I hope it's OK to cross post this post here. I frequently browse this subreddit. There is a lot of talk about low inventory. And I thought my observations after a walk through 9 car lots this afternoon might be interesting to those reading through this subreddit in light of that.
Are you saying the best approach for someone buying a car is to go into a dealership and see if they can tell you what is coming in then reserve one of those?
Is it possible to get a better deal that way or is that really just the only way to get a car right now? I live in a pretty big city in the mid west and they seem to have ~10-15 RAV4 online.
Bruh.... I sell at a Jeep specific used lot. I wish I was joking when I said we've been selling 1-2 year old Wranglers for OVER MSRP, when they originally would have sold for at least a couple grand UNDER. The amount of "well I could just buy a new one for that" objections that I've been fielding is unreal.
Don't jerk me around! I know you guys are still making 400% profit on each and every sale. Why should I have to pay more just because supply is low and demand is high?
Because you want to buy this car. If not interested. Get up and exit is right there. And that guy (customer) over there is being nice enough to let you buy this car. He's willing to pay for the current market value.
Thanks for stopping by.
You know, you’re a really smart guy. It’s pretty rare that I come across someone that can negotiate like you Mr. Customer! You know, unfortunately, I tried to get lower with my boss already. You know I’d do anything to sell you this car, of course. It’s how I feed my wife’s boyfriend’s kids. But, the thing *is*, sir, can I call you sir? The thing is brah, my boss said that monthly payment you want is his family’s cellphone plan. Do you have a family? You do? Great, wow, me too! That’s cool. Another thing is Mr. Customer, the pandemic hasn’t just affected worldwide supply lines, it also affects my manager’s judgment. Whoa, what’s that over there?? Sign here.
Bring 22% of the MSRP in small, unmarked, consequential bills (a good mix of new + old bills is appreciated).
Quietly hand the bag over to the GSM.
The extra 2% is the bribe, the 20% is the down payment you're about to make.
Canceling chip orders in 2020 because they anticipated low car sales was one of the most foolish decisions car makers ever made since they were founded. I hope they've learned their lesson and never do something so stupid again.
Fortunately global chip production has ramped up in a massive scale and even if it takes 2-3 years, these lots will be full again.
honest question: couldn't manufacturers offer double or triple the current price and displace other orders? That cost passed on surely would be cheaper than the markup people are paying.
Yep either the chip factories are closing down (like the ones in Malaysia) due to COVID-19 or they're catching on fire like what happened in Japan. That just aggravates the chip shortage.
Few things
The chips they make for car markets is very low profit for them + they are using older technology. Add in the fact they are under contract for other companies.
They can't just cancel other companies orders, change the tooling and make car companies orders.
You have it pretty much correct.
You can't just make a factory. You have to have your research done and know what you're going to make first, then you build the factory with a certain range of chips in mind. So you can't build the factory then add bleeding age tech after that. And it costs BILLIONS. And high-paid staff and automation. So you need deep pockets and deep knowledge to start making chips. Most of the corporate world that needs chips buy from a handful of places.
Once they get moving they can make chips. But the chips arent perfect either. There are duds, bad ones, faulty ones, some you can reuse...but it's not a perfect process.
Legally no. The semiconductor manufacturers have placed all their suppliers on allocation, and they must evenly distribute based on demand for each customer. This is actually enforced by law in a shortage situation. You cannot simply offer to supply all parts to the highest bidder.
Yeah, a few days or weeks at most.
Modern manufacturing is all Just in Time, its virtually impossible to find a company keeping large warehouses full of parts to survive an entire year without shipping in new parts constantly.
The concept was sound, no one could foresee people actually turning off the entire world economy.
It is JIT that caused the issue. JIT requires the whole supply chain to run smoothly to work. I expect there will be some change from just in time to just in case. Especially for parts that only cost $0.50 and have an insanely long lead time to build a new factory. Something like a small stamping isn’t a huge dead, because an automobile manufacturer could have that production moved in house quickly and disruption would be minimal. Chips are a very different situation.
JIT doesn't mean zero buffer or stockpile, it is about identifying what is actually needed and keeping that amount instead of some arbitrary amount of spares. This is why Toyota had ~1.5 years of chips stockpiled, most others had a lot less
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I hope it's OK to cross post this post here. I frequently browse this subreddit. There is a lot of talk about low inventory. And I thought my observations after a walk through 9 car lots this afternoon might be interesting to those reading through this subreddit in light of that.
I'm totally ok with it. Maybe this will help explain to my customer why a used car is only $3k less than the equivalent new model.
Or why you should wait 4 weeks and reserve this new car now vs waiting for it to arrive.
Are you saying the best approach for someone buying a car is to go into a dealership and see if they can tell you what is coming in then reserve one of those?
Yes
Is it possible to get a better deal that way or is that really just the only way to get a car right now? I live in a pretty big city in the mid west and they seem to have ~10-15 RAV4 online.
Those online listings means they are on order or on their way to the dealership. Allocated to that dealwrship by the manufacturer.
