[GGG333]

Originally Posted by HorsePower

I agree that I think actual MSRP price hikes are coming, and interest rates definitely seem to be going up. But I can't agree with your first paragraph. I think as soon as supply-chain issues resolve and cars are more readily available new (either on the lot, or to be ordered and delivered within reasonable time frames), the used pricing will plummet back to typical levels (albeit in relation to higher new pricing, so that will help a bit), while the new pricing stays increased.

Things never seem to come back down (in terms of MSRP). Watch collectors who were active at the time, tell me that when gold spiked in 1980, gold watch prices soared (MSRP, and used). Gold, of course, came way back down, for decades, but the MSRPricing never moved back down accordingly. I think we'll see the same thing with new cars...

Keywords are "as soon as supply chain issues resolve"

That's the gamble , depends on when you think it will resolve.
IMO , not anytime soon.

[SpeedyATL]

The dealers and manufacturers are addicted to msrp, low incentives and low residuals like crack addicts.

They only thing i see moving the market in a significant way is when people finally start to realize our economy is a house of cards, with "growth " only resulting from significant and nearly out of control under reported inflation due to crazy monetary and fiscal policy.

But. I could be wrong....

[Vishal50028]

Originally Posted by SpeedyATL

The dealers and manufacturers are addicted to msrp, low incentives and low residuals like crack addicts.

They only thing i see moving the market in a significant way is when people finally start to realize our economy is a house of cards, with "growth " only resulting from significant and nearly out of control under reported inflation due to crazy monetary and fiscal policy.

But. I could be wrong....

Or people's ideology leading them to believe the economy is in bad shape. But hey, to each their own. The inflation will pass

Chip shortages and global supply issues due to covid caused the car mess along with numerous other consumer goods. I see it daily as I sell building materials sourced from all over the world

[HorsePower]

Originally Posted by DK__LA

Keywords are "as soon as supply chain issues resolve"

That's the gamble , depends on when you think it will resolve.
IMO , not anytime soon.

I don’t think the return will be immediate, but if we’re still anywhere near the current disruptions, in 30+ months, then I think we will all have much bigger problems than can be addressed on a car enthusiast forum.

[SpeedyATL]

Originally Posted by Vishal50028

Or people's ideology leading them to believe the economy is in bad shape. But hey, to each their own. The inflation will pass

Chip shortages and global supply issues due to covid caused the car mess

My points are not ideological.

Yes, inflation will eventually pass, it always does. But the question is when and what will the damage have been?

I agree the chip shortage and covid had a major impact on the current market, but I don't see pricing coming back to 'normal' until people realize that things are not as rosey as they seem. Once they do, most will stop paying MSRP (or over in many cases it seems) for a new car as demand will decline and balance out more with supply.

BMW and MB have already said they are going to keep a close eye on supply (ie: cut supply if they start to catch up with demand) so I think its going to take a market shock like a housing or stock market correction. People are using their homes and investment accounts as ATMs like they did in 2008. One big shock to either and things will change quickly

Everyone with a brain has an opinion. Only time will tell I guess. Here's hoping YOU are correct!

[GGG333]

Originally Posted by SpeedyATL

My points are not ideological.

Yes, inflation will eventually pass, it always does. But the question is when and what will the damage have been?

I agree the chip shortage and covid had a major impact on the current market, but I don't see pricing coming back to 'normal' until people realize that things are not as rosey as they seem. Once they do, most will stop paying MSRP (or over in many cases it seems) for a new car as demand will decline and balance out more with supply.

BMW and MB have already said they are going to keep a close eye on supply (ie: cut supply if they start to catch up with demand) so I think its going to take a market shock like a housing or stock market correction. People are using their homes and investment accounts as ATMs like they did in 2008. One big shock to either and things will change quickly

Everyone with a brain has an opinion. Only time will tell I guess. Here's hoping YOU are correct!

Yup, these brands are in huge profit right now and they have no reason to change anything.
You're exactly right , they will purposely cut supply because why change something that works so well for them right now.

[Gfit]

I think it's not only inflation and shortages, it's also the massive increase in wealth. The stock market, incomes and real estate values have created a ton of additional wealth and few thousand extra is nothing to a lot of people these days.

[jwt2440]

I ordered a Mercedes SUV for the wife in early 2021 and took delivery 8 months later in September. I'm in SoCal and so is dealership. Dealer gave me $4k off sticker ($100k car) when I ordered and when the car arrived offered me $15k not to pick it up. I wired the cash to buy the car outright within 30 minutes of that phone call so they wouldn't back out of the deal. Everyone called me stupid for not taking the money. Those calling me stupid were friends who aren't married and don't have to deal with a wife. Long story short is the market is weird AF.

[WATCHMY6]

Originally Posted by avisaxena33

Am I crazy for hesitating on doing an out of state deal with a negotiated 2500 markup for a m3 allocation? Currently I'm on a local dealer waitlist at #6. Wanted to get some opinions. My biggest issue with it is that they won't cover shipping and its like a 12 hour drive which I'm not going to do (maybe). There is also a 399 etching fee ... sigh

I had to pay 5000… if you want it, what is an extra 2500

[Vishal50028]

Originally Posted by SpeedyATL

My points are not ideological.

Yes, inflation will eventually pass, it always does. But the question is when and what will the damage have been?

I agree the chip shortage and covid had a major impact on the current market, but I don't see pricing coming back to 'normal' until people realize that things are not as rosey as they seem. Once they do, most will stop paying MSRP (or over in many cases it seems) for a new car as demand will decline and balance out more with supply.

