Home » Why May Could End Up Being The Right Time To Buy A New Car

Why May Could End Up Being The Right Time To Buy A New Car

May Car Tmd
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While I’m still fairly bullish on the 2024 car market, the general sense I’m getting is that April might not be a blowout for dealerships. That might be a good thing for consumers come May — at least, I will make an argument and you can tell me if you agree.

The Morning Dump will also contain some arguments from conservative governors in the American South who are against the rise of unionization and seem concerned about a vote at Volkswagen’s plant in Tennessee this week.

Vidframe Min Top
Vidframe Min Bottom

Ford is recalling Bronco Sports, again. In fact, there are two simultaneous Ford Bronco Sport recalls. One is slightly amusing and one is slightly terrifying.

And, finally, Elon Musk is asking for the pay bump he was denied by a judge. This is more of the typical Elon Musk behavior we’re used to and it’s a little off-putting, but Tesla is important and it’s important we aren’t blinded to that because its CEO is a dingus.

April May Not Be The Month Dealers Wanted

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It’s a truism, but one that generally holds, that if you’re getting a refund you tend to file your taxes a little early, which means you get your refund early, which means dealers are often happy to see you walk in the door in March and early April.

There’s evidence to suggest that the April Bump was a bit more subdued than in the past and that higher interest rates are keeping prices higher. Let’s start with interest rates. I covered a lot of it last week, and CarDealershipGuy does a good job of explaining what it means in the tweet above, with the conclusion below:

Historically high interest rates threaten average monthly payments. With rate cuts nowhere in sight and rising inflation, interest rates on car loans are likely to keep increasing.

That’s all pretty much in line with the general vibe and makes sense.

Here’s a super fun graphic from Cox Automotive’s weekly market report:

Tax refund season
Source: Cox Automotive

As you can see, most of the refunds have been given out and, while the average refund is a little higher, those have mostly worked their way through the system (week 14 was the first week of April), meaning the wave has crested.

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Combine that with this:

  • Leads are up y/y so far in April on Autotrader but down on Kelley Blue Book, and leadsare up for the month compared to March on Autotrader

  • Unique leads per dealer are down y/y in April for new and used vehicles, and new andused leads are down for the month compared to March on websites hosted byDealer.com

This is all to say that sales will probably be up year-over-year in April, but with consumer sentiment in decline, gas prices rising a bit, and a likely muted boost from tax refunds it’s likely a big chunk of consumers are sitting on the sidelines (I’m one of them).

Somewhat counterintuitively, this might be a reason why you (or I) should consider buying a car in May. New car supply, according to Cox, is 18 days higher year-over-year, and while it’s stabilized. that’s still a decent number of cars on the lot for this time of year.

If you can wait until the end of the month I think Memorial Day weekend could prove a great time to get a decent deal on a new car, depending on what that car is. The trick to scoring a good deal is to find an automaker (like Volkswagen, Nissan, or Mazda) that is willing to cut you a good financing deal.

Union Vote Is Existential For Southern Governors

Uaw Striking Workers
Photo: UAW

Right now and for the next couple of days, Volkswagen workers at the company’s Chattanooga plant will be deciding if they want to join the United Auto Workers union. This is the third time the UAW has attempted this in the last ten years and, given the union’s recent success, the one most likely to succeed.

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From Reuters:

Kelcey Smith, who joined a union organizing committee after being hired about a year ago, said the union’s deals following a six-week strike against the Detroit automakers inspired him. The UAW won record contracts, including double-digit pay increases and the return of cost-of-living adjustments.

Smith wants some of those perks himself.
“It showed not only me, but the rest of the country and the world, that if you just come together as a collective group, you can bring change for yourself and your families,” he said.
Not everyone agrees with this and, specifically, the conservative governors of the states that are being targeted think it’s a bad idea. The Associated Press has a good roundup of their collective thoughts:
The governors, all Republicans, said in a statement Tuesday that they have worked to bring good-paying jobs to their states.

“We are seeing in the fallout of the Detroit Three strike with those automakers rethinking investments and cutting jobs,” the statement said. “Putting businesses in our states in that position is the last thing we want to do.”

