Buying A New (or Used) Car Experience During Supply Chain Shortages

Since we got WAY off topic :joy:

I’m not sure what my dad was thinking except to buy the car he wanted. But when I was a teenager he bought a 1972 black mustang with a 305 engine for his girls to drive.

I was incredibly unappreciative of this car. I squealed the tires doing the most mundane acceleration. I remember being so embarrassed :flushed:

I promise that I drove this car in the same way I drive now, as the old lady that I am today. Maybe dad knew what he was doing :wink:

2 Likes

All that I know is from our very recent experience of buying a new car.

We paid over $45,000 for a car with the turbocharged engine that is not available with the turbo engine at any dealership in the continental US as all are sold prior to arriving at the car dealership. Out purchase price included a $2,5000 market adjustment surcharge plus tax on the surcharge. Additionally, we paid about $650 for dealer applied ceramic coating.

CarMax had 2 similar cars. We bought a 2022 while the CarMax offerings were 2021 and 2020. The CarMax vehicles both had 32,000 miles or more on the odometer. When tax, title, delivery, & transportation ($595) was added to the two older, used CarMax offerings, the price was the same as we paid for a new 2022 version which had more options including the full 3 year / 36,000 mile bumper-to-bumper warranty.

In short, the used 2020 version was slightly over $45,000, the used 2021 version was slightly over $45,000, and our new purchase–in a color that we preferred–was also slightly over $45,000 even though we paid about $3,300 over MSRP. (Again,only interested in the turbo engine which all 3 had.)

I monitored offerings for a period of more than 6 weeks before & after our purchase and nothing changed other than that all 3 vehicles were no longer available. We had to wait just 3 weeks for delivery. Currently, buyers are being told that the wait is a minimum of 8 months. We got ours quickly because it was pre-ordered by someone else who later decided against buying the vehicle.

The dealer said that they field almost daily calls/emails from all over the country looking for turbo models of this vehicle.

FWIW We did see a used model with over 42,000 miles offered for about $2,000 less than we paid for the new model.

3 Likes

You got a great deal on the '22, all things considered. Maybe it had been on their lot for a while and they wanted to get rid of it…?

From a Consumer Reports survey reported by USA Today on November 18, 2021:

CR 10 LEAST reliable new 2022 cars, trucks, & suvs:

  1. Mercedes-Benz GLE
  2. Ford Explorer
  3. Ford Mustang
  4. Chevrolet Silverado 1500 / GMC Sierra 1500
  5. Chevrolet Corvette
  6. Volvo XC90
  7. VW Tiguan
  8. Tesla Model Y
  9. Chrysler Pacifica
  10. Subaru Ascent

CR 10 MOST reliable new 2022 cars, trucks, & suvs:

  1. Lexus GX
  2. Kia Niro EV
  3. Toyota Prius Prime
  4. Toyota Prius
  5. Cadillac XT-5
  6. Mazda MX-5 Miata
  7. Honda Insight
  8. Toyota Highlander
  9. Subaru Crosstek
  10. Mazda CX-9
1 Like

https://beaumontenterprise.com/news/article/used-car-prices-surge-amid-chip-shortage-ls-it-16628497.php

The second to the last paragraph in the article referenced above is eye-opening.

No. I had to wait three weeks for delivery. It was a special order vehicle that was declined after manufacture, but before delivery. (Might have been due to a loss of job by buyer.) We paid well above MSRP. No other local dealers even have one available to test drive.

As I noted in a post above, these cars rarely arrive to a dealership unsold.

This dealership gets almost daily calls & emails from all over the US seeking turbo versions of this vehicle.

Local dealers of another SUV from a different manufacturer is charging a $7,500 market-adjustment premium. Could not even find one to test drive (Chevrolet Traverse). Kia Telluride dealers are charging $12,000 to $18,000 above MSRP–and getting it.

While we were lucky to get this vehicle, we are not happy about paying a market adjustment premium of over $2,500 above MSRP. But, Covid delays resulted in the loss of production of 10 million cars & there may be a resurgence of another Covid strain. Even though this vehicle will just stay parked in our garage, we needed assurance of a new vehicle if we decide to take a long trip. Recently, there was–and may still be–a shortage of rental cars.

While some dealerships boast that they do not charge any market adjustment premium, they either have no new vehicles on their lot or they only have unpopular models available.

