Happy 5th of July, America! For those of you unlucky enough to live elsewhere, please excuse us for choosing to incinerate small portions of our great land instead of, you know, blogging yesterday. But it’s ok, we’ve got some great news, America’s Strategic Jeep Renegade Supply is coming back down to normal. Hooray!
We’re getting sales reports in from various places and so I thought it would be a good time to review where the car market stands. Things appear to improving for consumers, with inventory going up, but it’s going to depend dramatically on what cars you want. Plus, bad times for startup EV automakers continue.
Now Seems Like A Great Time To Buy A Jeep
Stellantis (the artist formerly known as Fiat Chrysler) reported quarterly U.S. sales up by 6% year-over-year in the second quarter, with Dodge up 37% (thanks, Hornet!). Here are some of the highlights:
“We saw increased demand this quarter as market conditions continue to improve and our dealer network makes the necessary adjustments to drive sales growth across our brand portfolios,” said U.S. Head of Sales Jeff Kommor. “The Jeep® Wrangler 4xe recorded its best quarter to date and retains its ranking as the best-selling plug-in hybrid in the U.S., with the Grand Cherokee 4xe at No. 2 and the Chrysler Pacifica Hybrid at No. 4.”
The company is building basically zero electric cars in the United States at the moment but sells three out of the four most popular plug-in hybrids. And the deals are good.
Check that invoice out above. That’s a brand new $62,000 Wrangler 4XE, on lease, for no money down and a $460 a month payment (thanks in part to federal EV credits). That’s a good deal. I wrote last week that you shouldn’t expect car prices everywhere to suddenly implode, with the caveat that certain automakers with inventory will have better offers as the summer selling season begins.
Jeep is clearly one of those brands. I previously wrote about the huge supply of Renegade crossovers on dealer lots, which reflected both the stable production of the vehicle and the general lack of desirability. That number, which came from online car sales assistance service Car Edge, takes the amount of Renegades they find for sale and the total sold in the last 45 days and determines supply.
Would you believe there are more Jeep Renegades for sale? The good news, for Jeep at least, is that sales more than doubled recently, which means the supply is down. How’d they do that? Car Edge CEO Zach Shefska said they’ve seen “lots of support to get them moving” with dealer discounts up to 9% off of MSRP on the Renegade. They’ve also seen a $4,500 in capitalized cost reduction (i.e. an upfront discount) on a lease of one through lender Ally Financial.
But here’s the flipside of this:
There’s plenty of stuff that’s still in high demand and low supply. The Kia Telluride is one of those vehicles I feel like everyone owns but no one can buy. There are a lot of CR-Vs on the market but, guess what, everyone wants CR-Vs. And the Maverick? Ugh. Amazingly, this is an improvement for the little Ford truck we dearly love. Remember, folks, there’s no new normal in the car market.
Car Sales Are Up Almost Everywhere
Fleet sales are back. Inventory is (slowly) coming back. Interest rates are up, but people clearly want to get back into the market and seem to be able to stomach them. What does this mean? Carmakers are starting to report big sales.
The year-over-year monthly sales, in particular, are absurd:
Acura: +83.3%
Honda: +54.0%
Genesis: +33.2%
Mazda: +96.9%
Those are some random brands, but it shows that things are improving when Mazda is up big. On a quarterly basis, even brands like Infiniti are seeing increases (56.5% quarter-over-quarter).
The only brands that aren’t selling that have reported quarterly sales are ones like Jeep (-2.9%), Alfa (-25.0%), and Fiat (-42.2%). In a way, it’s kind of amazing people are buying Fiats at all.
It’s Not A Great Time To Be An EV Startup
Patrick has a great post from earlier this year asking: Who will survive the EV Startup Wars? There was a bleak report from Reuters on Monday that walks through the reasons why both British vanmaker Arrival SA and American truckmaker Nikola Corp might not make it to the next round.
Arrival, first:
Arrival had in April bet that the second reverse merger would release $283 million of cash held in trust before redemptions. In early 2021, the company had merged with CIIG Merger Corp.
The EV startup in May reported a 37% slump in cash and cash equivalent at the end of the first three months of the year, from the preceding quarter.
The startup warned in November it would run out of cash before the end of 2023. The company has cut staff almost 75% to 750 employees in a bid to conserve cash.
Not great, though the company still has 10,000 orders from UPS. What about Nikola? It’s in the process of liquidating the assets of Romeo Power, the EV battery maker it just bought. And those companies are not alone, resident bleeding heart Patrick George has a piece on the Lordstown troubles in The New Republic:
These issues weren’t helped by the fact that the Endurance itself was riddled with production problems. The vehicle was theoretically aimed at commercial work-truck buyers, but its value proposition became even more unclear as more electric trucks from real car companies like Ford and GM started entering the market. And commercial or not, it always seemed to lack the hype and engineering cachet of other E.V. newcomers. Its range of just 174 miles put it in the bottom tier of modern E.V.s, and critics balked at its $65,000 price tag. The savior of Ohio’s automotive sector just didn’t seem all that up to the job.