[…]
The governors said they want to continue to grow manufacturing in their states, but a successful union drive will “stop this growth in its tracks, to the detriment of American workers.”
Not to contradict any of these elected officials, but many of the investment changes and job cuts likely have as much to do with the electrification push as the union vote. It’ll take time to see how much the impact of the UAW contracts lands on price increases for consumers and how much lands on job cuts.
I don’t think the governors are entirely wrong, however. Automakers didn’t move plants primarily to states like Georgia or Alabama for access to ports or suppliers or proximity to Branson. The anti-union posture of the states (all of the states mentioned in the article are so-called right-to-work states), almost certainly played a role in the decision-making coupled with big incentives from governments.
While I don’t agree that this growth will be to “the detriment of American workers” it does raise some risk for workers south of the Mason-Dixon Line. Many of these states have gotten nicer and the standard of living has improved, thanks in part to the investment in tax incentives by these state governments that brought these companies. If it turns out that plants in these states can also be easily unionized then, well, maybe it’s better to just go back to the Rust Belt?
It’s too early to know what’ll happen, of course.

Bronco Sports Gets Bronco II Recalls

Bronco Hood Scoop

Here’s a fun one. Ford is having to recall 456,565 Bronco Sports and Ford Mavericks over a battery issue that might cause all sorts of bad things to happen.

From NHTSA:

An insufficient calibration strategy for detecting sudden battery degradations
during a drive cycle can lead to (a) a vehicle that is unable to restart after an
auto start/stop event or (b) experience a stall while coming to a stop at low
speed. Either may be accompanied by a loss of 12-volt accessories, including
hazard lights.

So not only might your Bronco Sport or Maverick crap out on you, but it might also kill the hazard lights! The good news is that there seems to be a relatively easy fix as only the calibration software in the BCM and the PCM need to get updated.

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Here’s a weirder one, via Ford Authority:

The defect: in affected vehicles, the hood scoop may detach from the hood.

The hazards: a hood scoop that detaches while driving can damage the windshield or become a road hazard, increasing the risk of a crash.

Ford will give you a refund for the hood scoop which, if I’m being honest, is kind of a trash accessory. You don’t need a hood scoop on a Bronco Sport. Sorry to offend!

The Elon Musk Of It All

221026151430 Elon Musk Entering Twitter Hq 1026 Screenshot
Screenshot: CNN

Tesla CEO Elon Musk probably doesn’t care what I think, which is good because I’m one of those people who loved the old Twitter and knows enough about Musk to not be amused by his antics.

For instance, a Delaware court ruled that Musk was granted the biggest paycheck in human history under unfair and uncompetitive circumstances. Musk’s response was to pick up his ball and go home (specifically, to legally establish his company in LLC). Tesla’s board still wants to give Musk this money, so the move and the pay will come up for a vote by shareholders.

All of this is kind of annoying and it’s hard not to be turned off by Musk (though some people seem to like his schtick).

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Journalist Noah Smith challenges that feeling, however, in a post about why China is beating Tesla and what it means for the rest of us:

Elon Musk’s detractors are prone to schadenfreude, viewing Tesla’s decline as karmic punishment for letting the antisemites and Russian propagandists back onto Twitter. But I think this reaction is shortsighted. To see a champion of U.S. industry and innovation go down to fast-following Chinese rivals shouldn’t make any American happy. And the same techniques that China is using to defeat Tesla will be used to defeat any other American competitor.

Ok, fair.

What I’m Listening To While Writing TMD

Since my daughter worried about me listening to too much sad dad music, here’s something a little different. I’m a big Mitski fan and, while I wouldn’t call the music happy, there’s a kind of pleasant yearning to it.

The Big Question

Have you become a member yet and supported this fine institution? Just FYI, a Cloth Annual membership normally costs $70, which is $5.83 a month, but we’ve got a discount going, and if you click this link to sign up and use code: mustang2yearanniversary it’s just $56, or 20% off, which is only $4.67 a month. Also, if you really want to see David buy an Aztek, live in it, and write about it, you could also just spend $7 on a Cloth Monthly membership one time. If you love The Morning Dump please consider it, we are really close to our goal. [Ed Note: I want an Aztek, but do I want to live in it? I’m not sure. -DT]

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Amschroeder5
Amschroeder5
1 month ago

If human nature wasnt inherently prone to abuse, and companies inherently attempting to concentrate the most weath in the least pockets (a fundamental trusism of profitability), unions wouldn’t need to exist.

Unions are not perfect. Often are not even particularly good. But the history of labor shows extremely conclusively that companies are not in the buisness of valuing their employees appropriate to their real contributions. Inevitably some push back is required, and unions are amongst the most effective historic ways to provide that, short of federal direct action. It takes a very blind reading of history to suggest anything else, or that without organized labor, all major companies would simply do better.

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