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      03-19-2020, 01:19 PM   #1
aerostar
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Will the pandemic economy cause a drop in new car prices?

Will there be crazy deals to look forward to in April?

It's my first recession, so learn me good!
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      03-19-2020, 01:24 PM   #2
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Interest rates have been the first incentive to come. Lots of 0% and 0.9% offers out there.
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      03-19-2020, 01:24 PM   #3
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This isn’t a normal recession. I think it’s a matter of time before dealerships close. Or introduce virtual ordering. In which case you may be in luck.
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      03-19-2020, 07:13 PM   #4
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Already has makers offering 0% financing etc so yes
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      03-19-2020, 08:43 PM   #5
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I am sure foot traffic at dealerships are down. I think you will be able to get a great deal on any car that is in stock.

It will be interesting if models like the M2CS are actually release with the shutdown of BMW’s manufacturing in Europe.
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      03-19-2020, 09:04 PM   #6
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I see upward pressure in new car prices, because the supply is restricted due to factory closures. New car purchases are often driven by necessity. Purchases can be postponed, but if someone has a car they are not willing to invest repair dollars into, they will buy a new vehicle.

As dealer inventory shrinks because of production stoppages, I see prices going up. Transaction volume may shrink, but dealers know how to do one thing very well. Make money.

Prior to the virus, the consumer was very healthy - employed, high savings, low debt. Once the virus haze clears I see a strong economic rebound.
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      03-19-2020, 09:15 PM   #7
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The pipeline is still full. In the short run you can probably get a ridiculous deal. A few months from now desirable cars will be hard to get.
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      03-19-2020, 09:21 PM   #8
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Who is buying now? Less people driving right now and you are looking at delays at custom built cars since the factories in Germany and Africa are shut.
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      03-20-2020, 12:16 AM   #9
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"Deals" are always relative to how you look at the big picture and your purchasing power.

If dealers decide to slash prices 2-3%, offer 0% financing, etc. but your portfolio just took a 25% hit, job is at risk etc. then the car is actually probably "more expensive" for you now than it was a month ago.

I'm sure you'll get dealers trying to move a ton of inventory ASAP once they come back online in the states that are shutting down "non-essential" businesses.

But this shutdown is unprecedented. Who knows how long it will last. You still have supply coming in (cars tend to take 2-3 months to go from factory to ship to dealer lot) so you may not feel the supply constraint until the summer. If the crisis has passed and people are spending again then I don't think dealers will be offering deals...actually they may be in a strong position at that point. If the crisis hasn't passed at that point, well then we'll have much bigger worries than dealer discounts...
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      03-20-2020, 12:20 AM   #10
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Quote:
Originally Posted by chassis View Post
Once the virus haze clears I see a strong economic rebound.
Not that straightforward IMO. You have entire industries (travel, media, retail) essentially bleeding dry right now. Once the haze clears, those companies are still going to be broke and starving to make a rebound. Which has a major trickle effect on how many people they employee, salaries they pay, etc. and then that has a trickle effect on how many/what goods those employees buy, etc.

Plus all the people laid off during this (at record levels in many states) will take a while to recover. Sure, they are probably not the demographic buying BMWs but they do fuel the economy, which fuels the market, which then fuels the wallets of the folks buying BMWs

I don't think we'll see a return to 2019 economic levels for at least a full year if not more coming out of this...and we don't know when we'll be out of this for that clock to even start.
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      03-20-2020, 01:42 AM   #11
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Yeah, this isn’t one of those “normal” corrections. You’re dealing with a major disruption to supply (factories shut) along with a major dent in demand (recession, people defaulting on credit, loss of jobs). Will likely lean towards some deals, given the reduction in demand is due to be larger, but it could be regional as people flee the safety of investments with little earnings/returns into something tangible they’ve been eyeing (not as an investment - cars are horrible investments). But if the timing of this that happens to coincide with shortage in supply, won’t be as generous. Overall, I think deals will be had, but the magnitude of the thing has tossed a lot of wisdom out of the window
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      03-20-2020, 08:21 AM   #12
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Saw on a Buick commercial yesterday that they will delay payments for up to 6 months so you can buy one of their shitty cars lol
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      03-20-2020, 08:28 AM   #13
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Quote:
Originally Posted by Gdiddy23 View Post
Saw on a Buick commercial yesterday that they will delay payments for up to 6 months so you can buy one of their shitty cars lol
LOL
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      03-20-2020, 08:30 AM   #14
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Quote:
Originally Posted by chassis View Post
I see upward pressure in new car prices, because the supply is restricted due to factory closures. New car purchases are often driven by necessity. Purchases can be postponed, but if someone has a car they are not willing to invest repair dollars into, they will buy a new vehicle.

