I keep reading about how the U.S. economy is in such bad shape and that people are out of work. Yet when I try to buy a new minivan, either Toyota or Honda, I’m told “You have to wait three months to get your choice of color and options and you have to pay list price.” What I want is a 2005 Honda Odyssey, Touring trim, white, with nav system (the center windows go up and down on the Odyssey, making it good for dogs). The list price is something like $35,000 and presumably dealer profit is around $3000. Toyota dealers were selling leftover 2004 Siennas for nearly list price as well! If one listens to the John Kerry supporters here in Cambridge it sounds like doomsday for the U.S. economy. If one walks into the local car dealer, however, it is apparent that the minivan-buying middle class has a lot more cash than back in 1998 when I bought my Sienna for $500 over invoice.
[p.s. I’m going down to NYC tonight through Sunday morning. More evidence that the economy is booming is supplied by the fact that nearly every Broadway show is sold out, despite $100+ ticket prices. Any NY locals reading this blog with ideas for Thu, Fri, and Sat evenings?]
I’m not sure that the people who are buying, even at list or better, necessarily have the money to pay for the thing.
I think the real issue is why in the world are you buying a *white* minivan? 🙂
Supply is down due to the poor economy!
… of course, you can be at danger of drawing misleading conclusions with one data point. You might find the economy as measured by Oldsmobiles is doing pretty badly.
White cars are easier to keep cool–important when transporting dogs.
Yeah, same thing with the houses.
If things are so bad and everybody is getting laid off left and right, then why no car dealers seem to be going out of business? Why is it that it is impossible to buy a new house in north virginia for less than half a million?
Could it be because it’s not the rich people who are losing the jobs ? i.e The people who are losing their jobs wouldn’t be buying cars and houses and going to broadway anyway.
Lol. You should try going to GM, Ford, or Chrysler. I’m sure you’d have no problem buying one of their minivans for less than invoice and get 0% financing. The Odyssey is really nice. People pay for quality. You should be able to get $750 off of list though if you shop around a little.
I think the federal reserve is being forced to hide the real inflation numbers from people, there has to be some reason they are keeping rates this artifically low. I’m sure it is related to the housing bubble.
Well, what do you expect when you are trying to buy one of the most highly anticipated minivans (both ’04 Sienna and ’05 Odyssey). Lots of people have been waiting for those redesigns for years…
Here is another data point, I bought a new ’04 Odyssey in the Bay Area in June for $800 below invoice. Also, a huge GM/Chrylser dealship (500 car+) closed shop in July. This is in Cupertino, where every third car you see is a late model European sedan and medium housing price is $650k.
W.r.t. broadway tickets, if you’ve got the time you can try your luck getting day-of tickets at the TKTS booth in the middle of Times Square. Get there early and they only take cash.
My guess is that minivans are (in a strictly economic sense) an inferior good, since they’re cheaper to run and in some cases cheaper to buy.
Back in ’98 when gas was a buck a gallon and day traders were getting rich, everybody who was anybody bought a Ford Expedition (or a Lincoln Navigator if your job title started with a ‘C’). Now people are looking for something a little more sensible.
What a typical northeastern elitist, thinking you can judge the state of the whole economy based on sales of $35K plus vehicles around Boston.
Yea… I’ve heard the wait on a yacht is pretty long too.
The economy is doing well for upper middle class (median income > 85k)… and so demand for things that they can afford (like broadway tickets and 35k autos) is high. When Kerry talks about the economy, he’s talking about the “middle class” with a median household income around 50k. They are not buying 35k autos… they are buying new/used domestics, which last I checked were selling for a little over invoice with plenty of incentives and financing deals. I’d get a new way to measure the economy.
Number of issues.
1. All high tech stocks are up
2. Dollar is continuing to loose value. Better have minivan than to keep money in the bank
3. Those who survived downturn in high tech look in the future without fear.
4. Those who didn’t (43% in Bay Area) moved from high tech and don’t have money.
5. Probably Boston area finally is going up after been fired by major defense companies and
DEC crash.
6. Inflation. In 1999 you can get Nissan Quest entry model for 18K now entry model of Siena/Odyssey is 23K which is 25% increase.
Good Gates! I hope you’re purposefully injecting a snide, shortsighted anecdotal reference that is only relevant to an affluent individual like yourself, and do not truly believe the tripe you posted.
For the top fifth Americans, things are booming. High-end sales are up, Neiman Marcus, other high-end retailers are recording record profits. But revenues are down for K-Mart, Wal-mart and low end stores. Market is also very good for high-end housing, and real estate market is still good for those.
