For those who have been doing this the longest, is this the tightest market you’ve seen? I’ve been doing this for about 7 years now, and pre-covid there were screaming cheap deals. Then covid came, inventories got tight, but lots of equity in the existing leases and super-high residuals (anyone remember the Nissan 95% Frontiers). After that was EVs, rebates and incentives all around.
Now the pricing is okay, but much harder to find strong deals. Supply/Demand, Tariffs, or higher rates? Any thoughts?
True, I’ve gotten a few deals for myself and close friends, but takes a bit more work and isn’t as easy with as many makes/models competing. Maybe it is just the aftermath of the $7,500 being gone.
Kinda leaving out some key details…During shortage was arguably the worst especially if you were starting out fresh.
While many used cars did gain equity due to scarcity, that was usually wiped away by premiums (market adjustments as well as little to no discounting) on new leasable inventory IF you could get your hands on it.
True, but many of us participated in Wrangler 4XE-mania, ordering from a handful of dealers who would do MSRP or a bit better on an order, but we had to wait a few months to get the car. They were also flippable thanks to equity.
I did okay by having an existing BMW lease that had $6k+ of equity in it that I could put towards my next BMW lease, not the BEST scenario, but was okay for the time. I can see how starting out fresh would be miserable.
It was also a matter of planning ahead, lots of dealers would charge MSRP so long as you placed an order and waited in line for your car to arrive (helped friends and family get a Subaru and Kia like this but cars took six months to show up).
I guess my point was that it was pretty easy during covid since there were high residuals, so long as you did some ground work and were willing to wait.
Idk what everyone is talking about, the economy is not getting any better (and wont) and its been pretty easy for people to get great discounts. A lot of people are just hyper focused on the heavily subsidized deals that once were a thing and no longer are. Welcome back to reality.
I’m going to politely disagree. Going to pre-Covid, BMW had more lease incentives as a % of MSRP, OL codes were easier to get. Upfront discounts might have been harder, but the overall lease deals were better.
What I’m not getting is the economy is supposedly horrible, but everyone has record sales with higher prices (not just leases). I completely understand there’s no reason to subsidize or discount something that’s selling well.
iX3 is a great example. No incentives, but sold through for a $70k+ EV SUV in a supposedly “bad” economy. Everyone is complaining about inflation but high dollar items are continuing to sell easily.
BMW targeting premium customers by not leasing 3er’s at Camry prices isn’t exactly crazy work. Even though volume is up from the shortages they still aren’t cranking out metal to the levels they used to for most if not all models.
I think German car pricing is completely out of control thanks to the stupid tariffs and it doesn’t help that the Iran war pushed inflation expectations and interest rates higher. Anybody else outraged that the base X5 trim can get into the $90Ks? Base Cayenne with a few options $110K?
EV Hacks look dead to me. The $7500 is gone and dead. I’m currently leasing 2 cars with a combined sticker of $290k for $1700 a month. The luxury leasing EV market is beyond toast imo. I’ve got until next summer and a Taycan electric / Cayenne electric combo for $2k total seems like the ultimate unicorn at this juncture. In 2024 I would’ve thought it could be done without too much work.
Certainly not a worse car market than late 2021 / 2022, but at least then, people were flush with cash and would pay whatever. If my acura store had 4 cars and all 4 were base white TLXs, there were buyers for all 4. Now, it feels like the opposite - ample cars, nobody can afford them. A lot of people basically price shopping and trying to grab best value for the buck, so things like the qx60 / 65 are flying.
Obviously, the biggest culprits are the tariffs and the war. Both are completely unnecessary self-owns that have decimated the “main street” economy, while lining the pockets of corporations and the government.
Auto manufacturers are caught in the crossfire here. They have to navigate a highly-complex and whimsical tariff regime, while also actually selling their product to dealers. This is why you see shrinkflation in cars (leather changed to pleather, wood changed to hard plastic, etc). This is also why you see so much broker backlash now. OEMs have higher costs, they try to pass them on to dealers, dealers bitch about increased price competition and disclosure from brokers, the OEMs push back.
It’s glaring to me how much worse the economic environment has gotten from 2 years ago. You could make the argument that the economy was on a sugar high from the IRA, but inflation was cooling, people were spending money, and things were humming along. Then, something happened (wonder what??) and people now spend an outsized portion of their paychecks on food and energy (and all of the derivatives of that), which have skyrocketed. Agree w @IAC_Nick will only get worse.
TBF those ratios are skewed by how arbitrary the MSRPs are. If EVs were hot like the 6-month waitlist days then Porsche would release a Taycan “GT3” with a $300k MSRP and someone would eventually hack it for $1,500 a month.
All the MSRP for XM, i7, EQS, RS Etron GT, etc etc are just whatever tf they want them to be.
