Dealership Service D’pts over’ld fixing salable clunkers

Local Chrysler dealerships all booked up 2-3 weeks.

One “service advisor” on the phone said to me:
“It’s crazy here.
The used vehicle department keeps buying clunkers
and overloading our techs fixing them
so they can be sold off the used lot within hours after they will run.”

Make Hay while the Sun Shines

Overnight radio is saying
dealerships are mailing past customers coupons for low priced engine oil or ATF changes,
then using this as a method of inspecting the used vehicle “on the sly”
then offering the customer $3000 or more than what the vehicle fair market price was 4-5 months ago.

Prices seem crazy too despite the fact that there appear to be plenty of used vehicles for sale. If you search pickups here on CL, for example, it's like pages and pages of used quad cab trucks. It would be hard to narrow down the one you wanted out of the piles of them to choose from. I guess I don't get it.

I have had neighbors say dealers have been mailing out letters to random people saying they want to buy their used truck for cash.

Look closely at those ads. There is a reason they are still for sale. Quality, desirable, low mileage pick-ups are very few and far between. I watch the sales every day. There are a lot of trucks for sale, but they are overpriced or high mileage or base models or 2 wheel drives or................

The trucks that most buyers are looking for are just not there. At least not enough of them. If that weren't true then the desirable trucks wouldn't be 20% higher today than they were a year or so ago.

Since my truck just died 600 miles away I took a look at the Craigslist ads out there and was shocked to see so many overpriced quad cabs! It is definitely a sellers market right now just like housing. I could not rent a vehicle out there, only one car in a 30 mile radius, seems that last year the rental companies dumped all their cars as people were staying home, just where the heck did they go?!?

I have a 2002 4WD pickup with only 75K on it and I bet I could pull $15K around here. Crazy times.

Wall Street Journal has an article Thursday
that the M2 money supply number has been growing at 23.9% annualized rate since March 2020.
That is the fastest rate since World War II.

M2 is banker slang for spendable cash.

Not sure about other Moparts members
but my supply of ready spendable cash has not jumped 23% since March 2020.

The used car prices seem to confirm at least some citizens have way more spendable cash.

“The best way to double your money is to fold it in half and put in back in your pocket”

the bigger problem is easy to qualify for credit on most cars sales over available spendable cash. most idiot car shoppers their only concern is the size of the payment. they just sign and drive away and don't even bother to learn the interest rate they are paying.
if they actually had to pay cash for the sale they could only afford a beat up POS. they would be lucky to scrape that up to pay for it.

And the hits just keep coming. GM is halting more production because of the chip shortage.

www.detroitnews.com/story/business/...ction-hit-chip-crunch-grinds/8044191002/

Fiorani has expected to see some type of recovery from chip shortages by the fourth quarter, "but signs like this make you rethink that and think it's gonna take longer," he said after GM's truck production announcement.

An ex employee just paid 30K for a 2008 quad cab Silverado with 80K miles on it. I'm sure he got a real good lube job on the financing as he had little credit history and 2 dui's. I'm guessing 7-900 a month with insurance

Ah yes, Just In Time inventory procurement.

All I can tell you is my son just ordered a new ram diesel megacab, put money down, has cash, and they produced a vin the next day. They also gave him $4000 more than he paid for his hemi ram, and he put 47000 miles on it, and it was used when he got it. If you put money down your car will be built, orders for dealer stock are not being filled. Same thing happened when my daughter ordered her hellcat charger, money down and cash sale, it magically got built. We were offered exactly what we paid for our 2019 scat-pack, if they still made plum crazy it would be down the road and a hellcat ordered. Amazing how the car market is right now. It does piss me off how salesman always ask what our payment needs to be....no budget right car right color, cash. When you are young and dumb I get it, but damn by 60 a person should be able to pay cash for a car, you only need to drive junk for 4 years and save to do it.

Some dealers really dislike cash payers, and they also frown if you want to finance thru your own bank or credit union. Too much money to loose on interest I guess.

My Wife's 18 Durango R/T trade in value is now showing what we paid for it two years ago, and we bought the maxcare warranty with it even. We are ahead of the loan by a good margin even without the inflated value, BUT not quite enough to slide into an SRT model, already checked haha.

