Your dealership and order experience...

[mngopher]

I'm not saying there isn't demand...I'm sure there is! I'm one of the people who wants one and is willing to work to get one. That being said, I also know how many industries are operating right now while the prevailing narrative is that there are supply chain delays everywhere despite that not really being the case. Dealers are taking advantage of the fact that they can gouge and have an excuse that's been accepted by the population to be true. Meanwhile, the manufacturers are enabling it by restricting how much inventory they release at a given time with a given feature set in a given area. It's like I said...I can get certain features in northern Minnesota but can't get them elsewhere and vice-versa. I appreciate the advice on the Expedition vs. Yukon/Tahoe. Honestly, I swore I'd never buy another Ford after my last F-150. My favorite vehicle...but required 3 engines, a transmission, and differentials in 25,000 miles. It was the "bullet-proof" 5.0 too. To be honest, I wanted a 2023 Sequoia...and had their rear cargo area not been so embarrassing, I'd be buying one of those instead but when I saw the "cargo shelf" I put in our order for the Yukon, several months ago now. Still at square one...and that really bothers me especially since production numbers are actually up YoY and not down that much compared to non-pandemic years.

The truth is, we're up against a clock. There are a few things that we want to do in the next 3 years that we likely won't be able to do again. Our cross-country trips this summer and next are probably not going to happen unless I buy something soon. Unfortunately, that means I'll be buying what's out there and it's not Tahoes/Yukons. We're very much at the top of our budget on these vehicles as is and its sounding like to get what we want, we'll be priced out of these vehicles the next model year anyway (to be honest, I'm not sure how the market for these vehicles is so deep given our income distribution in this country). The other options seem more reasonably priced. Again...I know they may be inferior products but being inferior doesn't matter if you can't get the superior product because it doesn't exist.

I do plan on sticking around on the forum...I like these vehicles and even if I don't get one now, I do plan on trading up once reality kicks in again in the market. I appreciate everyone's perspective as well. Thank you for sharing your experiences.

 

[Stbentoak]

I think you underestimate how much actual cash many consumers are sitting on. Personal savings level is 5X what it was pre pandemic. Almost 5 TRILION dollars. I'd wager a pretty fair share pay cash for these vehicles and another pretty fair share aren't fazed by +5-10K over the sticker if they really want it.
Also, I don't think GM is restricting supply to create a "Shortage" situation. They are restricting options but building anything they can. They don't make any more or less, their price to each dealer is already pre-determined. They want them all delivered. The real issue is TRANSPORTATION. They can't get enough rail cars and truck transports to haul them. It will take months to wear this down if they even do.
Good luck on your cross-country trip. With fuel prices surging, I doubt if I could stomach dropping 150 a day in my tank to see the world's largest ball of yarn.
Rumor has it in our area that RV manufacturers are going to shed 50% of their work force on July 4th due to rapidly falling demand. No one wants to say it outwardly, but this high and going higher fuel is starting to take the fun out of "Recreational" travel, boating, road trips and the like. It can easily cost you 100$ + a week just to drive to work.....

 

[Chickensandwich]

I just wonder what people do for work that allows them to afford an $80k truck! That couldn’t ever get on my radar..and I’m sad. Maybe if I lived in a studio apartment I could swing it, but man….

 

[mngopher]

The truth is, most of that cash is in the hands of small business owners that took PPP and weren't really impacted (a large chunk of them), those that played the stock market well, etc. Your average family with 3+ kids, the people that I would think are wanting to buy these vehicles, aren't really dropping 80-100K on these vehicles...yet they're impossible to find. At least in our market, many of these vehicles are being bought and resold to take advantage of the used car premiums. That and one of the dealerships told me they've had more small business owner types buying 1-ton pickups with cash than any year before and once they take delivery, they're putting in their order for the next. Good for them that taxpayer money buys them a pickup and gets them a write-off but for the rest of us out there, we need to earn that money and any cash we have needs to be used judiciously. I'm not willing to throw away tens of thousands in market adjustments AND lost value. The idea that people are paying 10K over MSRP or more for new vehicles and used vehicles that are going to be worth half their value next year is frankly kinda nuts. I don't know anyone, many that make far more than I do, who make so much that they literally can toss 10-20K in the trash just to get into a truck sooner other than business owners or people who are buying/reselling/splitting the profit with the original dealer.

As for who can afford an 80K vehicle? Good question. What salary should you be making to afford a $60-80,000 family vehicle? The top 10% makes $200,000. To buy a $60-80,000 vehicle with a $200,000 household income seems well...risky. The guy at the dealer says most families buying these make much less than that. Not meaning to get into a debate about spending or the value of these vehicles, but it does seem crazy that so many are willing to drop $80K like nothing...and to pay cash for it when residuals are going to tank in a year. I'm above that 10% and to spend even $50K on a depreciating asset is a hard pill to swallow, let alone $80K but I'm willing to do it simply because I'll have it for 10+ years (the only way buying one of these at these prices makes any sense at all) and it's going to serve a purpose to us beyond just daily transportation.

As for gas...it's strange so many are complaining about gas with these vehicles when really after spending what people are spending, gas expenses should be nothing. I mean...seriously...anyone that didn't see the gas spike coming 7-8 years ago and bought a truck thinking they would stay low was foolish. Really, $100/week for gas is like pennies compared to the cost of these vehicles.

 

[Quark]

It's like buying a house farther up the hill - status.

 

[suterusu]

$200K/yr. is roughly $10K/month take home after taxes, 401K, etc. So a $1,000/month payment (if they put money down) is 10% of their take home. What percent of take home do you think an average car payment is?

