4 ms·

The good news is that the used vehicle market will almost certainly crash around 2022/2023 as new vehicle production catches up with demand. Currently, my 2020

The good news is that the used vehicle market will almost certainly crash around 2022/2023 as new vehicle production catches up with demand. Currently, my 2020 used car with 30K miles can be sold for more than the MSRP for the 2022 model with identical trim. And it can even be sold for slightly more than actual quotes I've gotten for the 2022 model from dealers. There's obviously a supply shortage going on that will subside. The bad news is that the new vehicle and food price increases are almost certainly sticky. Energy is the big tricky question mark. The big worry post-pandemic was about US shale production never returning, but it's starting to look like we'll hit the 2019 highs in US domestic production some time in the next year or so. I suspect we're past the peak in terms of rate of growth, but it's hard to say if the new prices are sticky or if we'll see a meaningful decline in the next year or two. (I've started to build a strategy for selling off my energy holdings and I'm still on the fence about what to do with Ford and GM.)

xadhominemx 5y ago
New vehicle prices are almost certainly not sticky. Competition between dealers and OEMs is normally fierce, and will revert to normal once we exit this supply-constrained environment. Food price is also highly cyclical and related to supply constraints of pure commodities which always correct.
- lapsedacademic 5y ago
  > not sticky I guess I should've clarified. Vehicle prices for equivalent vehicles probably aren't sticky, but the statistic reported here is sticky. Electrification will increase average sale price. But the amortization schedule will lengthen, operating cost will decrease, and maintenance will plummet. So might still be a win for consumers. But I don't think avg sale price will come down meaningfully. You'll see a big shift from ICE to E, though, and yes, ICE prices will come down a lot. > Food price is also highly cyclical and related to supply constraints of pure commodities which always correct. Suffice it to say that I'm not betting on commodities in either direction but I've got a huge position in Tyson.
  - lotsofpulp 5y ago
    I never see any electric cars on the road other than Tesla. To me, that means no other automaker has produced a compelling electric option yet, so I would not bet on significant ICE to E within the next few years (other than the increasing numbers of Teslas).
    - reducesuffering 5y ago
      In the Bay Area, there are many Chevy Bolts, VW ID.4, and Ford Mach-E. They are more competitive economically than their ICE counterparts when you include minimal operating expenses for energy and maintenance, and their possible 7.5k tax credit. Bolts were going for ~$25k at ~250 miles range. 2023 ID.4 is an SUV/Crossover with probably ~240 mile range rumored for ~35k (and $7.5k off tax credit) Mach-E is an SUV/Crossover with ~250 mile range for ~$44k (and $7.5k off tax credit)
- decafninja 5y ago
  Seems these days you're getting a good deal if you pay MSRP for a new car *. You're getting a fantastic deal if you pay anything less, and it's not uncommon to be paying some kind of markup. I wonder if that's the new normal, or if haggling will make a comeback? * excluding some undesirable makes/models that would have sold poorly without huge incentives pre-pandemic anyways.
uejfiweun 5y ago
I'll believe it when I see it. People have been so wrong about these supply chain issues that I am starting to think the whole thing is just permanently busted. It doesn't help that the fed is literally lying out of its teeth and realistically will do everything they can to AVOID raising interest rates. They are all corrupt as hell, secretly trading stocks under our noses.
- lapsedacademic 5y ago
  In that case, cash out your 401(K) and buy a shitload of used cars. I've got one I'll sell you for $15K over its 2020 purchase price. Perfect condition at only 20K miles.
  - selimthegrim 5y ago
    He or she can always go to some country with a deflationary currency spiral and sell them.
- knownjorbist 5y ago
  When & where have "they" been wrong about the supply chain issues? Everyone's talking about corrections this year and next. We're only 12 days into this year.

xadhominemx 5y ago

New vehicle prices are almost certainly not sticky. Competition between dealers and OEMs is normally fierce, and will revert to normal once we exit this supply-constrained environment. Food price is also highly cyclical and related to supply constraints of pure commodities which always correct.

lapsedacademic 5y ago
> not sticky I guess I should've clarified. Vehicle prices for equivalent vehicles probably aren't sticky, but the statistic reported here is sticky. Electrification will increase average sale price. But the amortization schedule will lengthen, operating cost will decrease, and maintenance will plummet. So might still be a win for consumers. But I don't think avg sale price will come down meaningfully. You'll see a big shift from ICE to E, though, and yes, ICE prices will come down a lot. > Food price is also highly cyclical and related to supply constraints of pure commodities which always correct. Suffice it to say that I'm not betting on commodities in either direction but I've got a huge position in Tyson.
- lotsofpulp 5y ago
  I never see any electric cars on the road other than Tesla. To me, that means no other automaker has produced a compelling electric option yet, so I would not bet on significant ICE to E within the next few years (other than the increasing numbers of Teslas).
  - reducesuffering 5y ago
    In the Bay Area, there are many Chevy Bolts, VW ID.4, and Ford Mach-E. They are more competitive economically than their ICE counterparts when you include minimal operating expenses for energy and maintenance, and their possible 7.5k tax credit. Bolts were going for ~$25k at ~250 miles range. 2023 ID.4 is an SUV/Crossover with probably ~240 mile range rumored for ~35k (and $7.5k off tax credit) Mach-E is an SUV/Crossover with ~250 mile range for ~$44k (and $7.5k off tax credit)
decafninja 5y ago
Seems these days you're getting a good deal if you pay MSRP for a new car *. You're getting a fantastic deal if you pay anything less, and it's not uncommon to be paying some kind of markup. I wonder if that's the new normal, or if haggling will make a comeback? * excluding some undesirable makes/models that would have sold poorly without huge incentives pre-pandemic anyways.

uejfiweun 5y ago

I'll believe it when I see it. People have been so wrong about these supply chain issues that I am starting to think the whole thing is just permanently busted. It doesn't help that the fed is literally lying out of its teeth and realistically will do everything they can to AVOID raising interest rates. They are all corrupt as hell, secretly trading stocks under our noses.

lapsedacademic 5y ago
In that case, cash out your 401(K) and buy a shitload of used cars. I've got one I'll sell you for $15K over its 2020 purchase price. Perfect condition at only 20K miles.
- selimthegrim 5y ago
  He or she can always go to some country with a deflationary currency spiral and sell them.
knownjorbist 5y ago
When & where have "they" been wrong about the supply chain issues? Everyone's talking about corrections this year and next. We're only 12 days into this year.