BMW and MB have already said they are going to keep a close eye on supply (ie: cut supply if they start to catch up with demand) so I think its going to take a market shock like a housing or stock market correction. People are using their homes and investment accounts as ATMs like they did in 2008. One big shock to either and things will change quickly

Everyone with a brain has an opinion. Only time will tell I guess. Here's hoping YOU are correct!

Fair enough. Just got to take this day-by-day.

[Geo_FF]

Originally Posted by HorsePower

When the mark-ups get this crazy (I’m seeing 15-25k thrown around above), how do banks even underwrite those loans?? I wouldn’t think a bank would be willing to base LTV off of a grossly inflated purchase price. (Puts BMWFS and the dealers in an odd spot though - the dealers claiming that’s the current market price, but then if the manufacturer’s own bank won’t write the loan on the marked-up price, wouldn’t be a great look…)

Each bank has its own policy of course, but mine for example goes up to 120% LTV on auto loans.

[HorsePower]

Originally Posted by Geo_M240i

Each bank has its own policy of course, but mine for example goes up to 120% LTV on auto loans.

Wow. I guess that would help enable high mark-ups, if they’re financeable.

[SpeedyATL]

Originally Posted by Geo_M240i

Each bank has its own policy of course, but mine for example goes up to 120% LTV on auto loans.

This reminds me of the 2008 housing crash....Can anyone say "cash-out refi"?

[yahh]

Originally Posted by DK__LA

Yup, these brands are in huge profit right now and they have no reason to change anything.
You're exactly right , they will purposely cut supply because why change something that works so well for them right now.

One of my good friends is a GM at a Mercedes dealer here and they are contemplating moving towards the Tesla style ordering system and only keeping a few cars on hand for test drives. They're making 4-5x the amount on new cars vs what they used to and they're not discounting new cars below MSRP to get them moved when they sit too long. This way they're not investing money upfront and locking it up in the new cars so then they can purchase more used cars which have higher margins. On top of that, the service department profits way more from used cars.

Originally Posted by HorsePower

Wow. I guess that would help enable high mark-ups, if they’re financeable.

They don't use MSRP though, they use market value so markups shouldn't be relevant. Depending on who it is, they use KBB, Edmonds, or MMR which is the most accurate because it uses the last 5-10 actual sales to show market value.

[HorsePower]

Originally Posted by yahh

They don't use MSRP though, they use market value so markups shouldn't be relevant. Depending on who it is, they use KBB, Edmonds, or MMR which is the most accurate because it uses the last 5-10 actual sales to show market value.

Isn't that a distinction without a difference here, in this market and when we're talking about new car acquisition financing?

"Market value" right now for a new G8x is no lower than MSRP (perhaps higher), so if a lender is willing to lend 120% (or similar) against a new car's "market value" as determined by recent sales etc., that's going to inherently be a marked-up value as compared to MSRP. Unless I'm missing something...

[Vishal50028]

Originally Posted by yahh

One of my good friends is a GM at a Mercedes dealer here and they are contemplating moving towards the Tesla style ordering system and only keeping a few cars on hand for test drives. They're making 4-5x the amount on new cars vs what they used to and they're not discounting new cars below MSRP to get them moved when they sit too long. This way they're not investing money upfront and locking it up in the new cars so then they can purchase more used cars which have higher margins. On top of that, the service department profits way more from used cars.



They don't use MSRP though, they use market value so markups shouldn't be relevant. Depending on who it is, they use KBB, Edmonds, or MMR which is the most accurate because it uses the last 5-10 actual sales to show market value.

When my local dealer had many 3s,5s, and 7s on the lot back in the day, the specs were always iffy it seemed. Maybe they are better off once lead times normalize

[yami sukehiro]

Originally Posted by amuk

I believe December allocations were already spoken for when I put my order in at the end of November. My guess is the four customers ahead of me got the January allocations when they were released in December.

The hope is they get more m3 allocations for February this month. I don't think those have been released yet.

Any news on allocations at bill jacobs for you?

[CodyAXM]

Considered the same thing myself . Happened to get lucky and local dealer called me and told me someone dropped out on an order and I was still able to edit build. Pains me to be patient - but sometimes it just makes a lot more sense.
When this market adjusts - I see it happening already on RWD M3’s since so many are becoming available - People who paid $2-5-10k over, will all be very upset when the same dealer won’t even offer sticker back. Unfortunately, many people will be stuck holding a bag and it won’t be a big green bag, it’ll be red. Bright red.

[wfydaniel]

i mean, 2500 markup seems like a discount in times like this

[wfydaniel]

Originally Posted by CodyAXM

Considered the same thing myself . Happened to get lucky and local dealer called me and told me someone dropped out on an order and I was still able to edit build. Pains me to be patient - but sometimes it just makes a lot more sense.
When this market adjusts - I see it happening already on RWD M3’s since so many are becoming available - People who paid $2-5-10k over, will all be very upset when the same dealer won’t even offer sticker back. Unfortunately, many people will be stuck holding a bag and it won’t be a big green bag, it’ll be red. Bright red.

same here, i hijacked a delayed allocation and i was able to edit the spec. otherwise i will be lined up for a Feb. allocation and my estimated delivery time would be October, if im lucky enough.
now my car will be ready to ship to Shanghai around March

[amuk]

Originally Posted by yami sukehiro

Any news on allocations at bill jacobs for you?

No news yet, but judging by the thread below, new allocations haven't been released to dealers yet.

Allocation update - January https://www.bimmerpost.com/forums/sh....php?t=1891971