Will the pandemic economy cause a drop in new car prices?

[Alfisti]

So for new car prices, i guess they only drop significantly if things are catastrophic and any revenue is better than no revenue given the cars were made already.

[PoorLurker]

Originally Posted by secretsquirrel

Something that cannot be discounted is the loss of appeal of luxury items the longer we stay in social distancing mode. The longer we stay like this, the more likely people are to reset their priorities. High priced luxury items are going to see a big hit even after we return to normal from social distancing. Some people will always want them, but I think you'll see less people stretching and making as many financial sacrifices for them.

I can see that but quarantine life and flossing designer stuff is still easily hashtagged and "flexed" for people on social media.

Today's day and age - do people really buy fancy things for their immediate friends or for their "followers" and potential followers?

Fake it till you make it has never been so real.

Personally, I care less about designer stuff right now. As I get older my priorities start to shift to other areas.

[TorontoGambler]

Originally Posted by Alfisti

Still stunned by the positivity here. Despite the "church and guns" feel of this place most are well educated and bright but i see a ... i dunno ... a failure to realise the monumental shit we are in economically.

This will be bad.

You and I are fully aligned. I assume there are a few people in here who have taken economics, but maybe not. This isn’t a part of the economy that’s gone bad in a single country, this is a global recession, but hey I could be wrong.

[TorontoGambler]

Originally Posted by JamesNoBrakes

Things cost money to make. They won't be selling them at a loss, unless we are talking a few that are on-hand at a dealer, but they, just like everyone else, are going to do everything they possibly can to not do this, most likely it'll be the models that no one wants, like some ugly BMW GTs and 4cyl cayman. The manufacturer will right-size with demand, so instead of producing current-demand amount, it'll be right-sized to the amount of demand that actually exists. Prices may go up due to this, but as long as they can streamline manufacturing, by laying off people, selling assets, heck, going into bankruptcy, then that's what they'll do. They won't sit around and sell a car for 40K that costs 50K to make. Ain't going to happen.

Sorry but yes it will. I’ve worked fir a few of the biggest companies in the world. WE DO NOT PREP FOR THIS! Our fixed costs are enormous, and although we have a ridiculously healthy balance sheet we’re hoarding cash because revenue is 100% going to go down. We’ll do our best to sell our products on strategy but after 3 weeks we’ve already seen our margins drop. As this goes on we’ll fully abondon margin altogether to protect top line sales and share of market with the hope that we can get back to where we were before this happened but in the meantime we’ll reduce prices as much as is required to keep the lights on. Price increases are coming wherever the market thinks they can sustain them but that’s not today or anytime soon. The optimism is strange, people ge really think the worst, the time fir that is now and everyone thinks the best!! It may not effect any of you, I hope it douesn’t but this will have a negative impact globally for a tonne of people. Stay safe and for the love of god stay away from others.

[surge98]

For what it's worth, I bought my 1 series at the peak of the last recession. The best deal I could get was $500 over invoice plus the year-end $1000 off through BMW, financing 50% of the total cost at 4.5%. I also got a $500 tax credit for buying a car that year. Before all this hit, the standard $3750 in incentives was already a much better deal than what I could get back then. I have cash set aside for a new 2 series, I'll be very interested in seeing what incentives are offered next week. I doubt the deals will be as good on an ordered car, but maybe I can get 9-10% off MSRP instead of 7-8%.

I see one person saying that things will be back to normal in six months and one person saying it will take 3-5 years. The truth is probably somewhere in between, but this is so much scarier than 2008 for the simple reason that we are not dealing with a man-made crisis. Ben Bernanke went on 60 Minutes in March of 2009 and pledged to do whatever was necessary to prevent another major bank from failing. Once that was off the table, the recession was officially over within three months.

I think this has the potential to permanently alter our way of life. The economy will bounce back, but how many people will want to go to a movie, concert, or sporting event when this is all over? How about going on a cruise, stuffing yourself into a middle airplane seat between two people who are coughing, or going to a business conference with thousands of other people who have been traveling? Travel, hospitality, and entertainment are going to get crushed, and no amount of government bailout money is going to bring customers back to those industries for a very long time.

