Car Talk 6: Best of times and Worst of Times

[Desertbreh]

It was $36,XXX, still 20% under or more what a GRolla will be and shared with

Relatively speaking, when you bought your GTI, it wasn't that far off from spending $45k today.

It was half. Are you mother fucking Richard Nixon?

[Desertbreh]

I'm not taking this Shawshank laundry prison rape going down. Max Voice: It's just inflation, let me show you on my Abacus!

Me: Fuck you, motherfucker. Don't charge me twice what is was fucking yesterday and expect me to be your bitch. It pisses me off.

[max225]

I'm not taking this Shawshank laundry prison rape going down. Max Voice: It's just inflation, let me show you on my Abacus!

Me: Fuck you, motherfucker. Don't charge me twice what is was fucking yesterday and expect me to be your bitch. It pisses me off.

Gas was 6 cents a gallon when I was growing up ok den … staying home it is.

[Desertbreh]

I'm not taking this Shawshank laundry prison rape going down. Max Voice: It's just inflation, let me show you on my Abacus!

Me: Fuck you, motherfucker. Don't charge me twice what is was fucking yesterday and expect me to be your bitch. It pisses me off.

Gas was 6 cents a gallon when I was growing up ok den … staying home it is.

We fight on.

[D Griff]

Relatively speaking, when you bought your GTI, it wasn't that far off from spending $45k today.

It was half. Are you mother fucking Richard Nixon?

it was $23,xxx brand new. Sure there has been inflation, but not 100%.

To put it into perspective, the average price of a gallon of gas in 2011 was $3.52. It is now $4.20.

[D Griff]

Hopefully I’m and a GRolla comes in at high 30s.

[goIftdibrad]

It was half. Are you mother fucking Richard Nixon?

it was $23,xxx brand new. Sure there has been inflation, but not 100%.

To put it into perspective, the average price of a gallon of gas in 2011 was $3.52. It is now $4.20.

ok, to do this for this environment you really have to compare MSRP to MSRP

2011 GTI MSRP=23,695
2022 MSRP=...29k




26%

[coogles]

it was $23,xxx brand new. Sure there has been inflation, but not 100%.

To put it into perspective, the average price of a gallon of gas in 2011 was $3.52. It is now $4.20.

ok, to do this for this environment you really have to compare MSRP to MSRP

2011 GTI MSRP=23,695
2022 MSRP=...29k




26%

Equivalent to an annual inflation rate of 2.133%.

[ChrisoftheNorth]

I'm going to argue that cars are outpacing overall inflation. The average price of a new car is over $40k today. In 2011, it was $25k. So a 60% increase. I know there's a ton of factors that go into avg car prices (like vehicle size trends, mix, etc) but the fact is, there aren't as many GR Corolla type vehicles anymore. And what is left, is quite pricey. So relative to the overall market, $45k really isn't all that much now...just barely over industry average.

I do believe that a base GR Corolla will start in the upper 30's, with the fancy edition in the low $40k...$45k top with accys and whatnot. They're quoting 6-7k production volume in the first year, with no set production cap or run. Assuming that number is a floor and they'll produce more if demand is there, that's quite a bit of volume for a limited market vehicle. I hope they sell every one without issue, but Toyota knows they can't overprice it. Reading more about it, it has a number of tech upgrades that the NEXT gen Corolla will get, which means the current car is future proofed to last a while. Say production runs for 5 years, that's 30-35k minimum of the only things.

[goIftdibrad]

ok, to do this for this environment you really have to compare MSRP to MSRP

2011 GTI MSRP=23,695
2022 MSRP=...29k




26%

Equivalent to an annual inflation rate of 2.133%.