 

[RVAHokie]

$200K/yr. is roughly $10K/month take home after taxes, 401K, etc. So a $1,000/month payment (if they put money down) is 10% of their take home. What percent of take home do you think an average car payment is?

Good question. My house hold makes double that and I'm still squeamish about the Denali I have on order.

 

[todayusay]

The guy at the dealer says most families buying these make much less than that. Not meaning to get into a debate about spending or the value of these vehicles, but it does seem crazy that so many are willing to drop $80K like nothing...and to pay cash for it when residuals are going to tank in a year.

As for gas...it's strange so many are complaining about gas with these vehicles when really after spending what people are spending, gas expenses should be nothing. I mean...seriously...anyone that didn't see the gas spike coming 7-8 years ago and bought a truck thinking they would stay low was foolish. Really, $100/week for gas is like pennies compared to the cost of these vehicles

My thought would be that anyone that has the ability to drop $60-80k in cash for anything..SUV, boat, RV, and so on is in the minority.

If you want to talk about the guy that just retired and is splurging because they just got a lump sum payment to replace their pension or they have $800k in an 401k and decide to pay cash for (fill in the blank)....that's not quite the normal buyer. Usually those are the ones that are making that once in a lifetime purchase for cash...and a vehicle usually fills that void. Used to work in the financial sector and it was almost a given that the retiree was going to draw +$40k on their account within the first month of moving their retirement over for a single purchase.

The rest of the buyers of these SUVs are stretching out the financing as far as they can and are in the majority as your dealer mentions. School teacher (or similar job) making $50-65k and then the spouse maybe making $60-80k...so ~$125k combined income. They also aren't coming on a forum to discuss their order in the middle of the day.

All depends on your circumstances. We tried to keep a vehicle for over 150k miles a couple of times (we average 45-50k/year on the family vehicle) and after spending several thousand on a transmission both times, decided that wasn't our ideal path. Have a buddy with a 2017 Chevy half ton and another with a 2016 Suburban and they both had to put in new transmission with under 80k miles.

If you can buy one at sticker or less and don't care about the optics, buying new every 9 mos - year would probably make the most financial sense right now. Drive it until the warranty is about out and trade/sell if for what you paid for it - or more. The used prices will continue to be strong as GM will continue to increase the MSRPs on the Tahoes/Yukons - thereby increasing value of the used ones...seems like GM was a little late to the game of raising prices. Small increase in the fall, another increase in early spring and last month an increase that doubled the first two increases...My 2022 Ram 3500, ordered in Dec - delivered in Feb, is now almost $7k higher if you built the exact same truck in a 2022...just ridiculous

was just at the dealer today and salesman told me he had a couple buyers back out on trailblazers as they didn't want to wait on their order (at sticker) and the dealer down the street had several at $5k over...we are a solid year into the chip shortage/car market craze and it isn't slowing down yet. Will be interesting to see where we are around October after summer spending has come into reality

 

[mngopher]

We *almost* bought an Expedition Max. Talked to the dealer about it one day and the next day went to go look at it. It was sold earlier that morning. Had it not have been sold, there's a chance we would have bought it. In hindsight I'm so thankful we didn't, because right now there's an open recall on most all '20/'21 Expeditions because they can spontaneously combust. Ford is asking all owners to park them outside away from structures while they still try to determine root cause...

I've also noticed your observation that there are a lot of LOW mile used GM full-size SUVs available. We went to a dealer that had a row of them. As we looked at each one, some of them had ~50 miles on them, the plastic wrappers covering things like the screen, hvac knobs, etc. hadn't even been removed yet. They were not USED, but they were being sold as used so the dealer could throw a huge markup on them and not get in trouble with GM for gouging above MSRP. They had a Suburban RST 6.2L used with less than 50 miles. It was just a tad under $100K...

Thanks for the heads up on the Expeditions. We went to go look at one tonight and it had an open recall on it...but it was still for sale anyway. I asked them to check and they told me it was clear...when I looked myself, it was one of the vehicles being recalled. Pretty annoying how dishonest they are.

As for the other piece...the dealership that's been dicking us around over our order...well I found out why tonight. I noticed they must've had a new delivery of vehicles so I stopped by to see how many had sold signs. All of them did...but the idiots put the customer's name on every single one of them. With the exception of a few pickups, almost all of them were being sold to businesses. The Yukons were actually being sold to some auto brokerage outfit out of Montana. What ****** me off is that now I realized that my order likely was never placed or had a lower priority than these brokers. I'm guessing these brokers are agreeing to split the profit with the dealership too.

That being said...word is, dealerships are starting to have a hard time dumping their marked up used inventory especially SUVs and trucks (the brokers don't buy used). I give it 6 months before the entire market crashes. A friend of mine said that dealers at auctions are having to rerun cars several times until they get the amount they're looking for. I've seen this too where vehicles that I saw two months ago are still sitting there without buyers...mostly used SUVs and pickups with huge markups.

We're out of the market until it corrects unless something pops up. Thanks for the comments on your experience. I appreciate it. For those willing to wait longer, good luck. I'm sure the wait will be worth it....just don't overpay.

 

[Stbentoak]

Market correction= MSRP. The days of 5-10K off sticker are over....

Also, for @todayusay you should run a poll on who paid cash and who financed for 10 years. I think you'd be shocked. The young families or schoolteachers that you discuss are buying Tellurides, Palisades, and Santa Fe's, Not Denali's and Tahoe's. Boats and RVs are in a completely separate category.

And for @RVAHokie If you make 400 a year and an 80K vehicle scares you, you must be mismanaging your money or live on the east or west coast. I've never made any money anywhere near that, but I was taught by a wise financial advisor in my 30's to pay myself 1st, Live Debt free within your means, and invest and let time do the rest. It's a tough row to hoe for lots of young families today.