[flybigjet]

Originally Posted by surge98

For what it's worth, I bought my 1 series at the peak of the last recession. The best deal I could get was $500 over invoice plus the year-end $1000 off through BMW, financing 50% of the total cost at 4.5%. I also got a $500 tax credit for buying a car that year. Before all this hit, the standard $3750 in incentives was already a much better deal than what I could get back then. I have cash set aside for a new 2 series, I'll be very interested in seeing what incentives are offered next week. I doubt the deals will be as good on an ordered car, but maybe I can get 9-10% off MSRP instead of 7-8%.

I see one person saying that things will be back to normal in six months and one person saying it will take 3-5 years. The truth is probably somewhere in between, but this is so much scarier than 2008 for the simple reason that we are not dealing with a man-made crisis. Ben Bernanke went on 60 Minutes in March of 2009 and pledged to do whatever was necessary to prevent another major bank from failing. Once that was off the table, the recession was officially over within three months.

I think this has the potential to permanently alter our way of life. The economy will bounce back, but how many people will want to go to a movie, concert, or sporting event when this is all over? How about going on a cruise, stuffing yourself into a middle airplane seat between two people who are coughing, or going to a business conference with thousands of other people who have been traveling? Travel, hospitality, and entertainment are going to get crushed, and no amount of government bailout money is going to bring customers back to those industries for a very long time.

The key is a VACCINE. How often do you avoid concerts, movies, flying simply because it's flu season?

With a vaccine, this CV critter gets more or less taken out of the equation.

And, if it takes out the anti-vax crowd..... well, that's why they call it natural selection.

Just my 0.03.

R.

[EarnestineJohnson]

Yes, Price will go down because those who wanted to buy car in 2020 is going to face trouble while purchasing any liability, They will only focus on purchasing assets..
So, I think auto prices will automatically goes down.

cps test

[RM7]

Originally Posted by flybigjet

The key is a VACCINE. How often do you avoid concerts, movies, flying simply because it's flu season?

With a vaccine, this CV critter gets more or less taken out of the equation.

And, if it takes out the anti-vax crowd..... well, that's why they call it natural selection.

Just my 0.03.

R.

Yeah, people, as a whole, have a memory of about 5 seconds.

[chris719]

Originally Posted by EarnestineJohnson

Yes, Price will go down because those who wanted to buy car in 2020 is going to face trouble while purchasing any liability, They will only focus on purchasing assets..
So, I think auto prices will automatically goes down.

Especially on cars that are considered luxuries. I got my Z4M in 2008 for around 15k off. It wasn't a hot seller anyway and there was "trunk money", but they just could not move it between the manual transmission and demand for a roadster in a recession. It was in the showroom for months.

[Flacht3]

Originally Posted by TorontoGambler

You and I are fully aligned. I assume there are a few people in here who have taken economics, but maybe not. This isn’t a part of the economy that’s gone bad in a single country, this is a global recession, but hey I could be wrong.

For what it's worth, you rarely get a massive recession in a "single country" at this point without it impacting other countries. Global markets are too intertwined.

Lot's of opinions in this thread, but the truth is no one has the answer. We can only take educated guesses and prepare ourselves for what's coming (really, already here).

But we have NEVER seen a cause like this. We essentially had to pull the plug on the economy (shut down businesses, yank jobs from the market, etc.) overnight. And once the curves flatten, we'll gradually start bringing them back online. This is very different than systematic recessions of the past.


I think of it like this:

We just unplugged the router (massive exponential unemployment), and need to keep it off (unemployment won't get better) but will plug it back in soon, once the system boots back up (jobs will come back online) we'll gradually return to normal. Yes there will be pain and it will still be a recovery, but it's very different vs. in the 2008, the router was broken and it took us a long time to decide how to fix it and find the right replacement parts.

[jamesinaz]

Originally Posted by Flacht3

For what it's worth, you rarely get a massive recession in a "single country" at this point without it impacting other countries. Global markets are too intertwined.

Lot's of opinions in this thread, but the truth is no one has the answer. We can only take educated guesses and prepare ourselves for what's coming (really, already here).

But we have NEVER seen a cause like this. We essentially had to pull the plug on the economy (shut down businesses, yank jobs from the market, etc.) overnight. And once the curves flatten, we'll gradually start bringing them back online. This is very different than systematic recessions of the past.


