought as I was getting in and the new owner shouted me out of the car, and the salesperson told me to decide whether I wanted the second one before I got back or he’d have it sold. Anecdotal, but he told me that folks who would usually go for a Range Rover like the style, so they’re happy to pay $60k for a marked up Kia versus $100k for whatever else they would have bought.
- OldHand2018 5y ago
  I had an article that had a big list, but unfortunately I can't find it any more. You can do some web searches and see that the brands with the largest price gains are "normal" while the brands with the smallest price gains are "luxury" cars. You may do best with some anecdotal evidence, however. I moved from the city to the country this year and needed to buy a 2nd car to get me to/from the train station once work went back in person. We were targeted for an October return, so my plan was to buy a cheap used car starting around July. I quickly found that cheap used cars don't exist, but certainly the ones that were the least overpriced were luxury makes, which I associated with concerns over long-term reliability - but I now think that was incorrect. Once I gave up on used cars, I started looking at new cars. "Normal" dealerships were an incredible pain, especially once they found out that I was not going to trade in the car I arrived in. They all wanted high prices above sticker price, long waits, all sorts of games with add-on packages, etc. The two closest dealerships to me were Mercedes and Audi, and when I went to them I found no games, no markups, no giant crush of buyers clogging everything up, etc. I ended up with an Audi Q5 at ~$2k below sticker price (~$46k), the same price range I was being quoted for a Honda Ridgeline (well over sticker - and not even the top model). In normal times it probably would have been $5k below sticker, but whatever. The return to office got delayed again - maybe early 2022 - so it now just sits in the garage getting dusty. Still has the new car smell.
beh9540 5y ago
I noticed the same thing - Nissan and Infiniti models that are basically the same chassis but with fancier features going for the same price. Infiniti was lower than MSRP but Nissan was above.
CamperBob2 5y ago
Someone in the market for a new Porsche can probably wait. Someone in the market for a new Kia probably can't.
- tonyedgecombe 5y ago
  Someone in the market for a Porsche won't have to wait because they are high margin products. VW will be looking at the shortages and making the calculation that they are better off putting limited resources (chips) into Porsches rather than Skodas.
  - CamperBob2 5y ago
    To the extent that's true (and it clearly is), it exerts even more upward price pressure on the Skodas, since demand is going unfilled. In reality, it will take about a year to receive a 992 ordered now. They can't make anything in the volume needed to satisfy demand. I have a feeling that this particular shitshow is still in Act I. Nobody at my company is ordering any new 911s, considering that the brokers have jacked up the prices of $50 FPGAs to $750.
  - rasz 5y ago
    >Someone in the market for a Porsche won't have to wait because they are high margin products do I have news for you :-) https://www.youtube.com/watch?v=JNkwv0SHEEs https://www.youtube.com/watch?v=JNkwv0SHEEs https://www.youtube.com/watch?v=0DTibY2dDN0 https://www.youtube.com/watch?v=0DTibY2dDN0 TLDR maybe 2 cars per dealer allocated to the end of the year
nostrademons 5y ago
Interesting that we had the same effect for housing (at least in the Bay Area) during and immediately after the pandemic. Hot zip codes like San Francisco, Palo Alto, Menlo Park, Mountain View, Portola Valley, Woodside, etc. actually fell. Second-tier suburbs like the mid-peninsula, Sunnyvale, Fremont, Berkeley, Oakland, El Cerrito, etc. exploded. I suspect that it's a function of shortages. When there are not enough goods to go around at the high end, some fraction of those buyers get displaced to the next tier down. They keep their high-end incomes and ability to pay, though, and bid against each other so that the next tier of goods becomes almost as expensive.

avn2109 5y ago

This is interesting, can you give some examples?

