Hey! Welcome back to CarDealershipGuy's weekly newsletter. Where I break down all my best Twitter content, favorite news articles, and the latest car industry data in under 5 minutes.
- 📉 Returning to Normality?
- 🚗 New Cars Cost What???
- 💻 BMW Joins the Software Business
- 🎤 Both Sides of the Story
- 🚀 Launch of the Week
- 📖 Articles I Read This Week
Read Time: 4 Minutes & 56 Seconds
Returning to Normality?
Would you look at that!
Before we even break this down. We can all sit back, grab a large iced tea, and appreciate this. Because idk about you but seeing a decline (at least in this chart) feels pretty damn good.
This here is the Manheim (Wholesale) Used Vehicle Value Index.
And in June we can see that we had a seasonally adjusted decrease of vehicle prices by about 1.3% from Mays numbers.
This still puts us at a used vehicle price increase of 9.7% from June 2021.
So, yeah. Vehicles on average still cost more than they did last year. But, from the looks of it we could see these prices continue to slope towards normality.
We shall see!
New Cars Cost What???
All time highs! For new cars that is.
The average price paid for a new vehicle crossed the $48,000 mark and landed at $48,043 in June.
The previous champ was December in 2021 with a high of $47,202.
Even with the prices of used cars falling the demand is still high for new vehicles and the supply is still limited. Allowing dealers to sell these cars over the MSRP.
For example, in June the brands Kia, Honda, and Mercedes-Benz were all selling new vehicles above 6% MSRP.
But when there are winners there are losers.
The brands Lincoln, Buick and Ram were not able to sell all their vehicles above MSRP and in fact were around 1% below their MSRP.
Will these prices ever go down?
Yes! But the real question is when.
We would need to start seeing a variety of items take place such as an increase in supply to match the demand, an ease in supply chain restraints, and oh yeah maybe a little less inflation...
BMW Joins the Software Business
BMW has launched a new subscription service in a variety of countries that has everyone talking.
You might be asking yourself. Is it for music? Self-driving? Road assistance?
If you asked these questions than I would say you are a reasonable person as these are all amazing features to have on a subscription.
But, none of these are what we are talking about here today.
BMW has released a subscription model that allows you to pay to use your cars seat warmers.
Yeah, seat warmers.
In some countries you can pay either $18 a month or $180 a year to use your cars seat warmers.
Meaning, yes, the car comes with all the equipment needed to heat your seat but its behind a pay wall.
At first glance this has people up in arms. But after some thought I think for a certain group of people this might actually make sense.
Hear me out.
Let's say you live somewhere where its only cold a few months of the year. You would pay the $18 for a few months and then for the majority of the year when its hot and you don't need them you don't pay.
Depending on how much you save by no longer having to pay for the equipment up front you may actually be able to save money on this.
But, like I said. This is only offered in a few countries right now and only time will tell if this feature gets implemented into BMW's in the United States.
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Both Sides of the Story
In a recent Barron's article written by Lisa Beilfuss she included lots of information. But NONE of it was info that I gave her when she reached out asking for my input. So I wanted to use this newsletter to share some of the points that I gave to her that she conveniently left out of her article.
- Nearly every single one of our lending partners is stipulating for income verification upon a sale of a car. This is very different from 2008 when many lenders didn't verify income.
- Every single outstanding retail installment sales contract would have to go into default to have the dollar figure magnitude of the 2008 mortgage crisis.
- Retail demand isn't showing any signs of slowing, If anything we've only gotten "busier" which tells me that the consumer is still strong.
- The only concerning data point is that the average car payment in the US just hit a record $712 - this will absolutely result in more defaults but we are not seeing anything just yet.
- The video of the cars sitting at auction that has gone viral isn't something that is out of the ordinary. Cars and repos always sit at auction prior to being sold. Average person just doesn't know that so when they see 100s or 1000s of cars just sitting they think its indicative of an issue (it's not).
If you want to read her article to see what I am talking about you can find it here:
Launch of the Week
What's this? A new website???
I wanted to make something special for us. So I did a little revamp of the website.
Don't worry all of the information and guides are all still there and can be found on the Wiki page of the website.
I just wanted to create a central home where I could have a Home Page, Wiki, Shop, Newsletter, etc all under one accessible roof.
Come check it out:
Oh and before I forget. As a little thanks for making it this far into the newsletter I wanted to give you a little something.
Here is a promo code for 25% off all CarDealershipGuy merch: Launch25
The promo code ends in one week so use it quickly!
Articles I Read This Week
- So it looks like everyone is screwed because someone figured out how to hack into the last 10 years of Honda vehicles.
- You know EV's are blowing up when Chase bank starts offering a course on how to buy one.
- Looks like Rivian is next up as they announce their plan of layoffs.
- The CEO of Michelin (yeah the tire company) says that there is a slight recession now with a rebound not until 2024.
- A new poll finds that more Americans than ever before are interested in going EV.
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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.