OT: Talking Cars Tuesday: Open Floor

Submitted by Michigan Arrogance on August 22nd, 2023 at 7:56 AM

Last week of OT, so I thought returning to TCT would be fitting. I wasn't going to have a specific topic but maybe a finance spin can provide a starting point.

  • Are you looking now? Purpose/plan of attack for the search?
  • With rates being sky high, has that affected your purchase plans?
    • Considering a lease? Shorter/longer term? Pulling more cash for the down payment?
  • Has work from home (WFH) or return to office (RTO) affected your purchase plans?
  • Pending UAW strike in Sept (I think the vote to auth. strike is this week?) - how does that affect your timeline for purchase?

 

 

Wally Llama

August 22nd, 2023 at 1:03 PM ^

Not looking here. I drive a 2011 Volvo S60 T6 AWD with 115k miles, which is great for Michigan winters and, most importantly to me, isn't an SUV. I'm split between WFH and in-the-office, so hoping it'll still last years. Paid cash for it in 2018.

We just got my wife a new-to-her car - 2020 Palisade EX - and just sold her previous car, a 2012 Sorento. I was pleasantly surprised to get 9500 out of it - the used SUV market still seems pretty hot right now.

I work in the auto industry for a Tier 1 supplier, so the threat of a strike is worrying for our whole company. Fortunately we're diversified in our customer base, but if the UAW really hits all 3 US OEMs, any work stoppage will impact our company's bottom line directly and will be difficult to recover within this calendar year.

Some of the UAW's demands seem unbelievable to me. (Any time you ask for a shorter work week than the French....) Maybe some of the bigger demands are just things to negotiate away so they can protect what they really want, but with the chest-thumping and posturing and getting the troops all riled up, it seems that giving in on some demands would result in a loss of credibility, both with the OEMs and with UAW membership. On the other side, holding the line through a prolonged strike will push some customers away from the US OEMs to foreign, non-union brands, reinforcing a trend that has run for decades. History shows that the US OEMs struggle to get those customers back, which is also counter to the UAW's goals. Here's to hoping the UAW hasn't backed themselves into a corner....

KO Stradivarius

August 22nd, 2023 at 1:59 PM ^

You're exactly right.  Furthermore, the Big 3 already pay higher hourly labor costs than the non-union OEMs do.  So this will just widen that gap and hamper their ability to compete on EVs with those companies and the startups, which is already challenging due to legacy costs and the difficult transition from an ICE vehicle mindset.

I'm afraid we're in for a long strike, and a local recession in Michigan. 

https://gmauthority.com/blog/2023/08/uaw-demands-would-add-80-billion-to-gms-labor-costs/

The sources claimed that meeting all the demands of the UAW would raise labor costs for the Big Three to $150 per hour versus the $64 per hour currently incurred. For comparison, labor costs at non-unionized automakers such as Toyota amount to $55 per hour, while Tesla’s outlay for labor at its EV plants is between $45 and $50 hourly.

 

Wolverine In Exile

August 22nd, 2023 at 1:20 PM ^

Right in the middle of this now. Have a Ford Transit Connect, transmission blew out about 10k miles past warranty. Third Ford product in a row that we've had a major issue like this on (Transit Connect transmission, Explorer engine cylinder failure, Escape engine issue), so we're now looking for the first time in my life at non legacy Big 3 autos, specifically Kia because the extended warranty compared to others especially at the price point. The couple models we're looking at (Telluride & Carnival) are at least assembled in the US, so my heart calms down a little, but I'm still a Michigan guy from a near 100-yr Big 3 autoworking family, and I'm not getting any grief from my relatives about my potential purchase.

Started looking at lease vs buy calculator again and the mileage we put on cars  (I commute 20 miles each way from outside Ann Arbor into Ann Arbor + work road trips to Ohio & occasionally DC + multiple Up North trips each year to see in-laws + youth hockey travel) just makes the "affordable" leases non-affordable for us when you start putting on the mileage add-ons. So we're looking at buying with a trade-in, bigger cash down payment than usual, and probably going with credit union financing since that's cutting about 2% APR off the financing offered by Kia directly. Strike doesn't affect me-- biggest effect is that overall inventories are still down meaning there's less flexibility in price negotiations and less options in looking at year-end / previous model year deals. 

