Predictions on how long over MSRP pricing will continue?

[GordoJay]

This guy is predicting that things crash in 2023. He has an interesting view into the market. Apparently banks are backstabbing each other for business. That won't end well.

https://twitter.com/x/status/1603794722140688384

 

[Hiblit]

I have read similar articles, 2/3 of the major banks predict a recession in 23 with millions losing there jobs. Using the same indicators as the 1980’s we are at about 15-16% inflation now. Current government policy will only worsen this current condition. Basically $$ will cost a lot to borrow and cash will be king again. That generally means prices will go fown. High end vehicles are a fickle thing though, somebody always has money for good stuff!
I’m still waiting for my 23, should be here soon-whenever soon is? Guess I’ll have to make a decision then, wait for another one or pay 10K ADM.

 

[CityHunter]

This guy is predicting that things crash in 2023. He has an interesting view into the market. Apparently banks are backstabbing each other for business. That won't end well.

https://twitter.com/x/status/1603794722140688384

I don't agree with his logic. Essentially, he's saying that instead of lenders rolling in negative equity on underwater trade-ins, some lenders are now allowing the second vehicle to be purchased without the trade-in. He states that these lenders are working on the assumption that the customers will default on the first vehicle, but make payments on the new vehicle. However, his reasoning doesn't account for the following: a) new vehicle prices remain inflated/marked up; b) rates are much higher now than they were two years ago; and c) customers are less likely to default on a low-interest vehicle that has lower payments and more equity than a high-interest vehicle with higher payments and less (or no) equity. Basically, I think lenders would be shooting themselves in the foot using this strategy -- there's a strong chance that it would be the new vehicle that would go into default if the customer ultimately must default on either.

 

[GordoJay]

I don't agree with his logic. Essentially, he's saying that instead of lenders rolling in negative equity on underwater trade-ins, some lenders are now allowing the second vehicle to be purchased without the trade-in. He states that these lenders are working on the assumption that the customers will default on the first vehicle, but make payments on the new vehicle. However, his reasoning doesn't account for the following: a) new vehicles prices remain inflated/marked up; b) rates are much higher now than they were two years ago; and c) customers are less likely to default on a low-interest vehicle that has lower payments and more equity than a high-interest vehicle with higher payments and less (or no) equity. Basically, I think lenders would be shooting themselves in the foot using this strategy -- there's a strong chance that it would be the new vehicle that would go into default if the customer ultimately must default on either.

Good points. If he's even vaguely in the ballpark, there will be a wave of defaults in the auto loan market. And lots of used vehicles owned by banks will hit the auctions. If demand is lower due to a slow economy and high interest rates, prices will fall, maybe dramatically. All taken with a grain of salt, forecasting the economy is a fool's game and economists are famously lousy at it. And they're the experts. I wouldn't bank on any scenario. If I need a vehicle, I buy one that I can afford. End of story. Sometimes I look like an idiot, other times a genius. I prefer to only remember the genius times.

 

[CityHunter]

Good points. If he's even vaguely in the ballpark, there will be a wave of defaults in the auto loan market. And lots of used vehicles owned by banks will hit the auctions. If demand is lower due to a slow economy and high interest rates, prices will fall, maybe dramatically. All taken with a grain of salt, forecasting the economy is a fool's game and economists are famously lousy at it. And they're the experts. I wouldn't bank on any scenario. If I need a vehicle, I buy one that I can afford. End of story. Sometimes I look like an idiot, other times a genius. I prefer to only remember the genius times.

It'll definitely be very interesting to see how it all plays out. You said it best: if you need a vehicle, buy one that you can afford (and hopefully afford on a fraction of current income should things go south).

But back to MSRP/ADM pricing - I'm curious to know whether lenders are allowing ADMs to be rolled into the total financed amount. I believe most credit unions cap funding at MSRP (or very close to it) on new vehicles.

 

[dsiggi]

forever and ever, amen

 

[COLORAP303]

2 or 3 years!
Ford is producing less and make more money because peoples are buying over MSRP,why they would change?

Because competitors will up production. Oh yeah, and other items will get so expensive that people won’t be able to afford trucks and suvs any longer. We are in transition.

 

[smurfslayer]

Because competitors will up production. Oh yeah, and other items will get so expensive that people won’t be able to afford trucks and suvs any longer. We are in transition.

Just to clarify, when you say ‘we are in transition’...

Do you mean to say that your pronouns are ‘they/them’ and you’re ( y’all are ? ) transitioning?

or.... something else?
;-)

 

[hyrepower]

Just to clarify, when you say ‘we are in transition’...

Do you mean to say that your pronouns are ‘they/them’ and you’re ( y’all are ? ) transitioning?

or.... something else?
;-)

I was asked recently at my doctors office when checking in, if I had a preferred pronoun, I said well yes I do…It is “F*** You”.
I thought it was hilarious.

Back to the point, dealerships are starting to back way off ADM. I am picking up my new raptor for MSRP next week.
I remember saying to a D-bag sales manager at the Toyota dealer, for a Sequoia TRD Pro I wanted to bug for my wife. He said it was $30000 over list. I then said well there is an ass for every seat. He chuckled and said, well highly desired high end cars aren’t for everyone.

I then replied “you’ll be licking customers shoes to sell cars for a few grand over cost here within a year or so” he just chuckled arrogantly as if he was gods gift to earth.

Meanwhile I’ve purchased 2 BMW X7 in the past 3 years for MSRP, and now 1 Raptor next week, so I guess some people are just willing to overpay

 

[Kurtj29]

You know the old joke. Economists have predicted 9 out of the last 5 recessions.