Nailed it.
I was starting to write another long post like this citing trends and economic metrics over time which would have culminated in me saying:
But what do I know? I only sell these things.
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What part of this indicates recession? The US economy is the strongest among all developed nations. The Fed has engineered a slowdown in inflation, while maintaining solid growth. Powell has done a terrific job. Are some things unaffordable and has the wealth divide widened over the past several years? Absolutely. That said, the pace of wage gains has been outpacing inflation for well over a year at this point. The US consumer is healthy.
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Inflation is controlled when you exclude all the things that contribute to inflation. An actual measure of purchasing power, ie not “ real wages “ would not be up.
If you under measure inflation , as we have done and continue to do, it leads you to make conclusions like real wages are going up, when they are not.
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Yeah, sure, if you go by the Core CPI that excludes food and energy.
There are a million ways to slice that data depending on the point you want to prove. Every day normal wage earning people are not feeling like they are winning or healthy.
Look at any poll from the last year, 60%+ of people report that they are living paycheck to paycheck. The average home is not affordable on the average salary. The consumer is not healthy. People are desperate. When you have people making $75k+ per year who can’t even afford a shit-box house, something is not right.
This is also not to mention that Core CPI excludes home prices, which is one of the most major things constraining peoples budgets:
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Home prices, especially in our area, are due to a significant supply-demand imbalance, due to high interest rates. In many parts of the country, such as FL and TX, there are significant price cuts, due to oversupply. As interest rates begin to drop, you’re going to see a far more liquid real estate market.
agree with affordability. this is what happens when you print $6tn and give it out like candy via 3 stimulus packages, and couple it with a ton of other pandemic spending.
none of this should take away from the fact that unemployment is at historic lows, prices are moderating / falling, supply chain disruptions are gone, and the economic engine of this country is humming along. were this not the case, the first thing that goes are auto sales. is it slow for you right now?
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Unemployment is climbing again, The economy is not humming along. Surplus of commercial buildings, vehicles and many other frivolous goods are piling up because needed items are at all time highs.
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You’re right. 2017-2020 were better years. Good?
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The middle and lower class would strongly agree with you.
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Idk man a 22k vehicle that loses half its value (about 11k) at 4% is what 380 ish?
That seems to be right.
Yes, we’ve got several posts with this information…my question is why? Auto sales are declining, that’s a 7 year long trend, pre dating even covid. People see the covid period with no cars on the lot and lots of leverage for dealers, but those were production issues. There are no such issues anymore, time on lot (as someone provided data for above) is also quite high for almost all manufacturers.
It’s hard to get meaningful data from the manufacturers, because revenue and profit are up year over year for 3 years, but that’s mainly because post covid they had nowhere to go but up.
Additionally, it’s hard to say that EV’s are being discounted and incentivized due to a misunderstanding of the market. BMW’s EV sales are outpacing their projections and growing sharply while their ICE sales are declining year over year.
Perhaps I’m missing something in the profitability of EV’s vs ICE’s that makes dealerships able to discount them more heavily, but BMW’s yearly release says EV’s are still costing more to produce, and has to offset that with higher prices, so I’m not sure that flies either.
All of that said, the factors that are shared here: increased price of car and increased rates don’t add up to the increase in lease payments. For example, if your corolla is now 10% more expensive (2500) and you’re borrowing at 7% instead of 2%, your payment shouldn’t even go up by $100. We’re seeing in real time, that is absolutely not the case.
Even on cars with almost no change in price, the lease cost is astronomical.
Hopefully that link works, it’s a sign and drive on a 2024 Corolla LE base (23k sticker) for $500/mo. Are you kidding me? You could buy the car outright on a 4 year loan for that much, even with interest.
Also, because it is incredibly annoying. This is a build of my exact car but a 2025 model.
https://www.bmwusa.com/build-your-own.html#/studio/fdrh1xwf/summary
It’s $70,675 that’s less than $3k more than my car was 4 years ago. So I don’t want to hear about the huge cost inflation.
Dude, why do you need to make up fake information to keep beating the dead horse that cars were lower cost in 2021 vs 2024? The auto industry has not been in a decline dating back to COVID. Supply took almost 3 years to get back on track. Higher interest rates vs 2019 was a government policy meant to lower affordability. This Jerome Powell guy slowed inflation by increasing interest rates.
You’re also well aware that automakers are taking pricing on ICE to give up margin on EVs. You literally started this thread complaining about how all the deals are on EVs and lamenting lack of ICE deals. So, you’re well aware ICE is subventing EV pricing. And yet you act like you’re confused why ICE payments have significantly increased since the days before EV-mania?
You’ve already posted the answers to your own questions, but then you make up fake sales trends and mis-interpreted pricing differentials to act like you don’t actually know what is driving higher ICE payments.
TLDR, ICE pricing has increased due to lower incentives, higher interest rates, higher pricing, absence of residual subvention, and dealers having less willingness to dip to triple net. If you don’t want to buy a new car, get a used car. The auto market has a seat for every butt.
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I’m talking about new car sales, data below:
https://www.ibisworld.com/us/bed/new-car-sales/88203/
New car sales have been declining since 2017. We have seen a slight correct the past year and a half, but only back to 2013 levels of sales.
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Lol 17-18-19 is basically a steady state period before the pandemic.
By your definition of declining trend, 2000 to 2005 was also “in decline”. But there wasn’t a single auto pundit before the financial crisis who would have said that 00-05 period was defined as a “decline.” I agree annual sales in 2005 were 0.4mm less than 2000, but to qualify that as a decline-trend is doing a disservice to others.
Yeah this is incredibly annoying. You’re not being consistent.
Your own words:
Let’s focus on that:
“Exception being Cooling and Performance Pack and DAP”
So did you have M suspension, Park Assist, and Ventilated seats in your 2021 car? Or were those other options that weren’t “loaded”? When I think loaded, I think those 3 options would be part of a M440ix. Even a Mercedes C300 with a cosmetic package has ventilated seats.
Go hit up AutoCompanion for another M440… too bad you cannot apply the college grad rebate a second time. BTW, remember that when you previously posted your 2021 MSRP, that included destination. But the 2025 BMW Build and Price tool you linked excludes destination.
I just messed around with a calculator for a 2024 M440 and decreased the money factor to what you had on your 2021 of .00086. That 3% reduction alone decreased the payment $140 a month without touching msrp, residual, discount, incentives and 0% tax. Higher interest rates have a pretty big impact on leases. Now combine that with less incentives, lower residuals, higher msrp. It sucks.
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I want whatever you’re smoking
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certainly not a top 10 MBA, M&A experience, and dealing with thousands of car buyers each year
Not hard to find. You might say it’s actually force fed. 
I think everyone is in agreement that ICE cars are more expensive to lease now because of lower residuals, higher interest rates, less incentives, etc… but again the question is WHY
WHY are OEMs pushing EVs so hard when they have excessively high MSRPs, low range, and poor charging infrastructure. Of course the side effect of this is that no one buys the cars and then they need to put huge incentives to move the aging inventory.
Why haven’t they right-sized EV production, and continue to overproduce and then incentivize? And on the flip side, why have ICE lease residuals fallen?