Wolverine In Exile

August 22nd, 2023 at 1:24 PM ^

Secondary impact on higher rates for me is that my 2000 Jeep XJ I bought a couple years ago with the intention of turning it into a new Ford Maverick or Bronco Sport this year has evaporated. Corporate bonus check expected to be much smaller this year, and increased health care and life costs are sucking what was my new car fund build-up. I'm now driving the Jeep for as long as I can and trying to stretch it into a first car for my eldest daughter (2 years away). 

JBLPSYCHED

August 22nd, 2023 at 8:38 PM ^

FWIW we are loyal Kia owners, we're on our second Sedona van and we bought a Niro EV that we also love. The vans have both lasted 10+ years with the second one at 140K miles with minimal issues. I'm from Detroit/Ann Arbor myself, although not from an autoworker family so I don't have the loyalty issues. But given that you are seriously considering a Kia I thought I'd write in to give them a thumbs up.

As for low inventory and minimal room for negotiation, have you looked out of state to see if you can find what you want? In my experience if you're willing to travel you can often negotiate a good deal, and if you stay in touch with your local dealer and let them know about your out of state best price they might match it at the 11th hour to keep the sale. Good luck!

MGlobules

August 22nd, 2023 at 7:21 PM ^

I have a '15 Outback that we got the year our kid studied American history, paying 2/3 of the total in cash, so that we could tour the country and hit the parks. We had a manual Civic we had driven to almost 300,000 miles and still loved, and even though we laughed at ourselves over the image we thought we were projecting, we came to love the Subaru, too. Now my wife is approaching retirement (I'm semi-retired, freelance write, adjunct teach every other summer), and we have this dream of driving the east coast, across Canada, down the West Coast to Tierra del Fuego on the Pan American highway, idea we have long nurtured. I think we'll replace the Subaru after that, but that's still in five years. Nothing wrong with the car, it drives fine, is covered in stickers from our travels, including in a lot of rented cars in Europe, where we have driven all over (England, Ireland, Portugal, Spain, France, Austria, Switzerland, Germany, and Denmark). I'm already working out how to get a bed in the back of the Subaru and to get enough stuff on top and tucked in that we will be able to do a lot of camping en route. (Also trying to get my entire record and CD collection on hard drives so that we can luxuriate in our music as we go.)

The car I most wish I could buy would be a VW wagon with stick, but they don't make them here anymore. Maybe there will be some kind of people's electric car in five-six years (there is a crazy neat electric Civic in Japan), but if not we will probably just get a VW GTI, whatever car like that is available, even if it means we will die in it b c it's so low to the ground. My wife and I just like modest cars that are great to drive with sticks, and then I figure we'll have our micro-camping down to enough of a science that a smaller car will still work. 

In short, we are the weirdest kind of car nuts, maybe. But my dad worked for GMI, my uncle was a designer at Ford, and my other uncle was an organizer for the UAW, so I have cars in my blood. 

EDIT: Wanted to add after reading up and down the board here, that we bought my daughter her first car, a 2009 Prius with 85,000 miles three years ago for five grand, and the Toyota dealer just offered us five grand for it. No way would I sell it; that thing is essentially bullet proof, and cute AF. Everyone knows it's her when they see her coming. 

Kevin13

August 22nd, 2023 at 7:52 PM ^

Ordered a new car a little over a month ago. Was told it would take 7-10 months to get it   They are still saying I’m looking at that time frame now about 6 weeks in. I have three dealerships trying to get me the car. First one who gets it I’ll purchase from them.   Will use a trade in and then make up the rest with cash so I don’t have to finance 

Since85

August 23rd, 2023 at 7:35 AM ^

I want a play car...again.  Restored a 1965 Mustang, loved it!  Drove like it was made in '65.  Had an '11 Mustang convertible with the V6 and manual.  Really liked that one but I sold it.  I would probably buy another later model convertible with a V8 but with an automatic.  But I have been really considering the Lexus SC430.  Open top, nice cruiser and very comfortable for long rides and Lexus quality.  Anyone on here have an SC430 or wish to share an opinion?