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Boardies, would you weigh in on this and try to explain why auto prices haven’t taken a price hit like other industries
*bwia, the auto industry, especially in the U.S., is literally run by the unions. When the bailouts by the Obama Administration were implemented, even after the bankruptcies, the Administration made sure that all union contracts and pension remained "untouched" as a result. So, the cost of building a car in the U.S. in companies who employ UAW workers has gone up along with pension costs and negotiated salaries and benefits. Also, remember that the U.S. Auto industry was given an "exception status" for health care - which means that GM and Chrysler and Ford, etc., do not have to pay the penalties for health insurance coverages like other industries - but health care costs have gone up on average of $2500 per covered insured, so that has added to the costs of building a car.
When we get to foreign automobile manufacturers, Mercedes, as an example, increased the prices on their cars by 1%, not 2.5%. I believe Audi and BMW had similar priced increases (about 1%). Additionally, the value of the U.S. dollar is decreasing as a result of the Federal Reserve "PRINTING" money as a means of purchasing debt. So our dollars don't buy as much as they used to.
This is the reason oil prices have gone up and up and up. The U.S. dollar is being devalued. Additionally, demand for oil has decreased so to make up for the decrease in demand, the Saudi's, Iraqi's, the Emirates, etc., have raised their benchmark prices on crude. If Obama had not eliminated or decreased the ability to lease oil properties on Federal Lands and had signed the Canadian Pipepline deal, oil prices would begin to fall because the world would see that the U.S. was determined to become less reliant on middle east crude and more reliant on North American crude - it would have had a psychological impact on the rest of the world.
You are correct in your assumptions that in the face of an economy that is at 0 growth, or close to it, one would think prices would fall - but they haven't! Why? Because the Administration wants high oil prices so that alternative sources of energy would become less expensive in relation to oil. And you see what the Dept. of Energy has done - spend billions on alternative renewable sources that have all but failed. You can't run an automobile on windpower or solar power, can you? Go back to want Chew (energy Sec'y) said in 2008 - we want expensive oil to increase interest and support for alternative fuels!
I could go on and on, but I think I have answered your questions.
2024 Genesis G90 Super-Charger
Correction, all of them HAVE failed and miserably, too !!
I don't think anyone can name even one that is working. I know I can't.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Not quite. You gave a partially good argument for the high price of oil but not cars. If, according to you, the demand for oil is down, then we should see a commensurate decrease in prices at the retail pump. The price of crude has dropped yes, but it hasn't trickled down to the pump.
On the other hand, I understand clearly the reason for the increase in production costs of an automobile but that does not necessarily mean a manufacturer can pass those increased costs to the ultimate consumer. Only in cost plus pricing arrangements, such as in the regulated utility industry and government-type contracts can increased cost be pushed down or passed on to the buyer or consumer.
The automobile industry is not a monopoly nor is it regulated by the government as in the case of utilities. So, if the economy is in a recession, and by extension, weak consumer demand for automobiles, how can prices continue to remain stable or even increase by the 1% mentioned. Perhaps demand for autos is not as weak as many claim. Instead of say, the 16 million plus units sold annually the new normal is probably 13 million and as a result manufacturers have adapted/adjusted to lower demand.
Practice techniques sure have changed for the better. We had one drill where everyone got down on their stomach in a long line side by side. The first guy would peel off, take a running start, and crash into the next guy, helmet to helmet, the next guy would then follow him, then the next, and so on, all the way down the line.
We had two a days starting around mid August with each session about 2 hours. It was kind of hot and humid in south Arkansas...and we were NEVER allowed a drink of water until after practice. Funny thing is, in all those years nobody died or even had a heat stroke that I can recall.
2013 LX 570 2016 LS 460
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive
Mike, you did an excellent job of explaining the situation and why we are in it.
Richard
I'm not sure how many of them remain, but another one failed today. When I think of all of those tax dollars wasted....!!! :mad:
Richard
Don't be so sure. When the CEO of a major car company can be fired by the White House, I call that government regulation. :sick:
Richard
2001 Prelude Type SH, 2022 Highlander XLE AWD, 2025 Camry SE AWD
2013 LX 570 2016 LS 460
Her older brother, that was pretty easy. He knew what he wanted (the key stuff) and was real easy going about looking. Quickly narrowed down to a relatively short list, he applied, we visited a few, and as soon as we hit the one he is at that was it, he was hooked.
the daughter, she doesn't want to deal with it. No clue what she wants to take yet, doesn't seem to have an opinion on size, etc. Just not too far away or too close to home!