I drove by the Foxconn/Lordstown facility this week en route to Chicago and it didn’t seem like a particularly active place.
Ex-Employees Call VinFast’s Vehicle Development ‘Frightening’
If you’re going to read one thing from Britain today, read Alex Goy’s review of the 2024 Aston Martin DB12. If you read two things today, read this deep dive from The Financial Times about VinFast. Obviously, we tried the company’s debut U.S. model and it broke during the test drive, so our expectations are low. But multiple former VinFast folks say speed is taking priority over anything else, and that’s why we’re seeing the issues we are.
Most of the FT piece delves into CEO Le Thi Thu Thuy’s plan for VinFast and the company’s dramatic shift into electric vehicles. It talks about the company’s challenges in launching an IPO in a difficult overall capital market.
The reporters also talked to three former employees, and, well:
Three former employees who worked in product testing, engineering or homologation on an earlier model said they saw instances of what they considered to be insufficient safety or durability testing to shave time from a vehicle’s development. Another former employee, who has worked at a number of carmakers, said the speed of vehicle development was “frightening”.
VinFast denies the allegations, but it conforms with most of the experiences reviewers seem to have had with the vehicles.
Your Turn
We know a lot of you have said you’re holding off on a new car purchase for now, and we certainly can’t blame you given how weird and expensive this market is. What would it take to change your mind and get back into the market like all those happy Acura buyers?
I test drove a Renegade once, shortly after it first came out, at a dealership in Glendale (CA) where the salesdrone swore repeatedly that it was in absolutely no way related to the Fiat 500X. I wasn’t even pressing him on it… I just mentioned it once like an attorney stipulating to something in court. But clearly, it struck a nerve.
You know what? It wasn’t awful. Yah, the inside was plasticky in that unimpressive cheap Jeep way, and it’s not exactly a looker, and I wasn’t thrilled about the drivetrain choices, but you know… it wasn’t all that objectionable given its price (this was a number of years before the pandemic, so it was pretty cheap at the time).
Out of idle curiosity, I just popped over to the Renegade site where I learn that a base, plain-Jane Renegade with only a single option of yellow paint for $495. MSRPs for over $33K. Which is, of course and by any reasonable definition, patently absurd. The car doesn’t seem to have changed (i.e.: improved) at all from when I first drove it years ago. A 1.3L Multiair and that so-so 9 speed. $33K for that? Oy, gevalt!
Adding insult to injury, I note that any color other than white adds $495. to the price. And it’s not like any of those five extra-cost colors are actually good or even just interesting.
Of course, with a year+ surplus of these on dealer lots, I assume that it’s one of the select few cars routinely available for LESS than MSRP. But how much less?
I don’t WANT one really, though I could and would daily almost any working small trucklet, even though I’d rather dip my toe in the EV waters by now. So, I think to myself: how cheap would a new base Renegade have to be for me to actually write a check to a local dealer and drive one home?
The number I come up with is about $18,500. That’s the most I think I could/would/should actually pay for a base Renegade given my personal priorities/preferences/preconceptions. And I don’t think any Jeep dealer is THAT desperate to move Renegades off the lot that they’d do anything other than escort me from the showroom for making such an offer.
Let me just add: I’d happily pay more were the Renegade available with the Tonale’s plug-in hybrid drivetrain, or a manual transmission, or if it were just a better, more appealing car in general. Or if it could be had in some nice, non-metallic, decent shade of green.
But that’s not the universe we inhabit. 🙁
I’m going to help everyone that wants to buy a Renegade by not buying one.
You’re welcome.
We spent Monday looking at minivans and will probably pull the trigger soon. Got another kid on the way and just need the space. It’s not great out there, but it’s better than it was. MSRP for the kia and honda, with Toyota wanting $2k over. No thanks. You could probably get a deal on Chrysler but I’m not risking an unreliable car.
Never did I think I’d be considering paying sticker for a Kia, but that’s just the world we live in.
TBH list prices still up at least 20% compared to when I was last shopping in later 2020. That’s ignoring both the regular incentives that used to occur and the additional markups dealers expect now. I don’t have too much love for the Subaru but it’s got at least another 100k in it, and I’ll drive my truck till the wheels fall off, fix it, then keep going until some teenager totals it. The only way I voluntarily buy another car is if/when gas becomes untenable, or prices drop massively.