For working people, economy is still in state of malaise, not total depression, but just not going anywhere – median income is down, folks, on average are holding down more jobs that pay less with less security (for the lower 60% of Americans).
Bankruptcies, personal debt level, and foreclosures are at record levels.
Ah, the economic equivalent of, “If global warming is such a problem, why is it so cold outside?” Anecdotal evidence isn’t a great way to gauge overall trends, because it’s too easy to find a few data points that contradict the curve.
Feel free to peruse the Census Bureau’s report on “Income, Poverty, and Health Insurance 2003” (http://www.census.gov/hhes/income/income03/prs04asc.html) for signs of an economy in mild distress.
Health insurance, like Broadway tickets and Honda minivans, is expensive and difficult to get. I wouldn’t say it’s a sign of a booming economy, though.
Ditto to Mike’s post. Around the lower-middle class area I live, many people are out of jobs and certainly, people here aren’t out buying expensive minivans. However, I do observe improvement in employment recently which is very good.
People used to buy SUVs is lieu of minivans. Now oil is expensive and people are dying in Iraq, so at long last the gas-guzzling SUV is no longer trendy.
If you run a Google News search, you’ll see car industry execs claiming SUV sales are fine. But they don’t mention people aren’t paying list anymore and they are allegedly pouring money into incentives. And sales were down in August.
I love that people are calling you elitist for buying a *mini-van*.
What a bunch of nervous nellies you’ve attracted to your blog, Phil! They get all verklempt over the possibility that somewhere a crack whore might be getting priced out of a 1977 Cadillac to sleep in… a few weeks ago I was in Chicago and the Blue Man Group was near-capacity, on a Wednesday night, in October (not tourist season); so that’s another data point for you as well.
Also the local construction guys (Lancaster, PA) of any stripe, from big steel I-beam makers to local excavators with a couple of bulldozers, are all busy and working and driving around in late model $50K Cummins diesel crew cab pickups. Maybe they are economizing, since the Cummins diesels can get around 25mpg.
Gee, Phil, you’re traveling in the wrong circles if you want to see the true story on the economy. And so is Patrick G. I’m working for a computer company making real good money and I’m driving a 1989 Toyota wagon and a 1992 Camry that I just bought for $2,500 with 125,000 miles on it, because the odds of me getting laid off within the year are astronomical. Them that’s got are doing fine. Them that don’t are doing much worse, and you won’t see them in line for Blue Man group either. I’ve got a 62-year-old data modeling friend who drove a Mercedes SUV. He’d been in the business since the late ’60s and they laid him off and hired 5 offshoreans at half the total price. I don’t think he’s going to Blue Man Group these days either.
“Them that’s got are doing fine. Them that don’t are doing much worse”
In other news, extensive investigation reveals water to be wet.
Seriously, man…that’s _always_ true. It’s true _by definition_.
My car has more miles and cost me less money than yours. BFD. Even at the practically-paying-you-to-take-them-away rates available on new American cars to buyers with good credit, a new car is still a sucker bet, regardless of how rich you are.
I’ve said it before and I’ll say it again…if your standards were set by working in the computer industry in a tech-obsessed city during the boom years, they’re too high to be realistic today. I guess I’m lucky…I’ve never taken a cut in net pay between jobs, which means that as of today, between a day job and my own business, I’m earning an annual sum that might only have been casually spit at in California in the late ’90s.
Some people won’t be happy until the boom is back. But frankly, I sleep a lot better at night now, knowing that my financial situation isn’t built on a foundation made of clouds.
I don’t know what it is with goverments declaring economies bad. A few weeks ago I was back in the Netherlands and my brother was telling me how the goverment (led by prime minister Ned Flanders) made people believe the economy was bad.
This came as a total surprise to me as in the international press over the last year I have only been reading good things about the Dutch ecomony. They do voice concerns like stagnating growth and the strain on public services, but on the whole it is used as an example of an ecomony coping very well and moving forward.
Does the goverment know something international analysts don’t?
Interest rates are still at historical lows. Consumers are increasing their debt loads. Interest rates are historically always lower just before a US election. If stagflation hits (like in the 70s) and interest rates go up to 8% you’ll notice the dealers will be fairly empty.
I’m going to have to go ahead and agree with some of the folks here who are attacking you for judging things on $35K cars and Broadway tickets.
Movie tickets here are now well over $10 [so don’t see a movie this weekend]. In Boston, I can’t imagine things are that much different. But for everything West of the Deleware, its not really the same sense.
I have a friend at an Ohio state phd program who, while earning a smaller stipend has more spending money than a friend attending Harvard, and who has a larger stipend. The difference is about $350 dollars a month in rent; car insurance is dramatically cheaper; alcohol and peanut butter is cheaper. Essentially, its just cheaper.