I think of it like this:

We just unplugged the router (massive exponential unemployment), and need to keep it off (unemployment won't get better) but will plug it back in soon, once the system boots back up (jobs will come back online) we'll gradually return to normal. Yes there will be pain and it will still be a recovery, but it's very different vs. in the 2008, the router was broken and it took us a long time to decide how to fix it and find the right replacement parts.

Interesting analogy. Time will tell how deep this goes. My concern would be mild if most nations had minimal debt. But I wonder how this will play out with most nations printing money and kicking the financial can down the road for years.

Well short term I am wondering if I'll get a good deal on a car in June. My lease is up then.

[TorontoGambler]

Originally Posted by Flacht3

For what it's worth, you rarely get a massive recession in a "single country" at this point without it impacting other countries. Global markets are too intertwined.

Lot's of opinions in this thread, but the truth is no one has the answer. We can only take educated guesses and prepare ourselves for what's coming (really, already here).

But we have NEVER seen a cause like this. We essentially had to pull the plug on the economy (shut down businesses, yank jobs from the market, etc.) overnight. And once the curves flatten, we'll gradually start bringing them back online. This is very different than systematic recessions of the past.


I think of it like this:

We just unplugged the router (massive exponential unemployment), and need to keep it off (unemployment won't get better) but will plug it back in soon, once the system boots back up (jobs will come back online) we'll gradually return to normal. Yes there will be pain and it will still be a recovery, but it's very different vs. in the 2008, the router was broken and it took us a long time to decide how to fix it and find the right replacement parts.

Agreed. To be clear I didn’t say a single country recession, I said this isn’t stemming from an economic issue in a single country. As in how US banking impacted the world, this is exponentially worse as multiple countries have economic issues and as you’ve said we’re all intertwined. It’s not about having the answers at this point its about coming together and understanding this is real and everyone doing their part. Just shocks me that on a forum essentially for the elite there seems to be 50% with their head in the sand thinking this was goi g to last a week or two. I assume more are waking up to reality now but I thought that 3 weeks ago.

[Alfisti]

One of my wife's business partners is STILL saying all good within a few weeks. We were on the phone and tried to hammer down on the realities but he still sys it'll all be fine soon enough. Like really?

[383vett]

This is supposed to be the week with the worst number of cases. Spain and NY showing slight improvements. Hopefully will continue...

[damnitBobby]

I’m looking for a daily beater and have the ‘20 Mazda CX-5 at the top of my list. Gonna wait till May or June before I start emailing stealerships lowball offers.

[advrider6510]

The COVID-19 crisis could cause U.S. new vehicle sales to fall by as many as 2.4 million units from 2019. In the event of the situation lasting much longer, the effects would likely be much more severe. It all means reduced foot traffic into dealerships, which is likely to result in fewer sales. Even before the crisis was designated a pandemic, dealers already had a negative view of the market. It's not clear if anyone will be there to actually buy the cars ..

[gatorfast]

Seems like most of the dealerships around me are offering complete service at your home and at your convenience. If you want to purchase or even test drive a vehicle they will bring it to you. This sounds like something that can stay in place even after covid goes away so people can avoid the awful dealership experience and test/purchase at their convenience.

[RM7]

Originally Posted by gatorfast

Seems like most of the dealerships around me are offering complete service at your home and at your convenience. If you want to purchase or even test drive a vehicle they will bring it to you. This sounds like something that can stay in place even after covid goes away so people can avoid the awful dealership experience and test/purchase at their convenience.

Maybe this will fundamentally change the dealer system, which is long overdue for modernization. IMO, there are way too many of them.

[gatorfast]

Originally Posted by JamesNoBrakes

Maybe, this will fundamentally change the dealer system, which is long overdue for modernization. IMO, there are way too many of them.

Agreed. Most people hate the car buying experience because you sit for hours at the dealership waiting and waiting. Wait for the "finance guy" or the "manager" or whatever. Takes 4+ hours just to buy a damn car.

[advrider6510]

I am getting promotional emails for new and used cars!!!

[jamesinaz]

Originally Posted by advrider6510

I am getting promotional emails for new and used cars!!!

Still waiting here. Well getting like 0% interest promotions. Looking for some real discount offers.

[RM7]

Originally Posted by jamesinaz

Still waiting here. Well getting like 0% interest promotions. Looking for some real discount offers.

Going to take a few months IMO, at this point creditors, land-owners, etc., are letting payments slide for a bit, but it's not going to stay that way. Probably see something significant towards the end of May?