As dealer inventory shrinks because of production stoppages, I see prices going up. Transaction volume may shrink, but dealers know how to do one thing very well. Make money.

Prior to the virus, the consumer was very healthy - employed, high savings, low debt. Once the virus haze clears I see a strong economic rebound.
It's not a necessity. New cars sales were down before the virus.
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      03-20-2020, 09:28 AM   #15
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This is very hopeful. For cars to be getting significant discounts, things would have to be very bad for a long time, basically in such a way that dealers needed to get rid of the inventory, but really, that's the last thing they'd do, because it means losing more money. They'd fire most employees first, save what $$$ they can, go to a bare-bones operation, etc. If that all happened, we'd be in some pretty bad turmoil overall IMO. What businesses try to do is minimize their losses, shut down production, furlough/fire, etc., so again, the last thing they want to do is sell a bunch of stuff at a huge loss. If the situation gets dire enough, sure, but it's going to have to get pretty dire...that may mean you are paying $15/gal for gas or $15/bottle of milk...
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      03-24-2020, 09:34 AM   #16
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Quote:
Originally Posted by aerostar View Post
Will there be crazy deals to look forward to in April?
probably not. With no manufacturing the dealers are supply limited. Once they sell a car there isn't a new one coming.

Second, ignoring that, used cars are about to jump in value since in times of economic uncertainty new car purchases are avoided altogether due to the financial burden causing a strain on the used market supply.

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      03-24-2020, 09:51 AM   #17
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You guys are incredibly optimistic. it's going to take a solid 3 to 5 years to get back to where we were.
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      03-24-2020, 10:12 AM   #18
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If you have either a secure job or the cash there will be good deals. If you also need to trade in your existing car or sell it some of the "good deals" will be lost as the used car market will also take a hit.

At the same time getting 10% off a new BMW doesn't make it a good financial decision and some of the savings will be lost as the value of what you have also took a hit as you drove off the lot (the slightly used BMW won't be worth what it was 6 months ago for the new buyer).
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      03-24-2020, 11:46 AM   #19
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I agree with a lot of what is being said. For me the important point is the tightness of supply vs demand. Supply has been restricted by production shutdowns. Demand is less (maybe) because of the virus.

My feeling is the net effect will not change tightness much. Price is highly correlated with tightness, not absolute levels of supply or demand.

If one person needs one light bulb, and only one person is selling the only light bulb available, the price for the transaction will be high, all else being equal. What happens if two people each need to buy one light bulb, and the availability of light bulbs remains just one lonely light bulb?

I have a similar view on residential real estate and home construction. Supply and demand are tight across the country.
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      03-24-2020, 05:14 PM   #20
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Quote:
Originally Posted by Alfisti View Post
You guys are incredibly optimistic. it's going to take a solid 3 to 5 years to get back to where we were.
yeah some people don't realize what is happening right now. Hospitality and air travel industries are getting annihilated not to mention US oil and Gas industry was already on life support before this thing started... this is a perfect storm. Best case scenario it'll be a mild recession or hard market correction. I'd not buy a car anytime soon.
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      03-24-2020, 10:57 PM   #21
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I thank God everyday my M4 is paid off with low miles and four years still left on the extended warranty.

I love the car, and going into what is most likely a global depression if worse comes to worst I can just live in the damned thing.

No more autos for me for a looooooong time.
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      03-24-2020, 11:43 PM   #22
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Quote:
Originally Posted by NickyC View Post
I thank God everyday my M4 is paid off with low miles and four years still left on the extended warranty.

I love the car, and going into what is most likely a global depression if worse comes to worst I can just live in the damned thing.

No more autos for me for a looooooong time.
Yup, no risk of my F80 gettin’ repo’d either. Of our 3 cars, only the X3M has a payment and with interest rates and the market what it is, may end up paying it off too.
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