Welcome back to the CarDealershipGuy newsletter. Where you can get all the top automotive news in 5 minutes or less.
- 🎢 Biggest 1-Month Decline Ever Recorded
- 👆 Fleet Sales Are Slowly Rising
- 🔌 This Newsletter Is Brought To You By DIMO
- ✂ Ford's Ambitious Plan To Compete With Tesla
- 📖 Articles I Read This Week
Read Time: 4 Minutes & 16 Seconds
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Biggest 1-Month Decline Ever Recorded
The Manheim August Used Vehicle Value Index is in and they did not hold back any punches.
In August we saw a 4% decline in used vehicle values.
This is the BIGGEST decline ever recorded. Excluding the artificial COVID induced decline of march - April of 2020 of course.
What's even crazier is that we are still up 8.4% from last year's values.
This is still good news for buyers though. As it means prices are coming back down to normal levels, meaning prices before 2020.
But here is my opinion.
If you are looking to buy a car.
Wait just a little bit longer. Ideally till the end of Q4 which is in December.
As we are still seeing massive declines in used vehicle values and are at an average of about 1-2% decline every week.
Good luck and may the odds be ever in your favor.
Fleet Sales Are Slowly Rising
Here is a chart highlighting August 2021 vs 2022 sales for four different vehicle categories.
The four categories are:
Every category but Rental has gone up ever so slightly from last year's august numbers.
Why not Rentals? There is a huge supply problem in the rental car realm right now. I can imagine that there are the same if not more people trying to rent cars right now but they simply can't because of the limited supply.
But the other three categories all saw an increase in sales:
- Commercial - 36.9% increase
- Government - 28% increase
- Retail - 3.7% increase
I think it is safe to assume that the major cause of the increase in sales is the falling prices of vehicles. All these people that have been trying to buy a car but haven't been able to afford the crazy high prices are now finally breaking into the market. Purchasing those vehicles that they have been waiting 1-2 years for.
This Weeks Newsletter Is Brought To You By DIMO
I love wearing my Apple Watch just as much as a San Francisco tech bro.
It allows me to do all kinds of things like:
- Track and record data about my body
- Showcases this data to me in an organized and effective way
- Gives me achievable goals
- Show me what areas I am lacking in
Now imagine if you can share all this data with a doctor or insurance company for better service/pricing.
Wouldn't that be great?
This is what DIMO does. But for your car.
DIMO is a simple, beautiful app that allows you to collect and store all the data from all of your cars for free. Here is some of the amazing data points you can track with DIMO:
- See where your vehicles are
- Monitor their fuel or charge levels
- Upload your documents to a virtual glovebox
- Get a complete history of the health of your cars
Plus – you can earn rewards just for contributing your car data to DIMO’s open developer ecosystem.
Download the app today, connect your car, and start earning rewards.
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Ford's Ambitious Plan To Compete With Tesla
When you think of EVs almost everyone thinks of Tesla.
Tesla has been at the head of the EV push since the very beginning. Putting in all the grunt work to get the EV train running while all the other companies were frankly just being complacent.
But now that Tesla is eating Ford's lunch Ford wants to do something about it.
There is one big issue though. Ford, legally has to sell through franchised dealerships. Whereas Tesla was able to work around this law.
Putting a middleman between you and your vehicle. Causing unnecessary price increases that the customer has to bare.
Giving Tesla a huge advantage as they have the ability to fluctuate prices at a moment's notice and sell their vehicles for exactly what they want.
But almost every other dealership, Ford included, can only provide MSRP to dealers and then the dealers can decide whether they want to sell below, at, or above MSRP.
Making it extremely hard for Ford and other automotive brands to compete with Tesla on a price level.
This is why Ford CEO Jim Farley is headed to Las Vegas next week. He wants to meet with dealers to convince them to lower their selling costs by at least $2K. Allowing Ford to stay competitive with Tesla.
Will the dealers listen?
Honestly, I am not sure if they will listen. But if I were Farley I would have a plan up my sleeve for additional ways for dealers to make money or else he is in for a world of hurt.
Articles I Read This Week
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.