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
I don't know if anyone else has mentioned this but my theory is tricke-down poverty.
By that I mean as times get tough people who would have bought new buy slightly used, people who buy slightly use buy more use and so on down the line.
At my level I see cars that 4 years ago would have sold for $1000 now going for $2000-2500. I don't know if they are getting those prices but they're sure asking.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
2018 430i Gran Coupe
You have coined a great phrase, and I think your theory makes sense.
Maybe it is part of the plan, get the price of used cars higher so people will buy more new cars and then this could ignite the economy! Brilliant!
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Or stop driving altogether. There is plenty of room in "lifestyle downsizing". One can start from taking away teenager's car, then have one car per family, then you can switch to a bicycle
But seriously, if income pressures continue, more lifestyle cuts will follow. The new car prices do not have to follow at all - in fact, the prices may accelerate going higher. It can be seen in low volume, low income markets where cars have some of the highest prices. Pricing is almost inversely proportional to volume. If you can't sell as many units, you might as well try to make more on ones you sell (moreover, fixed costs spread over fewer units). Nanny state madness with increasing mandates on new designs may also come to an end on simple fact people won't be able to afford the new product.
2018 430i Gran Coupe
When we married in 1967, we only had one car. My wife dropped me off at my high school at 7 AM each morning and drove the car 15 miles to her elementary school. If I had meetings after school, she just sat in the car and graded papers---which was usually the case. This type of arrangement continued for 12 years until March of 1979. My high school burned to the ground one night---fire set in seven locations by five high school seniors. We went on a double shift with the nearby junior high. I didn't report to my shift until 1 PM. We bought a second car in 30 minutes! I had to have a quick set of wheels. From then on, we had two cars. In those early years, few teens had their own cars. When you think about it, it's amazing what you can do without. There may be some inconvenience and some give and take, but it can be done. Who knows? The day may come when we have to return to some of those old fashioned habits. Heaven forbid if people were to go without a cell phone for a day!
Richard
So your old country was Craigslist? :confuse: :confuse: :confuse:
:P
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
As much as I [non-permissible content removed] here (or in other venues) about things I don't like in America (and believe me, I don't like more than one thing), it is a country of most honest people I know - not necessarily nicest in their conduct, but certainly honest in terms of every day behaviod. I attribute it not really to them being so much better than everybody else in the world, but to the balance of incentives and disincentives for ethical behavior that is just right. It's the law, the social pressure to do right thing. The American exceptionalism is just that - it's ordinary people, by many measures below average in education and knowledge about the world, but what I call "the system" that enables those below average people to succeed, by putting them in a right environment (whether in a poductive company, their own business, or other venues). Even dreaded government, which can be considered terrible at times, is still better than in majority places of the world. You may need to spend 2 hours in DMV, but in some other place, you'd need to bribe an official and spend three days. Yes, the crooks exist, of course, some in high places, some in low - the point is normal person wanting to behave ethically finds it rather easy to live here a normal life, as long as they have some talent and wilingness to work.
2018 430i Gran Coupe
2013 LX 570 2016 LS 460
2018 430i Gran Coupe
I will also just use my wifes car at times. That is the good car anyway.
helps that I work from home almost all the time, and if I do have to go into the office, it is 3 miles away, and my wife works at the same place.
No chance I would ever go down to 1 car, but if we can't manage with 2 cars for the 3 of us, it is impossible!
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Yes, yes it is. I had the opportunity to visit Poland a few weeks ago and toured a couple of aerospace aluminum foundries in Stola Wola and was blown away with how much growth there is these days in Poland. One of the facilties was nearly new and had 1200 employees delivering high-quality castings to several multinationals, and the other was run by a guy from Cleveland (Polish heritage) with more energy than any 12 of the foundries I normally deal with.
Plus which, the dinner prior to the first facility tour was very memorable, for a variety of reasons. . .all good.
Walk proud.
Very interesting article dino. Sometimes, it is nice to be reminded just how fortunate we are, living in countries where honesty actually matters.
When I started my company, 18 years ago, it would be easy to cheat my retail customers. They counted the books I brought in, but, I could have taken books out of a store with me. I never did that, because, if my business was built on dishonesty, it wasn't worth anything....and how can you keep growing if your business is based on cheating people.