Yea, and it should be zero. so I was just bring the re: GTI pricing

I'm going to argue that cars are outpacing overall inflation. The average price of a new car is over $40k today. In 2011, it was $25k. So a 60% increase. I know there's a ton of factors that go into avg car prices (like vehicle size trends, mix, etc) but the fact is, there aren't as many GR Corolla type vehicles anymore. And what is left, is quite pricey. So relative to the overall market, $45k really isn't all that much now...just barely over industry average.

I do believe that a base GR Corolla will start in the upper 30's, with the fancy edition in the low $40k...$45k top with accys and whatnot. They're quoting 6-7k production volume in the first year, with no set production cap or run. Assuming that number is a floor and they'll produce more if demand is there, that's quite a bit of volume for a limited market vehicle. I hope they sell every one without issue, but Toyota knows they can't overprice it. Reading more about it, it has a number of tech upgrades that the NEXT gen Corolla will get, which means the current car is future proofed to last a while. Say production runs for 5 years, that's 30-35k minimum of the only things.

I'd listen to this man on this because the GTI example is an outlier IMHO. Hell some of that may even be hidden 6+% inflation this year of due to a MSRP to MSRP comparison b/c in 2011 no one paid MSRP.

This is even more true for the typical big american vehicles that just simply use more materials.

re: your comments on the GR, one can hope you are on the money about it. I have slight wants for the thing but I also have other priorities in life at the moment.

[D Griff]

it was $23,xxx brand new. Sure there has been inflation, but not 100%.

To put it into perspective, the average price of a gallon of gas in 2011 was $3.52. It is now $4.20.

ok, to do this for this environment you really have to compare MSRP to MSRP

2011 GTI MSRP=23,695
2022 MSRP=...29k




26%

Which is significant but $29k is not $45.

[D Griff]

An STI is probably a better comparison.

GRolla and Hype R simply didn’t exist ten years ago, we had three cars in that category, Golf R, STI, Evo X. We now have about the same amount and MSRP versus MSRP seems to have paced with inflation pretty well.

A GTI is a lot less car than a GRolla.

[coogles]

ok, to do this for this environment you really have to compare MSRP to MSRP

2011 GTI MSRP=23,695
2022 MSRP=...29k




26%

Which is significant but $29k is not $45.

An average annual rate of 2.13% is essentially exactly on the Fed's target. I'm not going to write a thesis about the merits and drawbacks of low levels of inflation in an economy, but this particular example is a very poor one if you're trying to illustrate rampant runaway prices.

[D Griff]

I'm curious to see what the manufacturers do from an MSRP standpoint going into '23 model years though. Let's take a GR86 as an example. MSRP of $28-31K basically, I imagine average transaction price on them is at least 10-20% above that if not more. So, will Toyota say, we should be making this money, not our and raise MSRP significantly?

MSRP vs. MSRP only paints part of the picture. I bought my 2012 GTI in 2011 at a decent discount under MSRP and with $0 down, 60 months at 1.9%. I was no shrewd negotiator at age 22, nor did I have significant credit or income to back up that deal, but I was easily given it.

Today, I have 15+ years of great credit history, own a home, DINK status and between the two of us make like 6X what I made individually in 2011 and yet if I went in to buy a new GTI I would likely have to pay over MSRP (I'm guessing, particularly given it's an all new version) and would either have to pay cash, or at best, finance at 3-5%.

I still think this will all normalize at some point though, things are already cooling down. My company has a pretty great stock outlook for the first time in 1.5 years, and sadly our competitors are improving as well. We face the same chip/supply chain challenges as auto makers.

Additionally, people are traveling again in full force, dining out in full force, etc. so the boredom buying will likely slow some (I think it already is).

I'm not saying that we will be back to getting 10-20% on the hood this year, but I think getting something at MSRP relatively easily is coming back quickly.

[max225]

I'm curious to see what the manufacturers do from an MSRP standpoint going into '23 model years though. Let's take a GR86 as an example. MSRP of $28-31K basically, I imagine average transaction price on them is at least 10-20% above that if not more. So, will Toyota say, we should be making this money, not our and raise MSRP significantly?

