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Near-record inventories pinch dealers


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my 2cents...since purchasing vehicles is beyond a majority of customers budgets, due to the ever increasing MSRPs, leasing has become the go to band aid. Only issue is...programs have to be competitive....right now that's not whats being "promoted". Now, before certain individuals start touting save up for down payment etc etc....valid point, but sadly something we are seeing less and less of....and people coming out of a 3 year lease aren't prepared for a $125 a month bump on the same vehicle they are coming out of. Ford is seeing more and more Lease buyouts....something that doesn't really help their numbers...but the lack of, or non competitive  programs ARE seeing bloated inventories....

 

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38 minutes ago, Deanh said:

my 2cents...since purchasing vehicles is beyond a majority of customers budgets, due to the ever increasing MSRPs, leasing has become the go to band aid. Only issue is...programs have to be competitive....right now that's not whats being "promoted". Now, before certain individuals start touting save up for down payment etc etc....valid point, but sadly something we are seeing less and less of....and people coming out of a 3 year lease aren't prepared for a $125 a month bump on the same vehicle they are coming out of. Ford is seeing more and more Lease buyouts....something that doesn't really help their numbers...but the lack of, or non competitive  programs ARE seeing bloated inventories....

 

This is the kind of stuff I think about when I say this increasing ATP stuff isn't sustainable 

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49 minutes ago, fuzzymoomoo said:

This is the kind of stuff I think about when I say this increasing ATP stuff isn't sustainable 

What’s the average transaction price on a F series truck?  $46K?  The sold a million of them last year.

As long as the products are desirable they’ll be fine even if sales volume drops a little.

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1 hour ago, akirby said:

What’s the average transaction price on a F series truck?  $46K?  The sold a million of them last year.

As long as the products are desirable they’ll be fine even if sales volume drops a little.

$47,454 at the end of 1Q 2019. F-Series customers are mostly upper class white men. Very desirable demographic. Ford is in a good position here.

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16 hours ago, Deanh said:

my 2cents...since purchasing vehicles is beyond a majority of customers budgets, due to the ever increasing MSRPs, leasing has become the go to band aid. Only issue is...programs have to be competitive....right now that's not whats being "promoted". Now, before certain individuals start touting save up for down payment etc etc....valid point, but sadly something we are seeing less and less of....and people coming out of a 3 year lease aren't prepared for a $125 a month bump on the same vehicle they are coming out of. Ford is seeing more and more Lease buyouts....something that doesn't really help their numbers...but the lack of, or non competitive  programs ARE seeing bloated inventories....

 

Yes, purchasing NEW vehicles is beyond the budget of many customers, but in reality, not everyone needs to purchase a new car. I prefer to buy low mileage used vehicles, keep them for about 100K miles, then look for another used vehicle to replace it.

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8 minutes ago, Trailhiker said:

Yes, purchasing NEW vehicles is beyond the budget of many customers, but in reality, not everyone needs to purchase a new car. I prefer to buy low mileage used vehicles, keep them for about 100K miles, then look for another used vehicle to replace it.

What factory makes low mileage used vehicles?  Still need to sell new ones to get used ones.

Edited by MY93SHO
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17 hours ago, akirby said:

What’s the average transaction price on a F series truck?  $46K?  The sold a million of them last year.

As long as the products are desirable they’ll be fine even if sales volume drops a little.

F series lease penetration is WAYYYYY over 75% ( at least here ) and comparatively speaking, their programs are better than most of Fords Others due to ludicrous residuals and an "ok" Money factor....leases on the new Ranger are absolutely preposterous....and to add salt to the wound...they just came out with subveened rates BARRING La and orange Counties?....random drug testing needs better enforcement at headquarters...

 

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12 hours ago, MY93SHO said:

What factory makes low mileage used vehicles?  Still need to sell new ones to get used ones.

Well obviously. A lot people bitch and moan about how expensive new cars are and how it’s stretching their budget. When they could just as easily buy a year or two old car and pay less. 

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2 minutes ago, blazerdude20 said:

Well obviously. A lot people bitch and moan about how expensive new cars are and how it’s stretching their budget. When they could just as easily buy a year or two old car and pay less. 

Unless it's a pickup because they hold their value well

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On 4/30/2019 at 9:18 AM, MY93SHO said:

What factory makes low mileage used vehicles?  Still need to sell new ones to get used ones.

Well with the programs Luxury manufactures run they basically do that. 

Even if you intend to buy the vehicle, you have to play the is it better lease or buy the vehicle game. With some of the Rebates etc you're actually better off to lease the car then just payoff the lease 3 months into it. 

Ford last month was really pushing the Edge and Fusion. They had crazy rebates on them, those rebates really help ATP's as ATP are figured BEFORE rebates are applied. (why you pay sales tax before the rebates are applied) You don't have to take the rebate as form of down payment, you can say just cut me a check for it. Financially speaking  when they run crazy money factors (that basically equal 0% interest) you do better to take that cash, put it in the bank and just take the higher payment and draw off that balance with it and just collect the interest yourself on it, just like with the 0% interest. 

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I agree prices are high, but also, people are keeping vehicles longer, why get new if "old" one is doing fine?

Someone in another car board had a theory that since there's so many equipment/option combinations of big trucks, finding the "right one" is harder, so some sit. GM and "Jeep-Ram Inc." have lots of left over 2018's. Not like a small CUV with 'take it or leave it' black/white/gray. Again, this is someone else's opinion, wondering what others think?

 

And, yeah, new cars cost more than used, but if no one buys, factories shut down, then no future "good used" cars. "Circle of car life"

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Are we now seeing the top manufacturers using more leasing to sell into a void as the market cools? Deanh's first hand evidence would tend to suggest that's been happening for a while in California...

It's like denial that there's a problem coming,  just keep pushing lease plans and get deals done to keep stock turning over and factories production humming....some older products and poorly received new products will really struggle without higher incentives  or good guarantee residual values. The great news is that new Explorer is almost here and Escape will join it in Q4 helping Ford's monthly sales.

Edited by jpd80
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