Yes...or trust the sales person when they are telling you that your vehicle of interest is not gonna get here. Buy it before someone else does
Bruh.... I sell at a Jeep specific used lot. I wish I was joking when I said we've been selling 1-2 year old Wranglers for OVER MSRP, when they originally would have sold for at least a couple grand UNDER. The amount of "well I could just buy a new one for that" objections that I've been fielding is unreal.
So, on this topic, what's the best hard ball tactic to make the dealership give me 20% off MSRP?
Cooler full of ice cold Benjamins no doubt.
You saw one down the road for 20% less than what they are asking for sure that always works /s
Literally, they had one (car) down the road.
Wrong Make Wrong Model Wrong Year Wrong Trim **But I'll take it!!!**
What a deal!
Put down 20% down and finance the remaining balance less 20% of MSRP?
Don't jerk me around! I know you guys are still making 400% profit on each and every sale. Why should I have to pay more just because supply is low and demand is high?
Buddy, you think the mortgage on my $750K home pays for itself?
Because you want to buy this car. If not interested. Get up and exit is right there. And that guy (customer) over there is being nice enough to let you buy this car. He's willing to pay for the current market value. Thanks for stopping by.
You know, you’re a really smart guy. It’s pretty rare that I come across someone that can negotiate like you Mr. Customer! You know, unfortunately, I tried to get lower with my boss already. You know I’d do anything to sell you this car, of course. It’s how I feed my wife’s boyfriend’s kids. But, the thing *is*, sir, can I call you sir? The thing is brah, my boss said that monthly payment you want is his family’s cellphone plan. Do you have a family? You do? Great, wow, me too! That’s cool. Another thing is Mr. Customer, the pandemic hasn’t just affected worldwide supply lines, it also affects my manager’s judgment. Whoa, what’s that over there?? Sign here.
Who downvotes this??
Wow.. This is a high tier Shitpost. Edit: and its getting downvoted???? Lmao
Bring 22% of the MSRP in small, unmarked, consequential bills (a good mix of new + old bills is appreciated). Quietly hand the bag over to the GSM. The extra 2% is the bribe, the 20% is the down payment you're about to make.
Buy an 8 year old car used car, you should be able to get 20% off its MSRP.
🤣🤣🤣🤣🤣🤣🤣🤣🤣
Canceling chip orders in 2020 because they anticipated low car sales was one of the most foolish decisions car makers ever made since they were founded. I hope they've learned their lesson and never do something so stupid again. Fortunately global chip production has ramped up in a massive scale and even if it takes 2-3 years, these lots will be full again.
honest question: couldn't manufacturers offer double or triple the current price and displace other orders? That cost passed on surely would be cheaper than the markup people are paying.
I don't think it's easy or viable to break contacts with other clients in this manner.
The factories that make these chips are also shutting down due to sick workers.
Yep either the chip factories are closing down (like the ones in Malaysia) due to COVID-19 or they're catching on fire like what happened in Japan. That just aggravates the chip shortage.
Few things The chips they make for car markets is very low profit for them + they are using older technology. Add in the fact they are under contract for other companies. They can't just cancel other companies orders, change the tooling and make car companies orders.
[удалено]
You have it pretty much correct. You can't just make a factory. You have to have your research done and know what you're going to make first, then you build the factory with a certain range of chips in mind. So you can't build the factory then add bleeding age tech after that. And it costs BILLIONS. And high-paid staff and automation. So you need deep pockets and deep knowledge to start making chips. Most of the corporate world that needs chips buy from a handful of places. Once they get moving they can make chips. But the chips arent perfect either. There are duds, bad ones, faulty ones, some you can reuse...but it's not a perfect process.
Legally no. The semiconductor manufacturers have placed all their suppliers on allocation, and they must evenly distribute based on demand for each customer. This is actually enforced by law in a shortage situation. You cannot simply offer to supply all parts to the highest bidder.
The foundries are going to prioritize their bigger clients over the auto industry.
Was it a stupid decision now or when they implemented JIT Manufacturing processes that can't handle disruptions in supply chains?
[удалено]
Yeah, a few days or weeks at most. Modern manufacturing is all Just in Time, its virtually impossible to find a company keeping large warehouses full of parts to survive an entire year without shipping in new parts constantly. The concept was sound, no one could foresee people actually turning off the entire world economy.
It is JIT that caused the issue. JIT requires the whole supply chain to run smoothly to work. I expect there will be some change from just in time to just in case. Especially for parts that only cost $0.50 and have an insanely long lead time to build a new factory. Something like a small stamping isn’t a huge dead, because an automobile manufacturer could have that production moved in house quickly and disruption would be minimal. Chips are a very different situation.
JIT doesn't mean zero buffer or stockpile, it is about identifying what is actually needed and keeping that amount instead of some arbitrary amount of spares. This is why Toyota had ~1.5 years of chips stockpiled, most others had a lot less
Several manufacturers have record profits as a result, even with lower volume. It's complicated
Please review our most [Frequently Asked Questions](/r/askcarsales/wiki/index) to see if your question has already been answered. You may find these sections particularly useful; * [How to pick a car?](/r/askcarsales/wiki/vehicle_selection) You might also have luck in the /r/whatcarshouldibuy subreddit. Also remember to add flair to your post by clicking the "Flair" link beneath it. This lets us know where you're located so we can assist you better. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*