We are very lucky, we live in countries that are basically honest, and where there is a pretty good legal system. Not perfect, but a lot better than in most of the world.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
2018 430i Gran Coupe
I am not as optimistic as you, *driver! Maybe in Canada you feel the "honesty", but I certainly don't. When billions are wasted on pet crony projects like Solyndra and deals worked out with the UAW to preserve health insurance and pensions after a bankruptcy; when the government gives $7500 credits and rebates for electric cars; when the deaths of 4 Americans are blamed on some little known film production about Islam; when we are lied to over and over again by our top leaders; when Medicare is "raped" by $716 billion to pay for health insurance for 30 million uninsured; when we are promised health insurance premiums will go down by $2500 a year per person and they go up $2500 instead; when we are told Medicare and social security are well funded and then find out they are almost bankrupt; I could go on for paragraphs, but we are certainly not being given the truth by our government - but rather lied to over and over again.
We are going to become another Roman and Greek Empire that disappears sooner than later - because of corruption!
There, I told you the TRUTH!
2024 Genesis G90 Super-Charger
Though a long story, I'll try to condense it. As you know, only one person can keep a secret. The fire was immediately identified as arson. The boys just couldn't keep quiet. Slowly but surely, other students began to know who the culprits were. Because of that, some teachers such as myself were taken into confidence. Naturally, the incident began to attract the interest of state and regional news media, as well as the FBI (federal funds you know) and the SBI. Many students and teachers were questioned and the school was filled with law enforcement officials for weeks.
It was common knowledge as to who the arsonists were, but acquiring proof was difficult. Finally, the homes of the suspected boys were searched. As luck would have it, three of the boys just had to keep a couple of souvenirs from the fire---principal's desk set, trophies from the hall awards case, book cart from library, etc. After several months, it appeared that finally arrests would be made. Not so.
These five boys were all-star senior academic athletes from wealthy families---two lawyers, one doctor, one congressman, and one stock broker. It was their summer after graduation. Things began to happen. Two of the boys were shipped off to Europe. One left for private military school. One went to California, and I don't remember what happened to #5. We then began to hear about large amounts of cash exchanging hands and night meetings behind closed doors. The next fall there was a secret benefactor who gave money for the new stadium and school library. The high school principal and superintendent mysteriously resigned over the summer. Months went by and the talk died a slow death. A year went by, then two. We just went on with our lives.
I never saw the boys again until seven years later when I had the shock of my life. One of them came to town and set up a law practice! He's still here. Now and then, you'll hear someone speak of the fire. It's been 33 years and I still get angry when I think about it. It wasn't just the lost school records, the lost equipment, the struggle to teach on a late day shift, the difficulty to plan a graduation ceremony, etc. that makes me so angry. So many people's lives were inconvenienced and altered for months. The real anger came from knowing that money, social influence, and political manipulation ruled the day. After all, I was a teacher who taught my students that justice does prevail, that ethics and morals mean something, and that those who try to live right are the ones who are rewarded in the end. I do still believe that, and I can only pray that my former students believe that, too.
Richard
Richard
Everything is relative. Our countries both have major problems and probably always will, and we have just as much waste and corruption as you do.
BUt, be thankful, you made a nice living and had a nice career, a nice car, good medical care etc. There are many countries where you would live in fear every day, and where all your possessions could be destroyed. Where you could be killed or tortured without legal protection.
Make your glass half full....yes, there are lots of problems, always were and always will be......but, the USA and Canada are about the 2 best countries in the world to live in.
(There are some pretty good countries to live in, not saying England, Norway, Sweden, Denmark etc. are bad........but, I think for what most of us want, this is the ultimate)
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
*driver, over the past 12 years, we have seen a deterioration of our American way of life. Ever since 9/11, we have been on the defensive. First, Bush with his need to destroy Sadam Hussein who had nothing to do with 9/11 - he just wanted to get even for the attempt on his father's life. Then the mortgage brokers and wheeler dealers who deceived their clients and the rest of us with their deceit and cover-ups. Then, we elect a president who never even ran a candy store, let alone a state government or even held a job that required accountability and expected him to solve all our problems - and now we have a thousand more problems than we had before he was elected. We used to be the leader of the world, and now we can't afford a decent standing army for any length of time.
Food and gas prices are out of sight and 47% of the people in this country pay no federal income tax. Almost 50 million people on food stamps. Entitlements have all but bankrupted this once thriving and proud nation and now we are lied to by our own government.
Something has to give or in 10 years we will be faced with another world war in the Middle East and Africa. Mark my words, without leadership, we are doomed!
2024 Genesis G90 Super-Charger
I think someone could make the case that the leader has very little affect on anything....prosperity is based on economic conditions and world wide events and luck.