MSRP vs. MSRP only paints part of the picture. I bought my 2012 GTI in 2011 at a decent discount under MSRP and with $0 down, 60 months at 1.9%. I was no shrewd negotiator at age 22, nor did I have significant credit or income to back up that deal, but I was easily given it.

Today, I have 15+ years of great credit history, own a home, DINK status and between the two of us make like 6X what I made individually in 2011 and yet if I went in to buy a new GTI I would likely have to pay over MSRP (I'm guessing, particularly given it's an all new version) and would either have to pay cash, or at best, finance at 3-5%.

I still think this will all normalize at some point though, things are already cooling down. My company has a pretty great stock outlook for the first time in 1.5 years, and sadly our competitors are improving as well. We face the same chip/supply chain challenges as auto makers.

Additionally, people are traveling again in full force, dining out in full force, etc. so the boredom buying will likely slow some (I think it already is).

I'm not saying that we will be back to getting 10-20% on the hood this year, but I think getting something at MSRP relatively easily is coming back quickly.

Manufacturers are starting to raise MSRPs + Destination fees to bridge the gap between ATPs. Slowly but surely they are catching up...

Tesla yesterday raised Model 3 prices ANOTHER $1500. I am a fool for not having to purchase one 2 months ago for 5k less... it would have absorbed my taxes and then some.

Today, I have 15+ years of great credit history, own a home, DINK status and between the two of us make like 6X what I made individually in 2011

Ima leave this one bolded. This is the MAIN DRIVER of inflation... you're far from alone, I think every single person here is at least 2x their income levels from back then. Yet of course all of us want 2011 pricing. Hell Walmart is paying their truck drivers 110k a year to start. WALMART a place that notoriously underpaid... Things are completely out of control lately. That was not the case back then.

times are changing... it is worth spending your money on physical assets if you can get them at a good price as of today. Inflation is here to stay... for at least another 1-2 years... and it is FAR greater than 7% whether you like it or not.

https://www.wsj.com/articles/walmart-ra ... 1649336400

Link to walmart truck driving. I mean you can be a HIGH SCHOOL DROP OUT AND MAKE 6 figures EASY.... this is unprecedented.

[D Griff]

I'm curious to see what the manufacturers do from an MSRP standpoint going into '23 model years though. Let's take a GR86 as an example. MSRP of $28-31K basically, I imagine average transaction price on them is at least 10-20% above that if not more. So, will Toyota say, we should be making this money, not our and raise MSRP significantly?

MSRP vs. MSRP only paints part of the picture. I bought my 2012 GTI in 2011 at a decent discount under MSRP and with $0 down, 60 months at 1.9%. I was no shrewd negotiator at age 22, nor did I have significant credit or income to back up that deal, but I was easily given it.

Today, I have 15+ years of great credit history, own a home, DINK status and between the two of us make like 6X what I made individually in 2011 and yet if I went in to buy a new GTI I would likely have to pay over MSRP (I'm guessing, particularly given it's an all new version) and would either have to pay cash, or at best, finance at 3-5%.

I still think this will all normalize at some point though, things are already cooling down. My company has a pretty great stock outlook for the first time in 1.5 years, and sadly our competitors are improving as well. We face the same chip/supply chain challenges as auto makers.

Additionally, people are traveling again in full force, dining out in full force, etc. so the boredom buying will likely slow some (I think it already is).

I'm not saying that we will be back to getting 10-20% on the hood this year, but I think getting something at MSRP relatively easily is coming back quickly.

Manufacturers are starting to raise MSRPs + Destination fees to bridge the gap between ATPs. Slowly but surely they are catching up...

Tesla yesterday raised Model 3 prices ANOTHER $1500. I am a fool for not having to purchase one 2 months ago for 5k less... it would have absorbed my taxes and then some.

Today, I have 15+ years of great credit history, own a home, DINK status and between the two of us make like 6X what I made individually in 2011

Ima leave this one bolded. This is the MAIN DRIVER of inflation... you're far from alone, I think every single person here is at least 2x their income levels from back then. Yet of course all of us want 2011 pricing. Hell Walmart is paying their truck drivers 110k a year to start. WALMART a place that notoriously underpaid... Things are completely out of control lately. That was not the case back then.

times are changing... it is worth spending your money on physical assets if you can get them at a good price as of today. Inflation is here to stay... for at least another 1-2 years... and it is FAR greater than 7% whether you like it or not.

https://www.wsj.com/articles/walmart-ra ... 1649336400

Link to walmart truck driving. I mean you can be a HIGH SCHOOL DROP OUT AND MAKE 6 figures EASY.... this is unprecedented.

My brother is a truck driver and is making far north of that, bought a new Gladiator last year as well

The interesting thing is that I don't know that higher paying jobs have kept up, particularly if you don't jump ship on your company frequently. Like as far as I know, most engineers still make low 100s, government workers and architects five figures, etc.

I have changed fields entirely and imagine if I was still at the place I worked in 2011 I would have climbed up the ladder a lot less.

[Desertbreh]

Driving Truck for Wal Mart for $9200 a month sounds pretty pretty good compared to some days of my jerb.

To all of those people who are bitching about never being able to break the cycle of poverty, here is your answer.

[max225]

I am making roughly within 10% of 3 years ago... whereas a lot of other jobs really crept up... it is making me look as well as others. Hence the "great resignation".

[ChrisoftheNorth]

If I wasn't married, I'd be a truck driver 100%. No joke, it's my perfect job.

I haven't had a meaningful increase in salary for 4 years now. I should have negotiated higher at my current job because I'm underpaid, but when I was searching, full remote jobs that I qualified for were REALLY hard to find, so I took what I could get.

Now that I have the tech experience, my opportunities are bountiful. I don't really want to job hunt again, but I'm going to be stuck at around my salary for as long as I'm at my current place. The most lucrative pay increases come by moving companies, sadly and I doubt that's going to change.

[max225]

If I wasn't married, I'd be a truck driver 100%. No joke, it's my perfect job.

I haven't had a meaningful increase in salary for 4 years now. I should have negotiated higher at my current job because I'm underpaid, but when I was searching, full remote jobs that I qualified for were REALLY hard to find, so I took what I could get.

Now that I have the tech experience, my opportunities are bountiful. I don't really want to job hunt again, but I'm going to be stuck at around my salary for as long as I'm at my current place. The most lucrative pay increases come by moving companies, sadly and I doubt that's going to change.

I too considered getting a Freightliner and starting to chase some Lot Lizzards but I feel like 18 hr drives through the fly over states on the reg will get old fast.

[D Griff]

If I wasn't married, I'd be a truck driver 100%. No joke, it's my perfect job.

I haven't had a meaningful increase in salary for 4 years now. I should have negotiated higher at my current job because I'm underpaid, but when I was searching, full remote jobs that I qualified for were REALLY hard to find, so I took what I could get.

Now that I have the tech experience, my opportunities are bountiful. I don't really want to job hunt again, but I'm going to be stuck at around my salary for as long as I'm at my current place. The most lucrative pay increases come by moving companies, sadly and I doubt that's going to change.

I've been pretty fortunate at this place, I've gotten a couple of promotions and meaningful raises. One big key is being in a major growth segment of the company. The team I'm on was originally five people and now nearly 20. My boss also likes getting people money.

I've found that most similar gigs pay similar or worse to start, so I've stayed for that reason among others.

Unfortunately I think your experience is much more 'the norm'.

Having been a truck driver of sorts (I'd say bang bussing had all the good of it and little of the bad), it was pretty dope. 5/7 most enjoyable job I've ever had.