P.S. Since we paid well above MSRP for our new 2022 vehicle, we thought that we could get a discount on added after-delivery options through the same dealer, but the dealer refused to offer any discount on additional post-delivery add-ons that needed to be purchased through that dealer’s parts department.

1 Like

Chip shortage is likely to last longer than most expect. US has very limited capability to increase chip production. Taiwan is more focused on producing higher end and more profitable chips than the ones used in automobiles. That leaves China the only country with the capability to increase production of these chips. However, with the issues we’re currently having with China, especially on the semiconductor front, it’s difficult to conceive that we’ll be able to cooperate on these chips.

3 Likes

I don’t know how they could rate the 2022 Chrysler Pacifica as least reliable. It’s not even out yet. We went to a dealer yesterday to look at them. (All they had were two 2021 models). The dealer can’t tell us when we would get a new Chrysler Pacifica Pinnacle if we ordered one today.

If there were no major changes to the model, CR bases reliability rating on prior year model users.

1 Like

Of course, when stuff is made at the trailing edge, there may be few suppliers who are willing to keep their otherwise-obsolete manufacturing facilities around, increasing the cost and limiting the supply of the trailing edge stuff.

1 Like

Ahhhh, I see what you mean now. I wonder what the upcharge would have been had the vehicle not already been manufactured.

Three weeks actually isn’t too bad – people ordering some Euro brands, for instance, have to wait months for delivery. I have anecdotal evidence of that – our dealership had to wait that long for some 2021s and 22s to arrive. Manufacture and delivery has really been sloooooooow ever since Covid hit… at first due to factories shutting down for long periods, and then due to the added bonus of the chip issue.

A big part of this problem is due to the ancient compute platform still in use by the large car manufacturers. The computing technology and architectures could be so much better if they were to brought into the 21st century. I’m not sure if it’s lack of vision or expertise but it’s actually kind of funny. The newer EV companies have avoided this since they are green field developments. This will most likely give them an edge even while the incumbents try to catch up.

My understanding is that the qualification process for new parts in autos is quite long. This is good for safety because it means everything has had a relatively long test time. But it does not make car companies nimble! Someone I was chatting with was telling me about the great ā€œlegacyā€ business his company had on the electronics for the windows. Not sexy enough to change but also not using state of the art parts. Great for his sleepy, old factory. But I imagine these parts are increasingly hard to find.

The old ā€œwe have to qualifyā€ the part just an excuse. If you look at the modern architectures used by new manufacturers, a central processing platform controls several functions were the legacy car manufacturers need multiple single purpose pieces of silicon.

Even if the traditional auto manufacturers upgraded their infrastructure, I’m still not sure that’d solve their problem with the lack of chips. No one is going to invest in new chip foundries that manufacture legacy chips. Only one company (the Dutch company ASML) can make the lithographic machines to fabricate the latest generations of chips and each one costs $150m or more. So for the time being, we’re stuck. TSMC is supposedly going to set one up in AZ (and Intel will likely do the same provided the federal government is willing to subsdize), but they will likely take years to build in the US, especially with the evironmental impact these plants will have (they use lots of toxic chemicals and large amount of fresh water).

There would have been no surcharge had the vehicle not already been manufactured. The problem is the wait of 8 months–according to the three other dealers with whom I have spoken. And it is unclear whether or not certain features might be deleted or unavailable as some manufacturers–such as BMW & GM & Tesla–are doing in order to produce vehicles.

Many dealers do not add any additional market adjustment to MSRP, therefore, I would just place my order through such a dealership.

From Kelley Blue Book: Is the Car Shortage Starting to Ease? - Kelley Blue Book

Notes that Honda, Kia, Toyota, and Subaru have the tightest supplies, while Chrysler, Alfa Romeo, and Ram dealers have the most new vehicles in inventory.

Shares that due to almost every sale occurring at MSRP or more, the average transaction price is a bit over $46,000 ($46,038).

That page also lists three Stellantis brands (Chrysler, Alfa Romeo, and Ram) with the largest supplies available.

1 Like

Maybe the Yugo will make a comeback since there were no computer chips needed.

http://content.time.com/time/specials/2007/article/0,28804,1658545_1658533_1658529,00.html

1 Like