I’m not playing this bullshit game with rich automakers and entitled car dealers. The money that would have bought a new car will go into an investment account, and next time the market falls I’ll put 10k into a c5 or TJ. I promise it’ll be more fun than any new daily I’d buy.
Before you buy a new $50k car, ask yourself if it’s really worth $35k over a lightly used Corolla (add another $9k in interest you put that $35k on a six year loan). Then go play with a compound interest calculator, and see what that money would be worth in 10-20 years (or god forbid, buy a house-that’s more than I took to close on my $500k house). If you’re well off and settled then absolutely, buy that Acura. But I don’t think most are.
Flush: I need a job. 🙁 No job, no gently used Cayenne. Them’s the rules. It’ll be a while before I have enough saved up to comfortably get a parsh to tow my parsh, too, so who knows when it’ll happen.
I don’t think I’ll look at new ones in 4325 or whenever a job happens. THEY DISCONTINUED MAHOGANY METALLIC! Porsche, what are you doing?!?!! Also, I’mma let someone else get the initial depreciation hit. I trust a previous Porsche owner way more than the previous owners of lots of other cars. Aiming for that sweet spot of “Grandpa’s car with lots of good records.”
It would’ve taken GM to quit doing rug-pulls on me. I was already to buy a Bolt once the tax credits were announced, but I couldn’t find one locally at MSRP, and then they announced they were ditching them anyway.
That was alright, since I really liked the looks of the new EV Equinox coming out for $30K before tax credits. Oh, hello there EV Silverado! What’s that, GM jacked up your price before the release date? Ya think they could do the same with the EV Equinox? Fine, I’m spending my down payment cash on a 23-year old Jaguar XK8 convertible.
And that’s exactly what I did.
Pretty sure that staggering discount of 9% on a Renegade would bite you really hard on the posterior when it’s time sell or trade. I will admit they do seem to be pretty popular, but I have no idea why, other than it’s a really great tail light design in search of a great car.
I’m with you. The back (and the front for that matter) look pretty good – it’s the side view that ruins it for me.
That and the fact that it’s a Fiat underneath
I should be in the market for a new high end car, but a few things are in my way, including waiting for my new driving habits to stabilize – I had been driving 20k+ miles a year but since the pandemic I have been more like 8k – but it is now creeping up again (and would go up a lot if I had a new car to choose from – funny how that goes- when I leased a car for the first time the most miles I had put on a car in 10 years was 14k only to drive the E39 5-series I leased more than 21k the first year). The other, bigger problem is finding something that I like – I really want a modern version of my E39 or maybe a little sportier like the E46 3-series, but nothing seems to drive like those cars /fit me as well. For some reason the current 3-series feel too small for my ridiculously tall body, and the X-5, which I do fit in better drives like a big box on wheels (come on BMW – the steering is now all software can’t you program the damn thing to be fun to drive??!!) Maybe an X6 would be better – or maybe the M-lite 5-Series (this would be a daily driver /road trip car so I don’t want to be driving a M5 for hours on our pothole filled Northeast roads with the M5’s overly stiff suspension). Finally better dealers matter – my local Cadillac dealer (CT-5V -not Blackwing due to its terrible mpg) has always been tough to get a deal with, and now seems like they are even worse based on the amount of non-turning inventory they have sitting on the lot, the more distant Cadillac dealers likewise seem tough to deal with (the good ones seem to have been wiped out in the 2008 dealer shrinkage), and based on all the chatter I hear almost all the dealers are kinda terrible – except for our local Mazda dealer – so I have no desire to go kick tires.
I was about to order a 2024 Maverick, until they released the new price, $4000 more than the old price. Now a basic hybrid Maverick starts at $27 000. That’s not terrible I suppose but the value isn’t there anymore.
So, no new car for me. I’ll wait in hope for the Toyota Stout, though of course it will doubtless also be a limited small batch artisanal release not in general available to the public..
Unfortunately, the new vehicle market and the average worker parted company a long time ago. I mean, Elvis Has Left The Building, man.
And until the dealerships realize that their COVID19 gravy train is at an end, I don’t see any real need to encourage them. Let them keep their product.
I don’t NEED a new car at all. So even if I’d really LIKE a new manual electric blue Nissan Z, I’ll be effing damned before I give anybody markup over list on one. These are standard production cars. They need to quit acting like every econobox and bog standard Jeep is a finely crafted Stradivarius, for which the buyer must beg and plead, and offer fist-fulls of excess cash.
Just stop it already.
