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This makes sense given that I just read dealerships now make more money from loans than from the car itself. This has driven the industry to make more loans to

This makes sense given that I just read dealerships now make more money from loans than from the car itself. This has driven the industry to make more loans to unqualified buyers and are now starting to see them default. This would partly explain the jump in avg selling price as consumers might not be scrutinizing the cost as closely. I can't find the link now, but basically the advice was to wait (until next year?) to purchase a used car as prices will drop.

encoderer 4y ago
I bought a car in April 2020 when the dealerships were reeling from closures and there were no shortages yet. I knew I had a good bargaining position as one of the few people buying, and I shopped around and tried to get the best deal I could. In the end i drove the car away 20% under the sticker price, but despite coming in with all cash I was asked to finance about 33% of the cost through the manufacturer and keep the note open for 6 months before paying it off. We didn’t go into it, but it was obvious the dealership was getting a healthy commission for that loan, enough that they didn’t mind selling me the vehicle at what I presume is close to their own cost.
- jaclaz 4y ago
  This could be also due to some (marketing) "target". The manufacturer might impose to a dealer (say) 1000 loans per year, if they meet the target they get an additional discount or a prize, not unlike the targets imposed for sales. At least here (Italy) the so-called "km.0"[0] are very common (of course rarely for models that sell well) the dealers have often some convenience to buy a few cars themselves (they are "sold" vehicles to all effects as seen by the manufacturer) and then re-sell them at a discount (the 20%-30% less than sticker price is not unheard of). Years ago these "internal sales" were driven by fiscal year reports, so you could find the "km.0" only in January/February, nowadays the manufacturers have moved to reports avery 3, 2 or even one month so you can find some discounted cars in every period of the year. [0] these are cars that were registered but never driven
treyfitty 4y ago
They said to wait last year. People who need a car can’t wait forever
- josefresco 4y ago
  Obviously. If you CAN wait (like me) then you should wait. What I found interesting was the shifting business model. Just like housing pre-2008 it seems values are being driven up by "easy money".

encoderer 4y ago

I bought a car in April 2020 when the dealerships were reeling from closures and there were no shortages yet. I knew I had a good bargaining position as one of the few people buying, and I shopped around and tried to get the best deal I could. In the end i drove the car away 20% under the sticker price, but despite coming in with all cash I was asked to finance about 33% of the cost through the manufacturer and keep the note open for 6 months before paying it off. We didn’t go into it, but it was obvious the dealership was getting a healthy commission for that loan, enough that they didn’t mind selling me the vehicle at what I presume is close to their own cost.

jaclaz 4y ago
This could be also due to some (marketing) "target". The manufacturer might impose to a dealer (say) 1000 loans per year, if they meet the target they get an additional discount or a prize, not unlike the targets imposed for sales. At least here (Italy) the so-called "km.0"[0] are very common (of course rarely for models that sell well) the dealers have often some convenience to buy a few cars themselves (they are "sold" vehicles to all effects as seen by the manufacturer) and then re-sell them at a discount (the 20%-30% less than sticker price is not unheard of). Years ago these "internal sales" were driven by fiscal year reports, so you could find the "km.0" only in January/February, nowadays the manufacturers have moved to reports avery 3, 2 or even one month so you can find some discounted cars in every period of the year. [0] these are cars that were registered but never driven

treyfitty 4y ago

They said to wait last year. People who need a car can’t wait forever

josefresco 4y ago
Obviously. If you CAN wait (like me) then you should wait. What I found interesting was the shifting business model. Just like housing pre-2008 it seems values are being driven up by "easy money".