However, I fully understand your viewpoint. I come from a family who were always negative. I have to fight those feelings, because it leads to disatisfaction, unhapiness, and it makes it impossible to get ahead. When you think that way, all your thoughts are on gloom and doom.
Did you ever hear about the guy in the row boat? If you float aimlessly you get nowhere, if you have a goal chances are you will eventually get to your goal. Think of teenagers, the one's who smoke pot and live one day at a time get nowhere, the one's who have goals and ambition move ahead.
We both have great countries we live in....the problems seem unsurmountable, but, the world has faced those kind of problems before and survived....you would have really thought the world ended if you lived during WWII.
We have problems, they will find answers. But, is there any period of time when you would rather have lived?
I'll let you respond, but this is my last post on this subject as we are a little off topic. You could be right in what you say, but, it will be difficult to advance if you already believe that we are doomed.
By, the way, nothing personal, I respect you and your comments a lot, and I know how easy it is to be caught up in negativity, but, part of what makes your country so great is the optimism and motivation, to move on and just never give up. We have to at least believe things will get better, or we won't have a chance.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
I am only stressing the importance of "up-front" leadership! We don't have that right now! And this is my last post on the subject as well!
2024 Genesis G90 Super-Charger
She paid about $5K to move her belongings out there, and another $1K to have her new Camaro trucked out there. You can see where this is going. She gets there, all of a sudden their relationship isn't as solid as she was led to believe it was. She, being a widow, fell for the first guy after her husbands passing (at age 51) who told her he loved her. I didn't think she was so gullible. But, that's a different story for a different time.
So, now she's back in SW OH with the prospect of having a car that is not, in any way, shape or form, meant for winter driving. Our winters tend not to be all that bad (say, compared to NYC, Boston, Minneapolis, or Chicago). Many years (like last year), I don't even think we had enough snow fall in total to cover the ground. Every once in a great while, we'll get 5 or 6 inches of snow, and everything comes to a stand still. That's not often, however.
Wet and cold? We can plan on that being fairly common in the winter. At which time, a Camaro with performance tires, with a terrible front to rear weight bias, and a monster HP and torque engine, will spend more time sideways than going forward.
The goal is to find her a car that costs $2K-$3K, no more. It has to be winter capable. And, it has to be at least relatively reliable and not rusting off its frame.
OK Edmonians......what say you?
Tell her not to give up. There are still guys like me who will marry a girl with a hot car.
For her winter beater try Craigslist for some old Detroit iron. They will be cheap because people don't consider them sexy. Something like a late 90s Lesabre with the reliable 3800 engine and front wheel drive. 30 mpg on the highway and rides like a big marshmallow.
I don't know where in Ohio but here's something from Cleveland:
http://cleveland.craigslist.org/ctd/3336071982.html
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
That is scary. This isn't the first time we've noticed the absence of shoppers there or at the other malls we frequent with the exception of Sawgrass Millls where they attract consumers from out fo the country like Brazil and the Caribbean.
Eventually those empty stores will be occupied, but it is just a sign of the times, I gessl.
2024 Genesis G90 Super-Charger
Good luck on that one! $2 to $3K that will get her around in the winter, and start too?
That is a sad story, she is probably a very nice person who was taken advantage of.
No easy answer there. I am not sure storing the Camaro for the winter is the solution. I think the car should be sold and she should settle for a lower cost AWD or FWD car, and chock it up as an expensive lesson, that would have been a lot worse if she had actually hooked up with that creep.
If she bought the Camaro for say $35K, can sell it for $30K or even $26K, and buy something for $25K, it isn't pretty, but still better than trying to get by driving a $3000 car, that won't be very reliable.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
What? And take a $10k hit on top of the probable $10k hit she took from Mr. wonderful? I guess if she only bought the car because of him it might rid her of painful memories but otherwise if she likes the car why let that jerk cost her any more cash?
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Ha ha I see a lot of walking in your future!
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
I was in the same situation. I live in the Boston area and brought a wholly inappopriate car for the long winters we can have here. I dodged a snow bullet last year, snow was generally MIA (except for the storm that cancelled Halloween! Cruel, Mother Nature. Very cruel. We got a rock).
Anyway, I decided a winter beater was the solution for me, I actually got quite excited about finding this miracle sub $5k snow sled. Not sure about the inventory availabe, but I was close on a 1993 Infiniti G20, back then it was noted as one of the most reliable cars on the road. Small-ish tires, FWD, good handling, some luxury. Wife got wind of my plan, said no more cars, will share SUV with daughter as needed this winter. Daughter, of course, does not approve and remains in constant state of annoyance with me ("You bought your car, you have to live with it." Um, dearest daughter, I also bought "your" car...).
