I would suspect that every brand has dealers selling cars over MSRP currently and every brand has dealers selling cars under MSRP.
Well, except maybe Tesla.
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I just saw a quote the other day from a customer on a BMW M850 GC that was $7k off plus $11k rebate. Granted this was not an in-stock car, so who knows if they would have done that deal for something on the ground.
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I’m really curious to see what’s happening with the average finance term, which was already stretching to nausea-inducing highs.
What’s the Average Length of a Car Loan?
New-car financing
The portion of new-car loans with terms of 85 to 96 months increased to 4.8% in Q2 2020, from 1.3% in Q2 2019, while the percentage of loans with terms ranging from 73 to 84 months also rose, to 35.1% from 31.1%.
Accompanying those increases was a reduction in the portion of new-car loans with terms ranging from 49 to 60 months, which fell to 15.7% from 19.7% in Q2 2019, and a lesser decline in the portion of loans with 61-to-72-month terms, which fell from 40.6% in 2019 to 39.9% in Q2 2020.
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I remember crossing this very Rubicon c. 2007. 84 month terms are not also 0%
Obviously Porsche is a little different given the customer base, but a lot more cash deals than normal with very few leases and financing.
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That’s an interesting perspective. I know Jeep dealers were discounting orders more than in stock units but my local BMW dealership GSM told me that they’d rather discount an in stock (if they intend to discount at all that is) car and make a sale vs ordering it and selling it 1-2 months from now.
Any term length metrics would be for customers who get a loan, not for all customers where cash buyers are also averaged in with a term of zero months.
Jeep orders don’t come out of their standard allocation allotment, so they’re motivated to discount orders differently than in stock units.
Yep I’m aware of that. Hence my point about why it makes sense if jeep dealers do it but doesn’t if BMW/other brands that don’t have this policy do it.
The same reason some dealers (in a normal market) give away new cars while tearing heads off on used units.
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BMW dealers earn more cars based on how many they sell (at least when I worked there). Moving a unit on the lot earns them another allocation. Placing an order does not earn them another allocation until that unit is delivered. Plus things can go wrong with orders, so any reasonable manager would want to make a deal now to increase their allocations and prevent an order form going sideways.
Only way I got a discount on my bmw was by doing an order. 10% if I was willing to order, so I ordered through a broker
Local dealers in the ny/nj metro weren’t discounting beyond any incentives, as of last month.
Here we are doing 12-14% off Acura’s! Not sure what to think!
Have I been talking to the wrong dealers or prices are completely insane? I can’t even get a quote for MSRP on a Tacoma…
On the other hand, VROOM is giving me for my '19 Tacoma with 11k miles $29k. MSRP was $28k and I got it 11% under MSRP ($25k). WTF!?
Yes, that is pretty much the market right now
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i think the definition of “roof” is subjective, no?
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Will eventually correct or prices could stay high due to inflation. The money is printing and people are spending. Demand is much higher than supply which will trigger a price increase…
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These two are very closely related.
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Of course… If companies like CARVANA or VROOM are buying used cars for more $ than new… then New Cars are also going to reflect such price hike also.
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I suspect the causal relationship there is backwards. The 3rd party dealers are paying that high for used cars because new cars are going for so high/simply aren’t available.
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