Demand for cars is UP, not DOWN

It looks as though I actually can be wrong about everything.

From March 25, When do car makers cut prices?

Shouldn’t the car manufacturers be having coronavirus special deals? A car plainly isn’t worth as much as it was two months ago. Why are the prices mostly the same? Are people actually buying cars at a similar rate to what it was a year ago? Is the shutdown of car factories roughly balancing the collapse of demand? Even with the U.S. and Europe paralyzed, Japan and China are open for business, right? They can produce a ton of cars, can’t they?

We still don’t have that new car, but it looks as though I was dead wrong as usual: “Looking to Buy a Used Car in the Pandemic? So Is Everyone Else” (nytimes, yesterday). Excerpts:

Eager to avoid public transit and Uber, and to save money, buyers are emptying dealerships.

“Used cars are supposed to depreciate, but I’d look up the book value of a car on the lot and see it was higher than at the beginning of the month,” said Adam Silverleib, president of Silko Honda in Raynham, Mass. “I’ve never seen that before.”

Early in the pandemic, when many people avoided leaving home for all but the most pressing needs, carmakers offered no-interest loans for as long as 84 months to lure buyers. With new-car inventories low, such generous incentives have mostly disappeared.

I was only 90 percent wrong about new car demand:

Those fears might be overdone. Buying a used car does not increase the number of cars on the road, of course. And sales of new cars are not taking off. If anything, part of the sudden mania for used cars stems from the yearslong rise in the price of new cars and trucks. On average, new vehicles now sell for about $38,000, more than many consumers can afford or are willing to pay.

Speaking of wrong about everything, Senior Management likes the idea of a station wagon. These are rare birds on our Planet of the SUVs and I am seriously averse to the Karenmobile (Volvo). That leaves “How Subarus Came to Be Seen as Cars for Lesbians” (Atlantic: “it’s the result of a calculated, highly progressive ad campaign launched 20 years ago.”) and… what else? We saw an interesting looking car the other day, a Buick Regal TourX:

1.4 billion Chinese consumers can’t be wrong about Buick, can they?

Related:

30 thoughts on “Demand for cars is UP, not DOWN

  1. The Buick Regal is actually a German design, a rebranded Opel Insignia. It’s probably the last generation though, as GM sold Opel.

  2. (Re: Subarus. I’m not sure where they are considered to be the gay car, in Seattle everybody drives them, since weather, considered just regular car).

    When I was buying F-150 on June 30 I basically paid whatever dealership wanted since everybody was buying them for camping. After Ford being closed for couple months all premium trims where sold out from the lots.

    Same thing happened with the travel trailer. I told dealer that I’m looking for used trailer and he just laughed and said “Good luck with that”. Lucky enough they still had configuration I wanted on the lot, so I just bought new. On the peak they had only 15 RVs in inventory when normally they have 300.

    Old Highlander F-150 replaced actually went up in price since the last year! (I’m slacking off – need to replace lost title and finally sell it) When I checked a year ago, I expected to get $3000 for it, now it went up to $5000.

    Anyway, please just buy Model Y with full autopilot. It’s just best car to be in the traffic jam or to drive on the highway. Trust me, automation makes the huge difference (you’ll have to show Senior Management how to use it). Our both daily drivers are Teslas, my Senior Management refuses to drive other cars now. I also have F-150 for camping/household stuff and BMW for track. Adaptive cruise control in the new F-150 works great, lane keeping doesn’t work at all. In the meantime both Teslas now automatically stop on stop sign and traffic lights after over-the-air update. If you don’t like Model Y after few months it’s easy to sell it.

  3. Oldish news from the NYTs. I’ve actually heard a few stories like 2019 Tacomas selling for *more* than the MSRP on identical 2020 Tacomas. This screams inflation coming-right-up, as the new car prices are merely stickier than used prices. I guess we’ll see.

  4. Airplane mechanics are getting so hard to find, pilots are throwing in the towel & buying cars rather than buying Cirruses. Must be a lot more Greenspun readers now that their bosses aren’t looking at their screens.

  5. The Outback is a great wagon, I am a fan of the new Onyx XT trim as the turbo is peppy and it has a very infrequently found feature- a full size spare. I think this will be an asset for me as I want to travel some gravel roads in the Arctic. The Buick is an interesting little known car, but carefully look at trim levels as very recently most had halogens and your aging eyes might not like dim headlights.

    • @Philg: It does look a little “lifted” but that is a feature, not a bug. It has 8.7 inches of ground clearance. That makes a big, big difference when you have to drive in the aforementioned 6+ inches of unplowed snow. To me, the aesthetic tradeoff is worth it because you really can use that extra ground clearance on a bad day. You have to see them in person to judge for yourself.

  6. The price of used boats has jumped by about 25% over the past couple of months. I listed my 2013 bass boat for double what I paid for it in 2017, and sold it in one day to a guy that drove five hours, looked at it for less than 10 minutes, paid my price in full in cash, hooked it up to his 2020 Ford F150, and drove off.

    I’m now looking for a bigger used boat but they’re way over priced.

    Oh, and I’m still driving my ’00 Ford Taurus everyday for my 3-mile round-trip commute to work. I tow the boat with my ’08 Ford F150. Both have been creampuffs.

  7. A Mercedes E63s wagon is a cool car (esp in black) with everything a household minister of war & finance could want: 4wheel drive, top-notch safety-tech, lots of cargo space, and Mercedes-style luxury. It also has 603hp and does 0-60 in 3.4s, which makes it appealing to the chauffeur/check-writer.