As previously noted, vanilla domestic sedans seem plentiful and inexpensive compared to the Subies, Hondas, Toyotas and Nissans I really wanted. There's a nice looking Buick Century I pass on the way home nightly, asking $3400, down from 3600 a couple of weeks ago. I think Buick has had a good reliability rating for some time, among the GM stable.
But, I'd still go Japanese if possible. Seems to be a good supply of old Corollas, Camry's, Civics and Accords around here. Just a bit pricier than the domestics. My family also had good luck with Mitsubishis (in the '80s & '90s), a used Lancer, Gallant or one of their SUV-lets might be a good deal?
'21 Dark Blue/Black Audi A7 PHEV (mine); '22 White/Beige BMW X3 (hers); '20 Estoril Blue/Oyster BMW M240xi 'Vert (Ours, read: hers in 'vert weather; mine during Nor'easters...)
The U.S. is just like a guy who is living in a $100,000. house, and because of easy credit and irresponsibility, he has a $1,000,000. mortgage on the house.
The only way the guy can pay his monthly mortgage is by printing counterfeit money in his basement. One day he gets caught, the mortgage co. forecloses, and suddenly he is penniless and homeless.
China is our mortgage company...and we are at their mercy.
2013 LX 570 2016 LS 460
I can tell you that in my home town it would have been "handled" differently and the police probably wouldn't have dispensed the justice.
For a couple thousand dollars she can buy a great set of shoes for the Camaro. With a light foot, all the traction controls turned on, and terrific winter tires, she'll be safer in that Camaro than a worn out beater. Keep in mind other motorists, too. She's more likely to be struck by someone else out of control, and having the latest impact technologies protecting her would be ideal.
In my opinion the metaphore for US government is a little different: guy making $1M per year spending $1.7M per year in last four years and planning to spend same amount in next four years with his income growing to $1,050,000 per year and calling it "good start" in reduction of his deficit. So why banks actually let this guy live like that? Well, he has couple of houses and empty plots of land, worth quite a bit (and those can be sold if needed), he also has a printing press in his basement and for some reason, unknown really to most (and nobody dares to ask), people in the neighborhood accept the money he prints. He somehow also has a few really rich relatives he can always shake down for cash (or so everybody believes he does), if the fake money is no longer good. Last, but not least, everybody else in the neighborhood seems to be in much worse shape than this guy.
The problem with rich people (especially kings) is they're always good for the money they are being lent, until they're not - or to be precise, until somebody actually asks for the money back RIGHT NOW. Then usually those supposed rich will first say "next week", then will tell you a story of this shipment they have coming, but the customs are holding, finally they'd start huffing and puffing, talking something about an outrage of those greedy bankers and how dare they (kings would organize a "spontaneous" riot that magically wipes out the creditors).
2018 430i Gran Coupe
Can we expect to see you in the audience on TV?
2014 Malibu 2LT, 2015 Cruze 2LT,
gg - yeah, find her a decent Lesaber. That would do teh job. I don't know if we ever learn about the whole establishing serious relationships no matter how old we get.
Yes, I am. Lynn University is in Boca Raton on Military Trail. I'd say about 8 miles away. I'm staying clear of that area for obvious reasons - security starting getting tight early this morning.
2024 Genesis G90 Super-Charger
I do miss the cornering lights from my Passat.
Nah, he can add enough lights to the Wrangler that will make him forget the ones in his BMW.
My local BMW dealer just took a 1997 BMW Z3 in trade; it's a four cylinder stick with just 32,500 miles on it... :surprise:
So here's the plan(suggested by my wife): sell the Mazda and use the Z as my commuter car. It actually makes sense. I'll probably need to travel over 20,000 miles per year for the next 2 to 2.5 years. If I use the Mazda(which now has 110,000 miles on it) in 2014 I'll have a 7 year old car with @150,000 miles on it. The Z would be a 17 year old car with @75,000 miles on the clock. Based on my experience with my 1995 318ti -which is virtually identical under the skin- I should be able to keep it running for quite a bit less than the Mazda. I've already checked with my insurance agent and the Z costs $270 less per year to insure.
I drove it today, and everything works(heated seats, trip computer, electric seats/windows). It needs a new rear window and there is some wear on the driver's seat but other than that it looks brand new. Time will tell...
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive