Best car deal in 2009?

[sn1p3r]

http://www.itulip.com/images/oceanofcars.jpgDear iTulip,

I may find myself near the end of a lease and needing a different car (new or used) in 2009 and since a car can be a sizable investment I am looking for some good "strategery." I agree with EJ's "pay cash for cars (http://www.itulip.com/forums/showthread.php?p=4671#post4671)" mantra so will be trying to keep the cost under about $10,000. My preference is a SUV or Jeep style vehicle.

Any ideas of what companies might be most likely to have a fire sale? Timing?

Regards,

snip3r Dear sn1p3r,
The Great American FIRE Economy Sale began in 2006 when the housing market rolled over (http://www.itulip.com/forums/showthread.php?t=606). The asset price deflation spilled over into the Productive Economy in 2007, creating the recession we forecast (http://www.itulip.com/forums/showthread.php?t=550). 2008 marked the start of debt deflation in the US, and the Debt Deflation Bear Market (http://itulip.com/forums/showthread.php?t=2774) we forecast Dec. 27, 2007. The Consumer Goods Fire Sale of 2009 (http://www.itulip.com/forums/showthread.php?p=66592#post66592) will follow on the FIRE Economy Sale in inflated assets that began in 2007.

When it comes to cars specifically, the Consumer Goods Fire Sale will last for years.

Here's an example of what's going on.
Auto dealership troubles ripple across the region (http://www.boston.com/business/articles/2008/12/23/auto_dealership_troubles_ripple_across_the_region/)
Dec. 22, 2008 (Boston Globe)

Federal bailout expected to do little to stem local closings; state and municipal tax revenue will continue to feel pinch

South Shore Buick is just one of more than 40 new-car dealerships in the state that have gone out of business this year, according to the Massachusetts State Automobile Dealers Association. There are now 462, down from 533 at the beginning of 2007. Across the country, the National Automobile Dealers Association estimates, there will be 900 fewer dealerships this year than last, and a net loss of 1,100 in 2009.

"It's the same phenomenon you see in almost everything else - there are too many car dealers, there are too many shopping malls, and there are too many hotels," said Michael E. McGrath, an author and business consultant based in Boston who has advised the automotive industry. "Dealers are trying to cope with the fact that people simply don't have any money."
As unemployment rises (http://www.itulip.com/forums/showthread.php?p=59666#post59666), consumers will have even less money to spend on cars.

Let's skip over the next few years and jump all the way to the bottom of the Depression:


The volume of unsold cars is now so large it is best measured in acres of lot space required for storage. Reuters reports that at the Long Beach, California port, "Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres." By the end of 2009, even though few new cars will be shipped to US ports, that inventory will hardly have been worked down at all, owing to the glut of good and very cheap used cars on the market.
Tens of thousands of companies will go out of business in 2009, putting thousands of used leased cars on the market.
Hundreds of thousands of households will be unable to make lease and loan payments, putting a few hundred thousand more used cars up for sale.

All this spells big bargains in new and used cars next year. Look for two-for-one sales and absurd discounts.

Even now, before the expected rise in unemployment, we have received a rash of anecdotal evidence of bargains, such as a friend of iTulip reporting yesterday that they purchased last week a two year old Mercedes off lease with less than 20,000 miles that sold new in 2006 for $85,000. What did our friend pay? Wait for it... $22,000.

We bet that if you wait until next year, you will be able to get a wide range of very good cars for your $10,000. If you can wait, we recommend it.
iTulip Select (http://www.itulip.com/forums/showthread.php?t=1032): The Investment Thesis for the Next Cycle™
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[FRED]

Bump to the top!

[amitsaluja]

Here is a buy 1 get 1 free.

http://itulip.com/forums/attachment.php?attachmentid=907&d=1230063952

[Chris Coles]

All dealers buy their vehicles at an auction. Find the local auction and take a day or even two or three to get your bearings. I always buy a car at auction. Unusual makes are less successful at auction and therefore go for a lower price than the more usual marks. Remember that the dealers are always trying to find a car that will sell easily for them to keep their turnover going. By the same token, they will have taken in a vehicle as a part exchange that they need to offload. Sharp eyes will spot many bargains. Often the bids will have stalled. Never bid before everyone else has stopped. yes, that makes for a need for VERY rapid decisions. That is why I advise you take a few days to get the feel for the way it all works. Make a few decisions about the car you want to buy and set a price. NEVER go above your price. There will ALWAYS be another chance for another, similar car. For example, sometimes you will get a string of vehicles, all very similar, the first ones go to the most enthusiastic bidders but by the time the urgent buyers have sated their desires, the whole thing can settle down such that the last of the string can go for a song....

Enjoy.

[cobben]

Based on my experience in the Swedish financial crisis of the early 1990's, availability of cheap better used cars should peak about the same time as corporate bankruptcies, as that's when the leasing companies will have the most on their hands. This could drag out for some time, hard to say, as bankruptcies haven't really started up yet in most areas.

If you want a new car direct from a dealer, that peak should come much earlier, probably already this winter or spring, as they are aready panic-dumping those, and will see no reason to hold anything back for better times.

[LargoWinch]

FRED, where can I get a $85K Mercedez for $22K? I might be convinced to trade in my bicycle at this price...

[jacobdcoates]

I haven't seen them go for 22k yet, but I have seen them go for 27k. FRED is right though there will be some absolutely stupid bargains on vehicles next year. IF you think the price are good now really you should just wait till unemployment peaks. At least historically anyways, car price bottom when unemployment peaks.

Although, I am literally shocked on a daily basis how much cash people are putting down on their car purchases these days. 4k is not unusual the highest I've seen put down on a vehicle recently is 20k on a new Pontiac. I can't fathom a reason anyone would put 20k down on a new Pontiac, but it happens. Credit score seems to have taken a back seat in the underwriting criteria lately. Is is still important don't get me wrong, but DTI(Debt To Income) seems to be the overriding factor lately. It seems lately that high credit score + high DTI = turndown. Low Credit score+ high DTI and your credit application gets sent super express mail to the sun, to be properly filed:eek:. And wouldn't you know it SUV's/ Trucks are making a small come back, It's not surprising really, 50% off equals greater demand.

Oh and forget about leasing a car next year. If you want to lease a vehicle better do it now, because most banks/lenders won't still be in the business next year. Especially after the have to take staggering losses on there lease portfolios. Not that I recommend that anyone lease, unless you are retired(don't drive a lot) and are a fanatic about upkeep on your car. If your that person, leasing might be good for you. Otherwise just buy a car you can damn well afford, which means either cash or your payment equals 10% of you take home pay.

[Chris Coles]

I haven't seen them go for 22k yet, but I have seen them go for 27k. FRED is right though there will be some absolutely stupid bargains on vehicles next year. IF you think the price are good now really you should just wait till unemployment peaks. At least historically anyways, car price bottom when unemployment peaks.

Although, I am literally shocked on a daily basis how much cash people are putting down on their car purchases these days. 4k is not unusual the highest I've seen put down on a vehicle recently is 20k on a new Pontiac. I can't fathom a reason anyone would put 20k down on a new Pontiac, but it happens. Credit score seems to have taken a back seat in the underwriting criteria lately. Is is still important don't get me wrong, but DTI(Debt To Income) seems to be the overriding factor lately. It seems lately that high credit score + high DTI = turndown. Low Credit score+ high DTI and your credit application gets sent super express mail to the sun, to be properly filed:eek:. And wouldn't you know it SUV's/ Trucks are making a small come back, It's not surprising really, 50% off equals greater demand.

Oh and forget about leasing a car next year. If you want to lease a vehicle better do it now, because most banks/lenders won't still be in the business next year. Especially after the have to take staggering losses on there lease portfolios. Not that I recommend that anyone lease, unless you are retired(don't drive a lot) and are a fanatic about upkeep on your car. If your that person, leasing might be good for you. Otherwise just buy a car you can damn well afford, which means either cash or your payment equals 10% of you take home pay.

One, the car will depreciate about 20% in the first year and two, as all dealers buy at auction they get their stock at about another 20% off minimum. As long as you can accept the purchase of a second hand vehicle, it is a no brainer to buy at the auction. Oh! and remember, a Ex Hire vehicle is about six weeks old.....

[kingcopper]

Lotta locals have been buying 2008 Kia's for $3000-$4000 with under 5000miles at the public auctions. These have 100,000mile warranties. Thats a bargain! These Kia's are rejected in auction at about the same rate as Wall Street's Paper; almost always!

I'm into performance and will pick up an 08'-09 BMW M3 or Porsche 911 for 60% off; hopefully.

As a note, I've explained before that you can watch the M3 market and see just how rough the economy is. These cars have sequential transmissions and hand built engines. They usually sell at MSRP. or close. When buying used, there isn't much inventory and they hold their value exceptionally well. That was then, this is now. My local dealer is sitting on 8 2008's as of Dec. 24th, 2008. They'll have to pay taxes on the inventory soon. The 2009's are in route. What will they do? I think the salesmen will have to drive them for a week and sell them as demos!:eek:

[sn1p3r]

wow, I wasn't expecting this many great responses!

I have to turn my lease in June 2010 so I have plenty of time to watch the market until then and wait for a deal. I forgot about corp. leases affecting the market but can see how that will be a factor. Maybe I can get one of those Progressive SUV's for a few gold eagles :D

[vdhulla]

If one is open to buying a regular/hybrid car, what would you recommend considering:

- Peak cheap oil is true
- Approx. how far are we from the crazy gas prices. Would it be feasible to buy a regular car right now and then switch to hybrid in few years ?

[metalman]

If one is open to buying a regular/hybrid car, what would you recommend considering:

- Peak cheap oil is true
- Approx. how far are we from the crazy gas prices. Would it be feasible to buy a regular car right now and then switch to hybrid in few years ?

mega posted this (http://iowahawk.typepad.com/iowahawk/2008/11/lemon.html). i'm waiting for a Pelosi GTxi SS/Rt Sport Edition from Congressional Motors! yeh!

http://coldfury.com/images/Muirmobile.jpg

[brucec42]

Carl Weathers buys all his vehicles at police auctions. Here are a few of his other money saving tips for hard times.

http://www.youtube.com/watch?v=75bDmEugcxk

[rchdenton]

Yes, good advice. Car auctions are one of life's great educations. If you have not bought a car at auction I would absolutely recommend it. Pay attention to your own emotion as you swing from depression and boredom to excitement and euphoria and back.

Nothing bursts the bubble of cars being special like seeing them sold at a secondhand auction. You get to see what they are really worth.

One tip - identify who the dealers are and do not be afraid to out bid them - they have to buy a car they can resell at a profit so you know you are paying a fair price. If you do let something go too cheap a dealer will often onsell it to you in the car park for an extra $50 - $100 as it doesn't owe him anything.

[Chris Coles]

Yes, good advice. Car auctions are one of life's great educations. If you have not bought a car at auction I would absolutely recommend it. Pay attention to your own emotion as you swing from depression and boredom to excitement and euphoria and back.

Nothing bursts the bubble of cars being special like seeing them sold at a secondhand auction. You get to see what they are really worth.

One tip - identify who the dealers are and do not be afraid to out bid them - they have to buy a car they can resell at a profit so you know you are paying a fair price. If you do let something go too cheap a dealer will often onsell it to you in the car park for an extra $50 - $100 as it doesn't owe him anything.

Again, on the other hand you may find the auctioneers coming back to you after the hammer falls saying something to the effect that the owner of the vehicle has set a reserve of.... whatever... always a higher price than you stopped bidding at. Tell them, politely, to get lost, the only price is that at the fall of the hammer or you walk away. If anyone gets the idea they can bamboozle you into accepting a higher price than at the fall of the hammer, from that moment you are lost. Stick firmly to your guns, the price is always at the fall of the hammer or walk away. With any car auction, there will always be more bargains...always; and from that moment they all know your metal.

[gte811i]

While I do believe car prices will prob. come down, I don't necessarily think great financing will be coming back (at least for some companies). I bought a new Buick this past summer, 0% 6 years. I recently went in to check if a minor issue needed to be fixed (recall-it wasn't a problem on my vehicle though). I hate 6 years . . . but @ 0% . . . I've got all the money in the bank earning 4% interest . . . Dealer said the best financing available for stellar credit (750+) is 5%.

I'm curious how far prices will fall. With GM now at the trough, do they have to drop prices as far as they should have? You could essentially have a 30s style food program, pay GM to build vehicles that just sit and rot since they don't have to drop the price.

So if you were buying with cash, buying later with cash is prob. better. If you are buying with financing . . . that's were you'd really have to have a price collapse (i.e. what's happened with trucks and SUVs has to happen across the board) for it to matter.

[kx5fast]

On the ground report, and granted a "specialty" vehicle, but this is real world prices.

I need a truck for business and pleasure, bought my last truck new in 1999, GMC Sierra 1500, all the whistles and bells. Have gotten 197K miles, trouble free. Paid 31K back in 1999.

Today, need more towing capacity, wanted a diesel, however, did not like the prices in the last few years (48-50K fully loaded) so I have been looking at used (2006 and 2007 models) due to the fact that they have seen significant depreciation. Usually marketed at 27-32K with 30K miles or so. Well, did a hail mary email look, and found a 2008 diesel GMC Sierra 2500 for (drumroll here)..... 33,000 dollars. This is a new truck, on the dealer lot, 9 miles on it.

This is a fully optioned truck that only lacks the Nav system, every other conceivable option is on the truck. And it is a diesel, typically at least 10K over a similiar gas powered truck. As my miles indicate on my old truck, I am a buy and hold (or buy and destroy) vehicle holder. I expect this vehicle to last a minimum of ten years, most likely 15. Over the life span of that ten years, fixed depreciation of 3K per year even of the truck is worth zero in the end.

That is some of the cheapest hauling dollars you will see, ever.

The fact that I paid a mere 3K over my gas powered truck after ten friggin years of inflation astounds me.

RP

[FRED]

On the ground report, and granted a "specialty" vehicle, but this is real world prices.

I need a truck for business and pleasure, bought my last truck new in 1999, GMC Sierra 1500, all the whistles and bells. Have gotten 197K miles, trouble free. Paid 31K back in 1999.

Today, need more towing capacity, wanted a diesel, however, did not like the prices in the last few years (48-50K fully loaded) so I have been looking at used (2006 and 2007 models) due to the fact that they have seen significant depreciation. Usually marketed at 27-32K with 30K miles or so. Well, did a hail mary email look, and found a 2008 diesel GMC Sierra 2500 for (drumroll here)..... 33,000 dollars. This is a new truck, on the dealer lot, 9 miles on it.

This is a fully optioned truck that only lacks the Nav system, every other conceivable option is on the truck. And it is a diesel, typically at least 10K over a similiar gas powered truck. As my miles indicate on my old truck, I am a buy and hold (or buy and destroy) vehicle holder. I expect this vehicle to last a minimum of ten years, most likely 15. Over the life span of that ten years, fixed depreciation of 3K per year even of the truck is worth zero in the end.

That is some of the cheapest hauling dollars you will see, ever.

The fact that I paid a mere 3K over my gas powered truck after ten friggin years of inflation astounds me.

RP

Enjoy it while you can. The prices are a once in a lifetime combination of the high purchasing power of dollars and temporary excess inventory in the face of collapsed demand.

The demand will not recover much over the years; we expect an L shaped recovery in the automobile market.

With little in the way of inventory replacement, the inventory will work through by the end of 2009.

By 2010, prices will go back up, especially imports due to the US getting its way politically and achieving a weak dollar.

[phirang]

Car prices are up 20% in Moscow area, according to my McKinsey friend who lives and works there.

This is a result of recent protectionist policies, though.

[FRED]

Car prices are up 20% in Moscow area, according to my McKinsey friend who lives and works there.

This is a result of recent protectionist policies, though.

Went to the local Linens N Things to buy closeout discounted sheets and towels to last a few years. Too late! :eek:

http://www.itulip.com/images/linensNthings.jpg

[metalman]

Went to the local Linens N Things to buys closeout discounted sheets and towels to last a few years. Too late! :eek:

http://www.itulip.com/images/linensNthings.jpg



without malls, what will the people do?

<small>The shopping mall construction boom in Asia has attracted a good deal of international media attention during the past few years. Eight of the ten largest malls in the world were in Asia in early 2008 and several more mega-malls in China and the United Arab Emirates are under construction.

Mall watchers have predicted that within the next few years, seven of the ten largest shopping malls in the world will be in China alone. Typically, Chinese mega-malls are only parts of a much larger residential, office, and entertainment complexes. </small><small>An informative discussion of this phenomenon is an article by David Barboza, "China Builds Malls on Gigantic Scale, " (http://theseoultimes.com/ST/db/read.php?idx=1962) New York Times, May 25, 2005.

This phenomenon is also surveyed in a short article, with images of the ten largest malls, by Tom Van Riper in "World's Largest Malls," (http://www.forbes.com/business/2007/01/09/malls-worlds-largest-biz-cx_tvr_0109malls.html) Forbes.com, January 9, 2007.

Exclusive Shopping Mall Studies interview about Chinese malls with a Hong Kong-based real estate expert: Interview link. (http://www.easternct.edu/depts/amerst/BeesleyInt.htm)</small>

again???

http://farm4.static.flickr.com/3268/3117275077_47dc90c7a1.jpg?v=0
<script type="text/javascript">F.decorate(_ge('photo_notes'), F._photo_notes).notes_go_go_go(3117275077, 'http://farm4.static.flickr.com/3268/3117275077_47dc90c7a1_t.jpg', '3.1444');</script><form id="fave_form" method="post" style="visibility: hidden;"><input name="magic_cookie" value="7615cec47d648d64baa678e2a4003e8b" type="hidden"><input name="faveadd" value="0" type="hidden"><input name="faveremove" value="0" type="hidden"></form> <!-- PHOTO CONTENT: DESCRIPTION, NOTES, COMMENTS --> Window Shopping 1929

[jk]

mega posted this (http://iowahawk.typepad.com/iowahawk/2008/11/lemon.html). i'm waiting for a Pelosi GTxi SS/Rt Sport Edition from Congressional Motors! yeh!

http://coldfury.com/images/Muirmobile.jpg
thanks for posting the link here. i loved it.:D

[Chris Coles]

Went to the local Linens N Things to buys closeout discounted sheets and towels to last a few years. Too late! :eek:

http://www.itulip.com/images/linensNthings.jpg


Fred, you missed out by decades as a careful inspection will have told you, (I feel sure to suggest), that there was not a single item truly manufactured from Linen. Looking back I was incredibly lucky as my parents were well off in the early 1920's when they married and my mother got a very large quantity of real Linen as a wedding gift. As a result, I spent all my home life sleeping on Real Linen. It is unobtainable today. Irish Linen was the best. Wonderful stuff. But in passing this shows the long term possibilities for new products and markets. Real Linen is infinitely better than cotton for bed sheets and much more besides.....:)