crack in pricing start? Carvana

[Seanuf99]

Yes, he does a couple of short consumer advice/info/warning type things on the radio news each morning. The car thing was this morning.

I'm glad to hear he is still around. I worked with him 20 years ago or so. Did not know him well, but always enjoyed listening and watching his shows.

Sponsored

 

[shogun32]

Are you talking about dealership inventory finance rates? Or retail loan finance rates?

manufacturer financing. Retail will be Prime+.

Interesting observation from the other day - I bought a 21 Challenger SCAT for 43k (before tax) and the CU wrote a 5.2@60 loan for 41K which was "low book". So banks are starting to get serious about paring their LTV risk.

 

[KingKona]

manufacturer financing. Retail will be Prime+.
Interesting observation from the other day - I bought a 21 Challenger SCAT for 43k (before tax) and the CU wrote a 5.2@60 loan for 41K which was "low book". So banks are starting to get serious about paring their LTV risk.

Dude, please speak plainly.

What do you mean by "manufacturing financing"? Financing manufacturers pay on equipment they use? Or a vehicle manufacturer's finance arm retail lending rates?

Because there used to be plenty of retail lending, most specifically by Ford Credit, that was NOT prime +.

There used to be. Not so much now.

 

[shogun32]

What do you mean by "manufacturing financing"?

If Ford Credit writes the loan it's Vendor/Manufacturer Financing.
If Bank of America/Local CU writes the loan it's Retail Financing.

There may be a few CU still laggards about hiking rates but most appear solidly into high 5's at the minimum even for Good+ credit score customers.

 

[KingKona]

If Ford Credit writes the loan it's Vendor/Manufacturer Financing.
If Bank of America/Local CU writes the loan it's Retail Financing.

There may be a few CU still laggards about hiking rates but most appear solidly into high 5's at the minimum even for Good+ credit score customers.

I would call both types retail lending/financing.

Anyways.......that's why I wrote that when we see 0% from Ford Credit again, we'll know we're back to something good.

And yes, Ford does do a true 0%. Only Ford and Toyota do that.

 

[Spartan1]

Their vending machine here in Novi, MI was illegally processing paperwork, got fined and then shut down last month.

The corporate response was "it's not our fault Michigan has antiquated paperwork processes that couldn't keep up with our needs."

You can't make up that kind of tone deaf-ness, I sold my 2019 to Vroom, made money on a used car and it was a great transaction, but no way I'd ever do any other business than sell these places a car.

 

[Hack]

wait wait wait wait. The kool-aid drinkers over in the Shelby forum said "nobody regrets buying a Shelby no matter how much they paid (eg. ADM) and prices were never going to come back down."

Were they wrong?

I sure hope so. I want a GT350 so badly! I wish I'd never sold mine.

Yup...$65k 2020 GT500s by this time next year and I've had people scoffing at my prediction for months now.

I don't like automatic transmissions, but that would be tempting. I think for GT500 prices to get that low that quickly things will have to be REALLY bad. Like having trouble buying food or heating the house bad.

Maybe. 425 GT350's available now. Only 5 GT350R's and 234 GT500's.
https://www.cars.com/shopping/results/?list_price_max=&makes[]=ford&maximum_distance=all&models[]=ford-shelby_gt350&sort=list_price&stock_type=used&zip=29579

There's 2 within 100 miles of me, and one is a 2019 GT350 that they want $78K for. The other is a 2016 that they are trying to sell for about $3k less than original MSRP. If GT350 prices are going down significantly I haven't seen it yet.

I love Carvana for 1 reason. They paid me thousands more for my then 7 year old truck than I paid for it 7 years prior.

I think Carvana and a couple other copycats are the main reason used car prices got so high. I haven't sold to Carvana, but I know for sure I got a better deal on my FiST sale than I would have without Carvana in the picture.

0% finance is an abomination. The time value of money is never zero, even in a <3% inflation environment let alone in a >12% environment. It only came about so people could "afford" the monthly nut on a rapidly climbing MSRP. Actually one hand washes the other - you pick which one is chicken, vs egg.

Now if <5% finance continues to be offered in this developing economic climate it's because the manufacturer is desperate to move units and is prepared to book varying degrees of losses in the process.

0% financing is an incentive to buy. Usually 0% financing is offered rather than a cheaper price on something that the manufacturer is having trouble moving. I got 0% for 8 years on a Kubota tractor a couple years ago. I think it is offered because almost nobody actually NEEDS a tractor. They can be useful for sure, but the 0% financing really makes it easy to purchase one. I agree the money to make a profit is wrapped in there, though. However, 0% financing gives flexibility rather than cutting and increasing the product price the manufacturer can change the interest rate they will offer based on demand. If demand is low, offer deals on financing rather than cutting MSRP and being forced to raise it back up.

 

[JCFoster]

Their vending machine here in Novi, MI was illegally processing paperwork, got fined and then shut down last month.

The corporate response was "it's not our fault Michigan has antiquated paperwork processes that couldn't keep up with our needs."

You can't make up that kind of tone deaf-ness, I sold my 2019 to Vroom, made money on a used car and it was a great transaction, but no way I'd ever do any other business than sell these places a car.

I sold my ‘16 to Carmax and they never test drove the car. All they did was take some pictures and wrote me a check. I thought what a bunch of idiots. Granted nothing was wrong with the car, but dumb founded anyone would do that. And pay almost $30k for it.

 

[cerbomark]

I sold my ‘16 to Carmax and they never test drove the car. All they did was take some pictures and wrote me a check. I thought what a bunch of idiots. Granted nothing was wrong with the car, but dumb founded anyone would do that. And pay almost $30k for it.

That s why I d never buy from them!!!

 

[Cobra Jet]

Down goes another...

Michigan-Based Carvana Dealer Surrenders License For Breaking The Law https://carbuzz.com/news/michigan-based-carvana-dealer-surrenders-license-for-breaking-the-law

 

[MAGS1]

I was talking to the GM of my local Ford dealership today when I brought my car in for service. He said the used market has totally tanked and they’re under water on more than half of their used inventory. He’s just trying to move stuff at this point but with rates where they are and uncertainty in the economy it’s a tough road. New cars are moving because Ford’s financing rates are still good and they can discount them and still make money if needed.

 

[Cobra Jet]

Yea I have quite a few Mustangs staked out and saved within a few classified venues - and have seen price drops anywhere from $3k-$5k in the last 3 weeks.

What was predicted. in Q4 2022 by many, is definitely happening....

 

[Cobra Jet]

wowzers.... hope no one was holding the Carvana stock bag... talk about a hit...

Their stock as of today is down to $7.14; last week (Friday) it was halted for dropping 15% in minutes... it used to be a $200/$300 stock....

I can't see them lasting much longer unless there's some sort of miracle...
https://investors.carvana.com/news-releases/2023/01-17-2023-133020732

 

[shogun32]

I can't see them lasting much longer unless there's some sort of miracle...
https://investors.carvana.com/news-releases/2023/01-17-2023-133020732

this is just insiders protecting their "buy the company out of bankruptcy" scam this play was all along. Buy/Sell cars was just the front for raking in VC cash.

Sponsored