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On the return leg home from an errand... checked out Bronco inventory

baskiboat

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Haha, Im just as guilty as any dealer! I flew to Montana and bought a motorhome, then sold it to a couple who flew up from SoCal for a nice 14k profit. Strange times we live in.
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aldo98229

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Now, I realize “Market Adjustments” seem like highway robbery (because they are so damn high), but the truth is “the Dealer” isn’t the problem: the Market is. You might not know it if your only source of (dis)information is the nightly news, but we are in a heap of trouble. The Global Supply Chain shortages, which are directly attributable to government mandates, has wreaked hell on our economies. We call what is happening “hyper inflation” (shhh, they don’t like that word!), and also “stagflation”. This means costs are rising dramatically quarter after quarter, they can’t seem to stop it, and printing money and handing it out for free isn’t solving the problem, it IS the problem, because that money is devaluing and at the same time demand for goods and services is going up and up and up….

We are in a lot more trouble than most seem to realize or want to acknowledge. Terminating dealers fixes nothing. It just breaks a broken system more.
There’s zero evidence that the dollar is devaluing. In fact, if you look up the USD exchange rates against the Yen and Euro for the past year, you will see that the USD has strengthened slightly from 0.83€ a year ago to 0.88€ today; from 104¥ twelve months ago to 114¥ today.

We are nowhere near having “hyperinflation.” The latest inflation figure is 6.2%, which is high by recent history, but it’s not hyper inflation. We had 12%-22% inflation during the Carter and Reagan administrations, which was tough but still wasn’t anywhere close to hyperinflation. Economists consider hyperinflation to start at 50% and higher. We are nowhere near that.

I don’t know what you mean by “supply chain shortages created by government mandates.” If by that you mean all the tariffs and trade restriction against China the prior administration put in place, then perhaps. But bottom line is China has proved to be an unreliable, untrustworthy ally. So the US, along with several developed economies, are encouraging their manufacturers to relocate their supply lines out of China. This relocation is extremely difficult and is bound to create inflation; especially in the short-term. But that’s a small price to pay to ensure the strategic security of our manufacturing.
 
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Some Random Guy

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I'm somewhat ok with markups.

It has driven used prices up in some markets (well, most, but to varying degrees). It's how I got into my Wrangler. I sold my car with 30k miles on it (A Jetta, not exactly known for holdings it's value) for more than I paid and used the equity to grab my Wrangler. I might do the same here soon if the dealership offers me a few more thousand than they did in December. I'd eliminate my car loan and place an order with Gupton for a 2 door, all while having recovered my original purchase price and all the parts I put into this 4 door.

What I'm not ok with, is all the people who can't afford to wait for a reasonable price on transportation. The people who can least afford it are getting raked over the coals to get into basic used cars they need to get to hold onto their non-blue/white collar jobs. As mentioned earlier, when prices collapse all those people are going to be underwater. It won't be 2008, we're talking about a category that makes less than 10% of household debt vs housing which is closer to 70%, but it will cause problems. And the last thing we need is more government rules or more small dealers going under once that happens. Both stifle competition.

Without markups, we'd have scarcity. 2+ year waitlists for vehicles would become more common. The Model Year transition is bad enough, so in that regard I'd say let those dealers do it (as long as they don't violate a sales agreement on a custom order). I can afford to wait for my 4%/5% below invoice car, even if it takes 3-6 months.
 

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...I stopped to peruse a bit of new inventory.

Welcome to a private showing of three vehicles, displayed here for the first time. Each is valued in its own way, not because of any inherent build quality, but because each captures in the market, illustrated on the window sticker, a frozen moment of an illusory value.

--------------

Our initial offering, a smaller two door in blues and grays. A piece of the past known as the First Edition. Ambitiously priced at ninety nine thousand, inclusive of a forty thousand dollar market adjustment. This one we call simply, A Joke.

Offered to you now, independent front suspension, and all that it implies.


