Used Car Price Bubble - Jeep Impacts

[hoag4147]

Today we saw the base price of a 4xe increase by about 1500! I haven't had a chance to review other vehicles yet.



On my POC I have a base MSRP of 77,095 for the 392. I believe a few days ago it was 74,800, and the orders that I have submitted for customers have also increased by that amount.

Base Rubi with v6 etorq went up $1400

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[CorvetteOJ]

I haven't posted on this forum in years, but I just had a recent experience on Dec 29th, trading my 17 JK Wrangler Limited Sport, with 21K miles, on a new '21 JLU Rubicon Extreme, loaded. MSRP on my JK was $33K, we paid $29K. Two weeks ago, the dealership gave us $28K on the trade, selling the Rubicon at MSRP. They had our JK on their web site listed for $34,900. They evidently sold it Saturday because it is no longer on their web site. It was a great deal for us, but I can't believe it sold for $33 or $34K after 4 years.

 

[rayzjeep]

Need to sell mine before the bubble bursts so I can pick up a 392....

 

[five9dak]

Prices will never return to "normal", the money supply was significantly expanded.

 

[SouthernJL]

I haven't posted on this forum in years, but I just had a recent experience on Dec 29th, trading my 17 JK Wrangler Limited Sport, with 21K miles, on a new '21 JLU Rubicon Extreme, loaded. MSRP on my JK was $33K, we paid $29K. Two weeks ago, the dealership gave us $28K on the trade, selling the Rubicon at MSRP. They had our JK on their web site listed for $34,900. They evidently sold it Saturday because it is no longer on their web site. It was a great deal for us, but I can't believe it sold for $33 or $34K after 4 years.

That's almost a mirror image of what happened to me. Sold my 2014 JKU with over 60k miles in March of 2021 for $29,200. I paid $27k for it 2 years earlier with 31k miles. I did add lift, tires, gears, and some other items, not to mention paid interest on the loan so I don't want to pretend I made a profit. However I know I got more for it than I would have in normal economic times.

I posted it on Cargurus and had someone claiming to be a buyer for dealerships call me to buy at my full asking price. Thought it was weird and possibly a scam but it turned out to be legit. This was almost a year ago so I had no idea we were entering a used car bubble and prices were about to skyrocket, I was just happy to get $29k on a vehicle I paid $27k on.... I didn't asking any questions.

It sold less than 2 weeks later on the car dealership website for $36k. It's funny how I felt like I was on the winning side of the deal when I sold it but later I felt cheated when I saw it sell for $7k more, lol.

That was my first indication that the market was in unprecedented times.

 

[JuzaMe]

Day late and a dollar (or $1600) short! I got a 'Configuration Preview' for my 2022 JLURD late Friday...salesman was off over the weekend, while we were going over everything yesterday, I get an "Oh wow!" from him followed by the bad news of the $1600 increase. Jeeez, talk about BAD timing!

 

[macphisto13]

They have 0% for 36 months on Wranglers right now.

I could only see this for 2021 models. Are they offering this for 2022 models too?

 

[Wbino]

As a recent owner of a Jeep and just like a home ownership I hope the bubble does not burst any time soon.

 

[Buschman]

I would assume once the supply chain issues have been resolved inventory will increase and that would result in the 5%-10% off MSRP returning. I personally think things have a good chance of getting much worse. If the government quits printing "free money, raises interest rates and gas hits $5 a gallon we are in for a rocky road. I can't imagine that we stay on this same course much longer, but I've been wrong many times before......

 

[Buschman]

I joined here because I test drove a coworkers Eco diesel Rubicon and really liked it. It seems like in just the last month new inventory has dropped to zero where I live. I'm just being patient and seeing what happens next. Thats good because I'm learning a lot reading this forum about JL's in the meantime.

 

[Overland Utah]

There is no ETA for when the "supply chain" will be back to normal, frankly this could be the new normal moving forward for quite some time. That is because it is more than just one factor, we often hear chip shortage which was a major culprit but in addition to that, its transportation, labor shortages, inflation, and a crazy amount of demand which has all been driven by the pandemic. The answer, is the car market will return to normal when life returns to normal... but what is normal anymore, this "pandemic" was going to be a quick 2 week lockdown yet here we are 2 years later.

 

[Cjanak21]

I would assume once the supply chain issues have been resolved inventory will increase and that would result in the 5%-10% off MSRP returning. I personally think things have a good chance of getting much worse. If the government quits printing "free money, raises interest rates and gas hits $5 a gallon we are in for a rocky road. I can't imagine that we stay on this same course much longer, but I've been wrong many times before......

Agree, but we still can get 5-10% off MSRP now, I'm buying cash from Gupton for 11.XX% off MSRP or so and you can get a better discount if you finance

 

[runningshoes]

There already is an increase in volume of chips for automotive, lot of it at the expense of other markets, and around midyear there is new capacity coming on for the automotive companies. In terms of prices, I'd expect new car prices to come down first as once the production lines get ramped up, no one wants to shut them down again and there will be a broader mix of vehicles at lower price points leaving the plants (someone posted earlier that most companies are selling higher margin vehicles right now because of the shortages).

At that point, expect used car prices to start dropping fast since they have gone up much more than new car prices and at a certain price point for used, you're better off buying new. If I had to guess, I would say 4th of July deals from the new car companies.

 

[four low]

What will happen when the thousands of vehicles stored finally get the chips they require to be sold?
They were sidelined in 2021, and here is model year 2022.
A manufacturer dilemma, how to balance higher prices vs the backlog of last year's unsold - due - to no chips ?

 

[MerPinXEss]

Inflation is up because of loose monetary policy, supply is down which is causing price increases of its own. Supply doesnt change overnight, and even with monetary tightening Feds goal is to prevent negative inflation(read growth)...
Manufacturers are raising prices to reflect what dealers are already doing(asking over msrp/adding markup with stuff). The truth of the matter is gas wont go back to $1/gallon, and you wont be able to buy a 2022 jeep for 1980 jeep price(MSRP$6.5k).
https://www.officialdata.org/us/inflation/1800?amount=1
Car sales have busy months and slow months throught the year, if we can get over closings from covid and the whole supply chain back manufacturers will be able to over produce a given month's demand and get supply back to 'normal'.
But as fall is the first chance to catchup, and we have been through 2 falls with covid so far, it will take a 3rd or 4th with a robust supply chain to depress supply side pressure, but the past inflation will still remain...here is current supply chain news. No time to be fearful of a crash for a few years yet, and by then inflation will make a 60k jeep 80k.
https://www.nytimes.com/2022/01/16/business/economy/china-supply-chain-covid-lockdowns.html

Warren Buffett, "be fearful when others are greedy, and greedy when others are fearful.”

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