  8. I like Subarus, we’ve got an Outback with more than 160,000 miles on it. But test drive it first: I’ve read that the infotainment system is cluttered, and you’ll want to spend some miles on roads to gauge whether you like the ride quality/suspension and noise levels of the chassis. Not that it’s egregious compared to other cars, but I know that you place a premium on interior noise abatement. Other than that, I’ve always liked the boxer engine with the lower CG and the AWD system has always worked very well, lesbians or not. Buy from a good dealer. I can suggest one if you decide to go through with the purchase.

    Wagons are excellent alternatives to SUVs and the Outback has a lot of room.

    • Addendum: With a good set of winter tires, there are very few cars as good as an Outback in the snow. Six or inches of unplowed snow is “drivable conditions” in an Outback, no kidding. You’re not a horsepower fiend so the base engine will probably be fine, and they get good mileage with that engine and the CVT. Check the rear seat room and make sure it’s adequate for your needs.

      They’re a little bit old-tech, but as a result Subaru has had a long time to pick the nits out of the drivetrain.

    • Sorry, finally the Outbacks are built in Indiana, IIRC. So they’re about as American-made as a Korean car can be.

  9. Looks as though the U.S. version of the Regal is discontinued! https://gmauthority.com/blog/2020/08/the-buick-regal-has-been-discontinued/

    Hmmm… it was actually made in Germany, according to https://www.roadandtrack.com/new-cars/road-tests/a27072687/2019-buick-regal-tourx-road-test-review/

    “Even the Subaru Outback, the TourX’s closest natural competitor, sits with its wheel arches in the clouds compared to the Buick. Lower centers of gravity make for a better drive, full stop.”

    • (Probably quite expensive to lease, though, since how high a residual value would any sane company put on a car that has been discontinued?)

    • @Philg: The other good thing from a long-term perspective if you intend to hand the car down to a child, perhaps: there are a lot of Subaru Outbacks on the road. Lots of mechanics know how to work on them, the parts are available, etc., etc. So if you wind up keeping it for 10 years or more, odds are that it will still be fixable.

  10. If budget allows, the best approach when pushed in the direction of hatchback/wagon is to take this opportunity to procure a Mercedes E63 AMG wagon or one of its brethren.

  11. The contemporary Outback is an SUV. It’s dimensionally larger than old truck framed Ford Explorers, and almost as large as the current Ford Explorer. It’s huge compared to the “lesbian” Outback wagon of the 90s. The best wagon that’s actually a wagon is obviously the 4-matic E450.

    • David: I’m sure that the E450 is nice, but it is a $66,100 car (base price)! I’m opposed to consumption that will make random people bitterly envious (aircraft live quietly in their hangars and people can’t see them in the supermarket parking lot). Mercedes doesn’t even show this on their lease page, but based on the E450 sedans it might be about $800/month to lease for three years (given the pace of advancements in computer systems on these cars, we don’t want to drive anything other than three years). We could buy a used Buick TourX (they don’t seem to be available anymore from dealers) for the cost of three years of the E450 wagon and then give it away at the end for about the same price!

    • The term “SUV” is becoming a muddle that covers everything from compact cars to station wagons and larger vehicles. It means whatever the Marketing Department wants it to mean. For example, Mercedes calls the “Compact GLA” an SUV, but it’s basically a pumped-up Volkswagen Golf.

      https://www.mbusa.com/en/vehicles/class/gla/suv

      It’s true that the newer Subarus are larger than the ’90s and even 2000’s models, but Phil wouldn’t like those cars. The interior room, leg room, shoulder room and rear seat spacing up until about 2010 was pretty confining. The newer Oubacks are a bit bigger, but if you see one up close, it’s a station wagon, and actually kind of small when compared to a *REAL* Station Wagon, like the 1981 Chevrolet Caprice Classic. Yuge.

      https://classiccars.com/listings/view/899003/1981-chevrolet-caprice-classic-station-wagon-for-sale-in-auburn-indiana-46706

  12. The Mercedes E450 Wagon is larger than the Outback in every measure except for height, which is a function of the 8.7 inches of ground clearance on the Outback. I don’t want to take anything away from the E450, it’s a beautiful station wagon, but the Outback is smaller and it weighs less. The difference, of course, is that the Mercedes is a better car, it costs a lot more. I don’t know how they hold their value. It’s also quite low to the ground and if you actually have to drive it in the snow, I hope you don’t mind fixing the body work.

    https://www.caranddriver.com/subaru/outback

    https://www.mbusa.com/en/vehicles/model/e-class/wagon/e450s4

  13. If you really don’t like the Outback and aren’t interested in the Karenmobile or the Merciless Benz, the Audi A4 and A6 Allroad wagons are worth a look.

    Audi doesn’t have quite the same reflexive “that’s a rich dude” reaction from the proles, and they’re also very powerful cars, extremely well built, aesthetically more polished, etc., etc., than the Outback.

    “Design matters in natural selection.”

    https://www.audiusa.com/us/web/en/models/a6/a6-allroad/2021/overview.html

    • I preferred Audi’s old slogan “Vorsprung Durch Technik” but we all know we’re heavily into social darwinism and its antitheses now. The Germans game all this out a long time in advance.

  14. If you buy the Subaru you will have a reliable tractor of a car that is a monster in the snow and completely invisible in any suburban/rural setting in the Northeast. We have two 10 year old Outbacks and they are 100% dead reliable and boring, in the best ways. Some years back when I worked at a boarding school near the northwest CT line I noticed that people with old money just drove Subarus

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