20220116_111814.jpg

20220116_111919.jpg



Objet d'vehicle number two. A four door. Its subject, a base configuration. A gloss white example modestly capable of discharging its yeoman duties. An innocuous example of the breed that will soon find its way to the fuel pump, irrespective of the engine's efficiency rating. This is its market adjustment.

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20220116_112806.jpg



And now, the final specimen. The last of our exhibit has to do with one Samsquanch. Another interpretation presented in plain sight. A trim package that aspires to competence off the tarmac.

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20220116_114146.jpg



Guten abend.
I think I recognize that dealership. Is it in Harrisburg PA? If it’s the one I’m thinking about they will actually honor MSRP if the vehicle is ordered.

I can’t blame them for the pricing though. They had next to no inventory over the summer and if some idiot wants to pay that much, then more power to them.
 

hiimmike

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...I stopped to peruse a bit of new inventory.

Welcome to a private showing of three vehicles, displayed here for the first time. Each is valued in its own way, not because of any inherent build quality, but because each captures in the market, illustrated on the window sticker, a frozen moment of an illusory value.

--------------

Our initial offering, a smaller two door in blues and grays. A piece of the past known as the First Edition. Ambitiously priced at ninety nine thousand, inclusive of a forty thousand dollar market adjustment. This one we call simply, A Joke.

Offered to you now, independent front suspension, and all that it implies.


20220116_111814.jpg

20220116_111919.jpg



Objet d'vehicle number two. A four door. Its subject, a base configuration. A gloss white example modestly capable of discharging its yeoman duties. An innocuous example of the breed that will soon find its way to the fuel pump, irrespective of the engine's efficiency rating. This is its market adjustment.

20220116_112637.jpg

20220116_112806.jpg



And now, the final specimen. The last of our exhibit has to do with one Samsquanch. Another interpretation presented in plain sight. A trim package that aspires to competence off the tarmac.

20220116_114056.jpg

20220116_114146.jpg



Guten abend.
Holy crap!!!! I'm taking my brand new JLUR to PA to sell it after I get it! I will buy a beater and order another Jeep and wait for $20-40k!
 

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hiimmike

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The sad part is, someone with more money than brains will pay up.
It's not about brains... it's about supply and demand. What is something truly worth? It's worth what someone is willing to pay for it. That's how value is determined. Capitalism. I think we should convert the USA to Communism and the government will supply us all with JLUR-XR 392s and pay for our gas. Wait... we'd probably all get a donkey and they'd say, "there's your transportation".
 

Frank R.

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What I'm not ok with, is all the people who can't afford to wait for a reasonable price on transportation. The people who can least afford it are getting raked over the coals to get into basic used cars they need to get to hold onto their non-blue/white collar jobs.
I've pretty much run out of pity for these folks. In my experience - which in this particular vertical is extensive - the vast majority of the payckeck-to-paycheck crowd find themselves in that situation due to a lack of ambition and a history of poor decision making.
 

Fatboy97

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Wait wait wait: Everyone wants to slam dealers and then want to let the manufacturers dictate cost (MSRP) and better, get discounts below that. Well wait a damn minute.

Sale prices aren’t set in a vacuum. I mean, every item you buy has a fixed cost, and what you are paying for has to both cover that cost AND provide a profit to the seller. That’s how money works.

Manufacturers costs have skyrocketed this past year. Steel, Aluminum, Magnesium and Copper have all risen dramatically in price, and auto manufacturers buy all those good not first hand, not second hand, but third and fourth hand through their finished parts suppliers. Add to that the rising costs of electronics, energy (used to manufacture the parts), paints and freight. Together it’s estimated these resources increased the cost of production some +13% over 2021. But there’s more: Those are fixed costs of assets inside the vehicle; on top of that there’s wages to pay for workers and administration - and insurance, and property taxes for the plants that are building the vehicles - and the cost of maintaining both those plants and the equipment inside them necessary for that production to take place. Then there’s taxes on top of that - because manufacturers pay those too…. And they all have to be accounted for in determining the cost of your vehicle. But wait, there‘s more:

When talking about these “soft costs”; labour, insurance, taxes, maintenance, administration, etc), well those costs burden sell price based on a fixed volume of production: What I mean is, imagine Brand X builds 100 vehicles a year every year, and has an annual soft cost of $100 that covers the entire plant and employee salary base. Now imagine that Due to supply chain shortages, Brand X had to slash production from 100 vehicles a year to 20…. But their soft costs are fixed (they actually rose this year) - regardless, that $100 needs to be spread out over these 20 vehicles, not 100 - a five fold increase in price.

“Hey!” You say, MSRP didn’t jump that much across the brand though! That might be true of certain models, but MSRP IS created in a vacuum (to an extent). It has little to do with fixed cost, and is instead intended to address a “reasonable” (as determined by the manufacturer, not the dealer) cost of sale plus profit for the dealer. By failing to raise MSRP, the manufacturer is playing the role
Of “Mr Nice Guy”. “Hey folks, we are looking out for your interest, we are eating added costs to put you behind the wheel of this new 2022 beauty!” They aint.

The dealer also has fixed soft costs. Property and taxes and wages only go away when you close down dealerships and layoff or fire workers. Dealers too live on fixed margins and have to pay their bills if they want to survive - but when the manufacture they represent can only deliver 1/5th of The vehicles they order for the year, then those soft costs have to be covered by a greater portion of their value being applied to each sale. The alternative? Bankruptcy.

“Hey!” You say. “That makes my argument for me! Close all dealers and let manufacturers sell direct!”

my friends, manufacturers don’t have a support network of their own. They rely on their dealers for that. Manufacturers sell to dealers at a set discount rate and in turn force dealers to pay license fees to sell those vehicles, and pay for sales and service training, and to stock a set number of vehicles and parts maintain and repair them. Manufacturers and their Dealers don’t have a parasitic relationship, they have a symbiotic one. Without Dealers, Manufacturers can’t sell their parts regularly, they can’t sell their training or their licenses…. And those are things the manufacturers sell at Margins 5x higher than they sell their actual vehicles for….If they didn’t have a customer base for that, then they would have to raise prices across the board on all products (from vehicles to parts to services) just to stay afloat. But it gets worse: Without Dealers and their lucrative service revenues, the Manufacturers would have to establish their OWN brick and mortar service Centers, and stock the parts required for repairs and maintenance on their own dime, instead of the dealers. Those are added costs to the manufacturer, who isn’t set up to address them - and added administration costs, as they have to build the network to keep those service Centers profitable.

Now, I realize “Market Adjustments” seem like highway robbery (because they are so damn high), but the truth is “the Dealer” isn’t the problem: the Market is. You might not know it if your only source of (dis)information is the nightly news, but we are in a heap of trouble. The Global Supply Chain shortages, which are directly attributable to government mandates, has wreaked hell on our economies. We call what is happening “hyper inflation” (shhh, they don’t like that word!), and also “stagflation”. This means costs are rising dramatically quarter after quarter, they can’t seem to stop it, and printing money and handing it out for free isn’t solving the problem, it IS the problem, because that money is devaluing and at the same time demand for goods and services is going up and up and up….

We are in a lot more trouble than most seem to realize or want to acknowledge. Terminating dealers fixes nothing. It just breaks a broken system more.
And don’t forget about the massive profits these companies have reported this past couple years.
 

SouthCo

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I can't help but laugh at the Bronco obession on this Jeep forum lol! Nothing against you OP. Sure are a lot threads about the Bronco and they all go for pages and pages...
 

