4 Years of Markups Finally BROKE the Car Market!

4 years of greedy dealership tactics have officially BROKE the car market as we know it. The huge markups, ADMs, addendums (whatever you want to call them), led to people overpaying for their vehicles. This has driven up the national average of negative equity substantially. People feel stuck, they owe more than what their vehicle is currently worth and banks aren't handing auto loans out like candy anymore. Dealer inventory levels are to the moon... to the point they're having to turn away allocations and deliveries. Something has got to give, and soon... or else a car market crash will be inevitable.

Topics I discuss in this video:
5 years of dealer markups finally BROKE the car market! [UPSIDE DOWN]
- Supply constraints drove dealership greed…
- Dealers were quick to put revenue over reputation… now they’re kicking themselves.
- Chip shortage being a lead driver [semi-conductor chips]
- Desirable trimmed vehicles were impossible to find… many coming with $10-30K markups
- Even normal cars would cost $1-5K over…
- 3-5 month window where deals were to be had…
- Interest rates were sooo low (money was cheap)
- Loyal customers got the shaft
- Returning customers were flicked
- Used vehicle prices were hugely inflated
- Inflation got out of control
- MSRPs were hiked 42%
- Lenders were issuing inflated loans… 135-150% LTV.
- Now supply has far exceeded demand
- Discounts are now huge… Bronco Raptor example $123K… now $73K… $50K gap.
- People who have been paying for their 5-6 year loans still owe huge amounts
- Negative equity is $7200
- G63 AMG… Porsche 911 GT3… C8 Corvettes… Ford F150 Raptors, Bronco Raptors, Toyota 4Runner, Tundra, Sequoia, Tacoma TRD Pros… RAV4 Prime!
- Banks would roll negative equity into their new loan.
- Repo rates have skyrocketed 23% in 2024
- Repo men are backlogged 6-7 months in many parts of the country…
- 3.8% average end of 2022
- 7.7% average end of 2023
- Now average is 7%… 11% used
- 17-25% interest rates for people with poor credit. See it from Carmax.
- Now people are stuck
- Luxury vehicles being offered by non-luxury segment manufacturers like Jeep. Grand Wagoneer… $105K
- 1.6 trillion in debt across the US… car loans
- Inventory levels have seen unprecedented growth rates. 120% over last 2.5 years..
- Depreciating assets… we often forget that.
- Doesn’t help that modern vehicles have seen a huge decline in quality and huge hikes in price
- Lots of outsourcing to cheaper labor countries… Mexico, India, etc…
- A paid off vehicle is the best type of vehicle!
- Do research before committing to a deal.
- You are in the driver seat!

What comes next? Will we see dealers slash prices even more before going belly up? Let me know your honest thoughts of the impending car market crash. If you found ANY value in this type of content, please consider Liking and Subscribing. Your support means a lot, thank you!

-Stay Untamed...

#carmarket #carsales #marketcrash

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[ben_]

$60k for a Escalade with 110k miles is beyond hilarious and insane.

[adamc]

4 I worked for a dealership from 2007-2011. They refused to drop prices during a recession, and refused to budge on who they loaned to. Here’s the real kicker - they would crush cars and mark them as a loss on taxes and to insurance. Car companies would rather crush a brand new vehicle than sell for a cheaper price. If the government bails them out we need to protest big time. There’s no reason things should be like that as a lot of companies have to adjust prices, but car companies feel like it depreciates their brand for some reason or another.

[davidcortez]

I bought my 2021 Tacoma TRD Sport 4x4 at the end of 2020 for $38k. Now you can’t touch the same spec’d truck for under $50k. Absolutely insane

[vincentsamaha]

Consumers need to punish dealers by driving their current vehicles longer. Don't pay these insane prices.

[dustincollins]

I have 0 auto debt. 0 credit card debt. It's a wonderful feeling.

[davidallen]

A few months ago, we looked at a 2500 Silverado to tow with. They had a $10K Dealer Convenience Fee. When I asked why, the saleswoman told me that the truck had $10K in factory rebates, so it was a wash. So I said that basically, this dealership is stealing my rebates? She just walked away from me and we left.

[JohnJohnson-hyzc]

People are feed up with outrageous prices!
NO GOVERNMENT BAILOUTS TO THESE GREEDY COMPANIES!

[Ironswiftness]

never thought we'd see the day when households making 150-200k annually can't really afford a new vehicle. Sure they can "afford it" but it's way more financially damaging than it used to be.

[stephen]

The only car I've owned the last 10 years is a Subaru Forrester bought new in March 2015 for $25, 093 CASH. I haven't had a car payment in 40 years. Take this gentleman's advice and stay out of debt - that's the path to becoming financially secure.

[craigpatterson]

10-15% off invoice is not enough on these ridiculous prices. I test drove and wanted to buy a new Bronco. We went in to make a deal and they laughed when I asked for their best price. I suddenly felt really stupid trying to negotiate on a 70, 000, mostly plastic, depreciating asset. Instead of writing a check, I drove home in my 2014 Toyota FJ cruiser. I drove with a huge feeling of relief.

[Big-xeit]

46 years old and still have never purchased a vehicle over $2000
I'll rock a shitbox until the wheels fall off..😂

[debrisremoval]

Im 30 days away from paying off my truck! Never again! 8 years of hell!

[davidsigmon]

Middle class is out when it comes to buying a new vehicle.

[TheMeepster]

Discontinuing all the cheapest vehicles during covid was one of the most irresponsible things the auto industry has done recently.
Nobody makes basic economy car anymore, and any company that doesn't start soon is gonna be in for a rough ride.

Everyone who was dumb enough to take out a 5+ year auto loan already has, and is now drowning in negative equity.

[thewizard]

What happened to $15k base line truck models ? Its ALMOST like they put all the spy tech in all the vehicles and are charging you 5x

[jerrypelletier]

At 67 years old I never buy new, and I never buy from a dealer... Never/ever a car loan!!
And I live just

[thepositivelyfe]

poor people get into ridiculous car loans just to show off lol.

[jodrizzly]

My parents who have been massively broke and financially irresponsible for my entire life just got done bragging to me that they bought a used 2022 Ford Expedition from the local ford dealer for $55, 000. Im at a loss for words and I have no idea how to talk to them about how they just signed themselves up for failure. I also genuinely have no idea how they got a bank to agree on giving them a loan for it. My dad even sent me a text saying “the salesman is a super nice guy you should go in and talk to him.”. And no joke this was a day after I just had dinner with them and was talking about how scammy car salesmen are.

[dl]

Prices are insane I am going to continue driving my 2012 Tundra until this corrects itself. I don't need a $65K truck, I am not rich. The payments are 70% of my house payment is what have we done to vehicle pricing so dumb.

[timkis]

the only vehicle id pay 60k$ for with 111k miles.would need to be made by peterbilt or freightliner.