I saw something recently that listed some late model used vehicles that are actually higher valued now than their MSRP when new!

My son has a 2019 Ram 1500 on lease that ends in Nov. Right now, he can sell the truck for $8k more than his buyout price.

I recently traded a 2020 leased Ram in on a 2021 leased Ram simply because the dealer begged me to have my old truck. I ended up with a newer truck with 0 miles, more options, and a lower payment. The Finance guy said he had never seen it happen before.

A lot of the profit is in the financing. No financing, minimal profit.

A friend of mine bought a new C7 corvette early last year before covid. drove it around but keep the mileage low. He just sold it back to the same dealer for 15K more than he paid for it. I was blown away. unreal.

My 2010 Challenger V6 with 46k just got totaled. Got a great price from the insurance company for it.
But now I'm out looking for a newer R/T. Found a 2018 R/T Shaker Plus with 33k on it, ask is 34,500.00...
Don't know whether to try and negotiate a deal on it, or just drive my 2011 4wd Dakota for 6 mos and see if the used car prices come back to earth.

There were 6 new vehicles in the 1 million square foot lot at the Belvidere Chrysler Assembly plant yesterday, and none of them are built there!

The used vehicle prices seem very high compared to past years,
but if the NOx pollution regulations are going to be tightened to such an extreme that gas/diesel engines will be BOTH expensive and get worse fuel economy,
perhaps the market is sending a “sober signal” and not a “foolish frenzy.”

Looking backwards, about the year 1997 government actions killed the reasons to own a diesel vehicle, but it took awhile for this to be apparent to vehicle users.

Why are USA used vehicle prices rising so fast?
Here is a foreign article that makes a strong argument that it is not just a shortage of chips for new vehicles,
but that prices in general are rising sharply (inflation) due to “the big picture” of world trade, especially USA and mainland China:

https://asiatimes.com/2021/07/will-china-bail-out-biden/

Warning: it is a long read.

sample quote

But Jin adds: “Now the United States has issued a massive amount of excess currency due to the epidemic, and the amount of currency issuance far exceeds the normal needs of economic development, so there is a situation in which more currency is issued but production cannot be restored. Inflation in the United States is rising, which will put a lot of pressure on the US finances. The US federal debt is approaching $30 trillion.

“What does this imply? At present, the interest on US Treasury bonds is more than 1% point, and the annual interest payment is about $300 billion US dollars, which is considered to be affordable. But if inflation approaches 5% or even exceeds 5% (interest rates will definitely follow after inflation exceeds 5), then the United States will need $1.5 trillion a year to repay the interest of 30 trillion federal treasury bonds, which will definitely lead to the bankruptcy of the government.”

Jin continued: “So the United States is actually looking to China now. You may have noticed that in the past, the United States has always said that China manipulated the RMB ( “Yuan” ) exchange rate and artificially lowered the RMB exchange rate. However, recently, the tone of the United States has completely changed… Why don’t you ask for appreciation? Because our things become more expensive as soon as the renminbi appreciates, and the United States must import our goods, and that adds to inflationary pressure.”

Treasury Secretary Janet Yellen said some weeks ago that tariffs on Chinese goods had hurt American consumers, Jin noted, adding that “it is very likely that Yellen will cancel the tariffs imposed on China within this year.”

end quote

This is nuts but for grins I was looking at used mustangs. Basically, I could sell my 06GT for $5500 more than I paid for it 6 years ago.

Wall Street Journal has an article on page A3 of Tues Aug 3 edition saying the Feds will issue new regs for vehicles of model year 2026.
Required MPG will go up:
average fleet mpg at 55 mph level driving must be above 54.5 MPG
and combined highway/city must be above 36 MPG

Tailpipe emissions will be “tightened” too
but the article does not mention what new NOx per mile level

The former 2016-2020 administration had “loosened” the MPG requirement to 40 MPG at steady 55 MPG and 29 MPG combined.

My estimation is that gasoline powered Toyota Prius type vehicles could meet these new regs.

Electric pickups and large electric SUVs might meet the new regs,
but only because of the “crazy” official math
where they convert range on a battery to an “equivalent” petroleum MPG.