[ChrisoftheNorth]

I'm curious to see what the manufacturers do from an MSRP standpoint going into '23 model years though. Let's take a GR86 as an example. MSRP of $28-31K basically, I imagine average transaction price on them is at least 10-20% above that if not more. So, will Toyota say, we should be making this money, not our and raise MSRP significantly?

MSRP vs. MSRP only paints part of the picture. I bought my 2012 GTI in 2011 at a decent discount under MSRP and with $0 down, 60 months at 1.9%. I was no shrewd negotiator at age 22, nor did I have significant credit or income to back up that deal, but I was easily given it.

Today, I have 15+ years of great credit history, own a home, DINK status and between the two of us make like 6X what I made individually in 2011 and yet if I went in to buy a new GTI I would likely have to pay over MSRP (I'm guessing, particularly given it's an all new version) and would either have to pay cash, or at best, finance at 3-5%.

I still think this will all normalize at some point though, things are already cooling down. My company has a pretty great stock outlook for the first time in 1.5 years, and sadly our competitors are improving as well. We face the same chip/supply chain challenges as auto makers.

Additionally, people are traveling again in full force, dining out in full force, etc. so the boredom buying will likely slow some (I think it already is).

I'm not saying that we will be back to getting 10-20% on the hood this year, but I think getting something at MSRP relatively easily is coming back quickly.

Setting MSRP is HARD. You can never decrease it, so you have to spend incentives to drop the price if needed. So raising MSRP needs to be done cautiously. I don't think we'll see huge MSRP jumps from established OEMs. Instead, we'll see a continued shift in the trim mix to be more premium. So the base MSRP went up by $1k, but you can't buy a base really, you have to buy the premium trim thing, and that went up by $3k. Avg in the middle.

It's all going to depend on the supply chain and if vehicle production can come back. We were on track to be there by now, then Russia did it's thing.

[D Griff]

If I wasn't married, I'd be a truck driver 100%. No joke, it's my perfect job.

I haven't had a meaningful increase in salary for 4 years now. I should have negotiated higher at my current job because I'm underpaid, but when I was searching, full remote jobs that I qualified for were REALLY hard to find, so I took what I could get.

Now that I have the tech experience, my opportunities are bountiful. I don't really want to job hunt again, but I'm going to be stuck at around my salary for as long as I'm at my current place. The most lucrative pay increases come by moving companies, sadly and I doubt that's going to change.

I too considered getting a Freightliner and starting to chase some Lot Lizzards but I feel like 18 hr drives through the fly over states on the reg will get old fast.

It was nice when it was only 30% of the job, it's very relaxing but does get boring. I think long haul over time would get old indeed.

[Desertbreh]

I am making roughly within 10% of 3 years ago... whereas a lot of other jobs really crept up... it is making me look as well as others. Hence the "great resignation".

110K with ZERO EDUCATION is kind of like Prudhoe Bay oilfield jobs in the 70s. Why go to college? It won't take you too long on your abacus to figure out how getting an apartment in Omaha, NE, getting this Wally World jerb at 21, then staying single, using birth control and driving the shit out of a Kenworth for 10 years could pretty much set you up for the long haul.

[ChrisoftheNorth]

If I wasn't married, I'd be a truck driver 100%. No joke, it's my perfect job.

I haven't had a meaningful increase in salary for 4 years now. I should have negotiated higher at my current job because I'm underpaid, but when I was searching, full remote jobs that I qualified for were REALLY hard to find, so I took what I could get.

Now that I have the tech experience, my opportunities are bountiful. I don't really want to job hunt again, but I'm going to be stuck at around my salary for as long as I'm at my current place. The most lucrative pay increases come by moving companies, sadly and I doubt that's going to change.

I too considered getting a Freightliner and starting to chase some Lot Lizzards but I feel like 18 hr drives through the fly over states on the reg will get old fast.

I'm built for life on the road. I've driven across the country more times than I can count now...even flyover country has its merits.