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Jeep Wrangler JL On the return leg home from an errand... checked out Bronco inventory 83131DCA-76A1-465D-9CA8-7CE61E04B9B3


A couple weeks ago at Gaudin Ford in Las Vegas. Nice little markup for the soft top. Dealer even removed the model sticker from the front quarter panel of the Bronco so I couldn’t tell if it was a BD or BL etc.
 

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aldo98229

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It's not about brains... it's about supply and demand. What is something truly worth? It's worth what someone is willing to pay for it. That's how value is determined. Capitalism. I think we should convert the USA to Communism and the government will supply us all with JLUR-XR 392s and pay for our gas. Wait... we'd probably all get a donkey and they'd say, "there's your transportation".
:LOL: :LOL: :LOL:
 

Some Random Guy

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I've pretty much run out of pity for these folks. In my experience - which in this particular vertical is extensive - the vast majority of the payckeck-to-paycheck crowd find themselves in that situation due to a lack of ambition and a history of poor decision making.
Slightly adjusted scope here, I work with a lot of people who live paycheck to paycheck and I didn't expect it due to their middle-class or above wages. While I agree that personal responsibility can get you out of it, the fact remains that over half the US population lives that way. What's bad for over half the population will have knock-on effects for the rest of us (so like 2008, but hopefully not as bad). Not saying you need to have pity, but even with selfish reason I think we should be more cognizant of their issues and not totally dismissive else we suffer the consequences.
I'm not smart enough to know what to do about it, or what might happen if things go bad for them. Hopefully just a bunch of repo's and a weird cycle of glut/shortages in the sub-$20k used market. Or the government will usher in an era of subsidized mass-transit/electrical vehicle leases to get everyone back to work.
 

The Last Cowboy

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There is plenty of inexpensive transportation out there. But these days, those people who should be buying cheap cars don't seem to want them. They will sign 7-8 year loans so they can have the popular model with the big screen. Then they will trash it in 2 years. The same cycle, over and over.

You can still buy new Mitsubishis dirt cheap. 2-3 year old cars and trucks with over 150k miles are still a good buy and have many good years left in them. 5 year old cars that weren't popular when new (i.e. Buicks) are good buys used.

Jeeps (Wranglers) will always be expensive because they are always cool, even when beat up and old. The same goes with most pickups and Broncos will probably follow suit. I have noticed that SUV buyers are a fickle crowd. When body styles change, the previous generation goes way down in value, as the fashion conscious trade them in right away. It's the same with luxury cars too.
 
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Some Random Guy

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There is plenty of inexpensive transportation out there. But these days, those people who should be buying cheap cars don't seem to want them. They will sign 7-8 year loans so they can have the popular model with the big screen. Then they will trash it in 2 years. The same cycle, over and over.

You can still buy new Mitsubishis dirt cheap. 2-3 year old cars and trucks with over 150k miles are still a good buy and have many good years left in them. 5 year old cars that weren't popular when new (Buicks) re good buys used.

Jeeps (Wranglers) will always be expensive because they are always cool, even when beat up and old. The same goes with most pickups and Broncos will probably follow suit. I have noticed that SUV buyers are a fickle crowd. When body styles change, the previous generation goes way down in value, as the fashion conscious trade them in right away. It's the same with luxury cars too.
Yeah, the 84/72 month loans set people up pretty bad. Similar issue, underwater for too long.
Funny you mention the Mirage. Jalopnik found some pretty intense markups on those Mitsubishi's. Not saying you can't find good stuff, but that's my go-to recommendation when someone's looking for a cheap car with some sort of warranty. I almost bought the 5-speed Mirage! I was smiling the entire time I was slamming it through gears and making that tiny engine scream.
 

LDYDRVN

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“Thing is, while dealers operate on a weekly or month-to-month horizon, most buyers operate on 3 or 5-year horizon. Which means they will still remember that time the dealer tried to rip them off five years ago, even if all the staff responsible have long left the dealership.”


This is exactly why I bought my Jeep from Karmart in Buringtone rather than Raidon’s, bad experience from the Kirkland Dealership.
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