Now at the same time, Boston and New York also have a lot of rich people to pay for the high end lifestyle; don’t forget, NJ and CT are vying for wealthiest state status, and we’re both big suburbs of New York City– thus your broadway shows are sold out.
So people with a lot of money may not be having a hard time, is this a surprise?
No, its not.
Phil-
Go see Jewtopia in NY– it is very cute. Plus- I believe it is relevant to your current plight 🙂
Good Luck!
Sarah
Phil… Here in L.A. you can count on every up-blip in the mortgage interest rate to bring out the TV media and produce a “financially crushed Mexican” who states “I was just about to buy my first house, and the interest rates went up, and now I can’t afford a home!” Nobody ever checks to see if the guy actually had opened escrow, or had a $ in the bank, but nonetheless such point-examination (sample size = 1) is used to make the point that “the economic sky is falling”.
In Florida you can’t buy plywood (back-to-back-to-back hurricanes). Extrapolated to Phil-world, “there is a tree shortage!”.
In NYC, where the median income (at least of theater-goers) is a Zillion-$ and population-density approaches India, and the number of theaters is fixed, of course ticket prices are high.
Phil: Get a nice used Economics-101 book. Read up on “supply and demand”. Note that the theory works not only for Honda Odyssey, but for workers too (note that since 9/11, anybody with a Top Secret security clearance operates on the Financial Gravy Train).
Phil, I give you credit. I swear even though you *must* sense that a posting is going to get you bombed, you do it anyway.
Don’t buy a minivan– women want a guy with a cool car. Keep your old car to transport your dog and buy a red sports car. Plus– aren’t you old enough to be going through your midlife crisis now. Buy the sportscar! You won’t have to wait as long.
Kelly 🙂
Kelly: Thanks for the tip. I’m don’t want to advertise my midlife crisis to the world by buying a sports car. Also, my $500/square foot condo only came with one parking spot and it is a driveway not a garage. So I don’t want to get a beautiful car and watch it decay outdoors. Finally there is the question of just how many vehicles it makes sense to own unless one has a full-time staff to maintain them. How would one have time to hang out with friends, read books, walk the dog in the woods, etc. if one were constantly shuttling vehicles to repair shops?
Everyone else: Of course I was having some fun by generalizing from this one data point. But Japanese minivans are not sold at Sothebys to the select few. They are made by the 100,000s and are in short supply all over the U.S. (being an airplane guy I made a few calls to dealers up to 1000 miles from Boston and nobody was willing to sell a Sienna or Odyssey for much below MSRP (even in West Virginia!) and nobody had a good selection of cars on the lot).
Ref: “I’m don’t want to advertise my midlife crisis to the world by buying a sports car”
OK, so buy an Audi S4-Avant (*S*-4 not the A4; it looks like a slightly-zoomie station wagon) and mostly-everybody will think you a frump. But you will then own one of the zoomiest “sports cars” on the planet. One of the few “do it all” vehicles sold today (340hp, V-8, 4wd, plenty of room for the dog and a months groceries too).
http://www.caranddriver.com/article.asp?section_id=15&article_id=8682&page_number=4
Sorry. How crass of me to make a recommendation but not provide a link (to the Car & Driver article this month “Executive Adrenalators”, which Audi won). The test is the *car* S4 not the wagon S4 but you’ll get the picture.
And BTW the C&D test of the ’05 Odyssey called it (paraphrase) the best mini-van in history.
Uh, Paul, I’m not sure that I need the zoomiest sports car on the planet. The average speed on a road in the Boston is about 25 mph. Whenever I get out of an airplane or a helicopter, whose trajectories hardly ever have to be adjusted because of traffic, into an automobile I’m amazed at how crowded the roads are. I’m not sure why a high-performance car in a big U.S. city isn’t seen by most people as a ridiculous affectation.
Sarah – it was very thoughtful of you to provide us all with a link to your favorite personals site. Why not include a link to your profile as well, to make it easier for those interested to find you there?
You might have better luck with Boch Honda in Norwood MA, the largest shop in the area – when I checked with them, they could get it within 3-4 weeks and would sell at the list price, but it depends on your color /trim preferences (and perhaps your zip code too 🙂
Sweet Phil, you have started a cat fight! Go for the first chick– she seems nicer. Keep it up girls- we need a little entertainment.
Skeptic– the website thing is easy to change– I put mine on Jdate and now check out this one!
Skeptik– not skeptic. Sorry.
Presumably the car companies take into account the state of the economy when they decide how many vehicles to build. Thus, the state of the economy probably matters less than whether the car companies’ predictions of the state of economy over- or under-estimated its strength.
true.