[JMAbacus]

As documented on this board all new car pricing has gone up significantly over the past three years. The analysis showed however that the Dodge price increases where far beyond the domestic competitors. Guess it's the popularity of the models in combination with the limited numbers with 23 being the last. Maybe they need the seed money for the electric transition. Don't know the details but I see them going out of business (not Ram or Jeep) shortly regardless of what Stellantis says about allowing some long runway to reach profitability. They've had years to develop an EV or Hybrid or new platform and have not done Jack. Will join that long list of failed American car brands. Buick can't be far behind.

 

[JMAbacus]

I don't want to take any loss on it, would rather just uber for 400$ a month.
I see SO many 2022 for sale still and I see more vehicles left to order in the horsepower locator
That has me thinking that even new 2023 are going to be selling for UNDER msrp. I think the first few months got everyone worried / FOMO. With the horsepower locator launch and the market was still barly hot, made everyone think they would go for over msrp. but now the market is quickly moving to before covid levels.

Makes me worried that if I buy or lease this Challenger, I am going to be very upside-down from the beginning and will screw myself when my charger comes in.

You are going to go upside down, and it is going to happen faster than in recent months if your buying as more of the payment will be going towards interest. Used car prices are dropping - that's what the data says so it's kind of a double whammy between the two issues. I don't know your Uber bill but It's expensive and a PITA for me. Obviously, you can get a beater and save a bunch of money. I don't like driving beaters. Not to pump the brand but they are giving away base model 22 Challengers - huge discounts. New or used something like this might be a compromise to minimize your loss (still going to cost) and avoid driving a junker for an unknown length of time.

 

[JMAbacus]

What's your idea of "giving away" on that Challenger?

https://www.cargurus.com/Cars/new/searchresults.action?entitySelectingHelper.selectedEntity=d733&zip=29621#listing=340874458/NONE

How about $11,775 below MSRP on the attached base model car. Shake a tree and they fall out at 10K below. Your down below Honda Civic territory.

 

[JMAbacus]

id buy a civic beater for $2000. Then you can sell that in a few months if you want for almost the same price.

worse case you sell for $1800 and it cost you $200 for a few months.

You'll have to send me the link on that one Reaper. I just went through that exercise about 6 months ago for my daughter. Ended up with a 2011 Corolla with with 59K for 11.5 K. Cosmetically it was about a 7 but mechanically a 10. I don't think I saw a single Civic that ran for 2K. Only thing that cheap are very old domestic cars with lots of issues and miles. For a Civic you are looking at 3-4K for something with over 200K miles and in really rough shape - I mean a dog. Corollas and Civics are Hella expensive. You can get that Korean beater for $500 less but you might need the motor replaced at any moment depending on the model.

 

[JMAbacus]

Here’s a little tidbit for ya. 10 days ago at the dealer only wholesale auction that we attend every week there was a 2011 Corolla. 126k, very average car. Bidding finally ended at $10,700 plus auction fees. Over 11k. I was stunned. There is no money left in small imports right now. We dont bother buying them. we would go out of business selling those even if they’re in such high demand.
I laugh every time I hear people say the market is crashing. Go get yourself a used car business and tell me that.

Right. I paid 11,500 for my 59K Puff from a wholesale/small retail guy after searching for about 3 months. He only sells Honda's, Toyotas, or Lexus. He keeps about 30-35 cars sitting at a strip mall (with cameras inside every car). They move fast. There were 10 other wholesalers in the same strip mall with various offerings and another 50 dealers within spitting distance (outskirts of Atlanta). Spent several hours with him (one man operation) and had dinner and he told me about his business model. In a nutshell he only sells these brands because they have the least number of issues and if he buys one with an issue he either repairs it or sends it right back to auction and can take a loss in either case. The Civic or Corolla can go up to 300-500K mostly trouble free miles depending on the year so I guess that's what drives the demand through the roof. He's far from getting rich in this endeavor - I would last about a month before bankrupting things with a couple bad purchases at auction.

 

[JMAbacus]

The car market has been strong now going on 2 plus years. But the change of times seems to be upon us with new data showing car payment delinquency. The data is saying 2008-2009 similarities and sub prime loans even worst. People also have purchased cars with ADM the last few years as well and are now finding out the reality they are way upside down do to the used car values plummeting. The day of reckoning for the auto industry is here being higher interest rates has taking many out of the new car car sales. And the trade in values have created a huge challenge for an individual to sell there vehicle on their own or bury a ton of negative equity into a new car. The banks have clamped down on the LTV Loan To Value requiring people to buy out their negative equity or not qualify to buy the car. The manufacturers are starting to catch up with production again slowly though and I think intentionally so they don’t go back to the old days of too much inventory on dealers lots. Interesting times ahead for sure this year but can’t see the Hellcats being giving away per se and feel they will on the used side hold their values as well.

I hear you on the delinquency - I am aware of the numbers. And you said it right, they are 1-3 months behind. I am aware of a couple folks in this situation. They contacted the lender and said that they were going to be late on the payment and could not make one for a couple months. They are employed. They couldn't even get the words out of their mouth before the bank said no problem, they would make note and push the due date out. The banks don't want the car so we are in the early innings of this - they are not repossessing anything yet. Any loss of job or shallow recession and the cars are going on the rollback.

 

[JMAbacus]

Or lower their expectations.

Well, yes, they have revenue targets but more importantly actual earnings. They mostly hit the latter with increased pricing through the pandemic and likely into the first part of this year. If they miss on earnings that creates a cascade of lower stock prices (there already miserable for the big 3) and changes in head count and management as they answer to the BOD and shareholders. Never seen a company shrink it's sales as a sustainable business strategy. The fixed cost is just that and they have things like pension obligations. If you invested in the big three five years ago your stock price is basically flat. You did make a dividend but it was not a growth business. The CEO's all say that electrification is the path to future growth and earnings. Sure. This frenzy of HC sales is just a death rattle for Dodge then hard realities.