My 2019 Ram was my first new vehicle in my entire life . It stickered at 58 ish and it’s paid off. Mrs. Pliney has a 2017 Subaru Legacy, also paid off. To get an equivalent deal on either of these new ( the Soobie was a demo w / 5k miles ) doesn’t look doable in this current market so it’s ride or die for us for the foreseeable future …
Regarding the Jeep Renegade… The problem is Stellantis still has a COVID-era MSRP on it… and stealerships are still under the delusion that they can slap $5000 markups on them like this jackass-dealer did:
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=687216359
I specc’d out that same Renegade on Jeep.com and the price comes to about $36,500. So where do those fuckers get off charging over $41K for a $36K vehicle?
Stellantis, Jeep and their dealers need to get plugged into reality.
Or they can go fuck themselves and hang onto their overpriced product.
If you could actually get a 20K ford maverick Hybrid without plopping money down, waiting and then waiting, and then waiting, and then finally getting a notice that the order is cancelled, please try again at 25K. I could see the appeal. 4 doors, far roomier interior over a Focus or even the old fusion. 42 MPG…..lots of recalls already…..but still what new vehicle offers the same at that price point, and also includes a massive open trunk with enough space to maybe get the big screen at wally world home without calling the guy you know with a real truck?
Exactly on point.
“What would it take to change your mind about getting a new car and get back into the market?”
For me, it would require some sort of a meaningful return to reasonable interest rates in combination with improved availability of lower-spec options. My wife and I are lucky enough to have a stable careers and a household income hovering around $200k, in northeast OK where the cost of living is considerably lower than other parts of the country. That said, we have two small children and one starting college in the fall, so we’re not exactly awash in disposable income. We currently have a 2019 VW Alltrack that we purchased almost new in June of ’20, right before COVID really started affecting the market, with a 2.75%APR.
As a true “enthusiast,” I’ve always been content to rattle around in assorted vintage vehicles (aircooled VWs, knackered Volvos, an MGB, etc.), and my daily for the last 4.5 years was a 2003 Suburban that I bought for $1200 back when you could still do that sort of thing. I slowly brought it up to snuff over the course of my stewardship, and it served us unflinchingly as our family roadtrip vehicle and tow pig. I only elected to sell it as, at 230k miles, it was nearing the vector of “either dump some more money into it, or sell it while it’s still worth something.”
If you’ve ever owned a Suburban, you can probably relate to the fact that once you’ve tasted of its space and general capability, it’s very difficult to go without. And so I started shopping for a suitable replacement, which got depressing very quickly. There’s absolutely zero chance I was going to sign the dotted line for the $75k minimum and ~6.5%APR required for a new one off the lot, nor could I justify dropping $30k on examples with well over 100k on the clock. Especially when you factor in the general decline in reliability at the drivetrains have become more complex (active fuel management, fragile nine-speed transmissions, etc. etc.) since the 2007 examples debuted. Sure, new-car warranty is nice, but it does little to soften the blow when your family is waiting for a tow truck in the middle of a summer vacation roadtrip. All this to say, I just couldn’t stomach it.
And so I found myself once again in the market for a 2003-2006 (GMT800) example, but with low enough miles that I could feasibly expect to drive it for several more years. These were trucks that built to be driven and used, and nearly 20 years since the last was built, most have been completely used up. The sheer number of them still on the market is a testament to their durability, but as the saying goes, they’ll run poorly for longer than many vehicles will run at all. That means there’s a lot of clapped-out garbage market, and anything worth buying is snapped up pretty much immediately.
So when a 2005 Escalade Platinum ESV with 89k(!) original miles popped up at small dealer a couple hours away, I knew I’d better get there with cash straight away. I’ve never been an Escalade guy at all, but this one had served corporate duty early on, and was configured with a blacked-out grille and de-chromed flanks. The interior was nearly mint as well, and it was all riding on a fresh set of Michelins. The dealer was friendly, no-pressure, and absolutely unwilling to budge a single dime on the asking price. And that’s how I found myself dropping $14k on an 18-year-old GM product that might’ve cost me half as much three years ago, and was glad to do it. With this truck, at least I know the major systems are robust, user-serviceable, and cheap to repair. And I didn’t have to take out a second mortgage to make it happen.
But the current interest rates are about 6%, the average rate over the last 50yrs is 5.5%. So they are already kinda reasonable.
I get that too. Still a hard pill to swallow after so many years of sub-3% rates. And even with an excellent credit score, the best rate I could find around here was 6.49!
I’m hoping GMC moves some of the truck finance rates over to the yukons. You are right about the pricing, it hurts but for the size there aren’t many good options, and most aren’t any cheaper.
In this market you’ve gotta call that ” well bought .”
Nothings gonna get me to buy new anymore, however my son will be looking for a car as a new college Grad, and moving to MN in the fall. I’m thinking he needs a AWD Rav4 or Pilot (used of course) but we might use this list to investigate some deals on a new Vehicle for him.
That Nikola Motors pic looks like a scale model. So incredibly fake.