lastofthemojito 5y ago
It's interesting to browse Carvana - many of their listings include a link to a window sticker, which includes the original MSRP. Some normal cars, especially ones in high demand like the Kia Telluride, are quite marked up. Here's an almost-new Telluride listed for $46,990, but if you look at the window sticker, the MSRP when new was $35,770. https://www.carvana.com/vehicle/1936818 https://www.carvana.com/vehicle/1936818 One the other hand, the Mercedes GLC isn't at the top of most people's lists. Here's an almost-new one listed for $49,990. According to the window sticker, original MSRP was $51,125. https://www.carvana.com/vehicle/2059912 https://www.carvana.com/vehicle/2059912 MSRPs $15k apart, but now listed for a just a $3k difference.
el_benhameen 5y ago
As another poster noted, Kia is a particularly good example. I am trying to buy a Kia suv and would normally have thought of it as a mid- to lower-level consumer brand, but there’s insane markups and competition for them right now. The Sorento tends to be marked up $3-8k over msrp in the bay area, and I’ve seen the Telluride marked up $10k+. I went to test drive a Telluride; the first one was bought as I was getting in and the new owner shouted me out of the car, and the salesperson told me to decide whether I wanted the second one before I got back or he’d have it sold. Anecdotal, but he told me that folks who would usually go for a Range Rover like the style, so they’re happy to pay $60k for a marked up Kia versus $100k for whatever else they would have bought.
OldHand2018 5y ago
I had an article that had a big list, but unfortunately I can't find it any more. You can do some web searches and see that the brands with the largest price gains are "normal" while the brands with the smallest price gains are "luxury" cars. You may do best with some anecdotal evidence, however. I moved from the city to the country this year and needed to buy a 2nd car to get me to/from the train station once work went back in person. We were targeted for an October return, so my plan was to buy a cheap used car starting around July. I quickly found that cheap used cars don't exist, but certainly the ones that were the least overpriced were luxury makes, which I associated with concerns over long-term reliability - but I now think that was incorrect. Once I gave up on used cars, I started looking at new cars. "Normal" dealerships were an incredible pain, especially once they found out that I was not going to trade in the car I arrived in. They all wanted high prices above sticker price, long waits, all sorts of games with add-on packages, etc. The two closest dealerships to me were Mercedes and Audi, and when I went to them I found no games, no markups, no giant crush of buyers clogging everything up, etc. I ended up with an Audi Q5 at ~$2k below sticker price (~$46k), the same price range I was being quoted for a Honda Ridgeline (well over sticker - and not even the top model). In normal times it probably would have been $5k below sticker, but whatever. The return to office got delayed again - maybe early 2022 - so it now just sits in the garage getting dusty. Still has the new car smell.

beh9540 5y ago

I noticed the same thing - Nissan and Infiniti models that are basically the same chassis but with fancier features going for the same price. Infiniti was lower than MSRP but Nissan was above.

CamperBob2 5y ago

Someone in the market for a new Porsche can probably wait. Someone in the market for a new Kia probably can't.

tonyedgecombe 5y ago
Someone in the market for a Porsche won't have to wait because they are high margin products. VW will be looking at the shortages and making the calculation that they are better off putting limited resources (chips) into Porsches rather than Skodas.
- CamperBob2 5y ago
  To the extent that's true (and it clearly is), it exerts even more upward price pressure on the Skodas, since demand is going unfilled. In reality, it will take about a year to receive a 992 ordered now. They can't make anything in the volume needed to satisfy demand. I have a feeling that this particular shitshow is still in Act I. Nobody at my company is ordering any new 911s, considering that the brokers have jacked up the prices of $50 FPGAs to $750.
- rasz 5y ago
  >Someone in the market for a Porsche won't have to wait because they are high margin products do I have news for you :-) https://www.youtube.com/watch?v=JNkwv0SHEEs https://www.youtube.com/watch?v=JNkwv0SHEEs https://www.youtube.com/watch?v=0DTibY2dDN0 https://www.youtube.com/watch?v=0DTibY2dDN0 TLDR maybe 2 cars per dealer allocated to the end of the year

nostrademons 5y ago

Interesting that we had the same effect for housing (at least in the Bay Area) during and immediately after the pandemic. Hot zip codes like San Francisco, Palo Alto, Menlo Park, Mountain View, Portola Valley, Woodside, etc. actually fell. Second-tier suburbs like the mid-peninsula, Sunnyvale, Fremont, Berkeley, Oakland, El Cerrito, etc. exploded. I suspect that it's a function of shortages. When there are not enough goods to go around at the high end, some fraction of those buyers get displaced to the next tier down. They keep their high-end incomes and ability to pay, though, and bid against each other so that the next tier of goods becomes almost as expensive.