Car Prices Hit RECORD HIGHS & SHOPPERS REFUSE TO BUY | Episode 944
About this episode
Car prices have reached unprecedented heights, with the average transaction price for new vehicles surpassing $50,000 for the first time. As shoppers pull back from buying, manufacturers like Jeep are forced to rethink their pricing strategies, exemplified by a significant price drop for the Grand Wagoneer. The episode explores the implications of these trends on the automotive market, including rising monthly payments and the increasing average age of vehicles on the road, raising concerns about affordability and maintenance for consumers.
average transaction price
"average transaction price hits record high in September, surges past $50,000 for the first time ever. You and I have been keeping track of average"
The average transaction price is what people actually pay for new cars, which can be different from the sticker price. It helps show how much buyers are spending on vehicles.
The average transaction price refers to the average amount paid by consumers for new vehicles, which can differ from the manufacturer's suggested retail price (MSRP). This metric is important for understanding market trends and consumer spending in the automotive industry.
MSRP
"That's not average MSRP. That's average transaction price. I am so glad that I am so far below average."
MSRP is the price that car makers suggest you should pay for a new car. It's like a starting point for negotiations when buying a vehicle.
MSRP stands for Manufacturer's Suggested Retail Price, which is the price that the manufacturer recommends for a vehicle. It serves as a guideline for dealerships and consumers when buying a car.
Jeep Grand Wagoneer
"... shoppers didn't refuse to buy, in this case, the Grand Wagoneer, there's no reason for Jeep to drop the price by..."
The Jeep Grand Wagoneer is a large SUV that is designed for both luxury and off-road driving. It has a lot of space for passengers and cargo, making it great for families or trips, and it’s known for being tough and stylish.
The Jeep Grand Wagoneer is a full-size luxury SUV that combines rugged off-road capability with high-end features and technology. Revived in recent years, it aims to compete with other luxury SUVs while maintaining Jeep's iconic brand identity. The Grand Wagoneer is often discussed for its spaciousness and luxurious appointments, appealing to families and adventure seekers alike.
vehicle transaction price
"...Average vehicle transaction price, new car vehicle transaction price,..."
The vehicle transaction price is the final amount you pay when buying a car. It can be lower than the sticker price because of discounts or negotiations.
The vehicle transaction price refers to the actual price that a buyer pays for a vehicle, which may differ from the MSRP due to negotiations, dealer incentives, or market conditions. It reflects the final sale price after any discounts or fees.
automaker
"...they're not the only automaker who are going to have to reduce their MSRP's year over year,..."
An automaker is a company that makes cars. Examples include Ford, Toyota, and Honda.
An automaker is a company that manufactures and sells vehicles. This term encompasses a wide range of companies, from large corporations to smaller manufacturers.
Jeep Grand Cherokee
"...w Jersey. One of the first ones, if you've got a Grand Cherokee, Compass, Compass, no. I want to look, obviously..."
Jeep Compass
"One of the first ones, if you've got a Grand Cherokee, Compass, Compass, no. I want to look, obviously, we're talking about the Grand Wagoneer."
The Jeep Grand Cherokee is a type of SUV that is good for both driving on rough roads and for everyday use. It's known for being comfortable and having a lot of features.
The Jeep Grand Cherokee is a mid-size SUV known for its off-road capabilities and luxury features. It's popular among those looking for a versatile vehicle that can handle both rugged terrain and everyday driving.
market share
"they were losing sales and market share for years."
Market share is how much of the total sales in a market belong to a specific company. For car makers, it shows how popular they are compared to others.
Market share refers to the percentage of an industry's sales that a particular company controls. In the automotive context, it indicates how much of the total vehicle sales in a market are attributed to a specific manufacturer.
Stellantis
"Well, this is one of those instances where the manufacturer, Stellantis, is looking at their dealers who have those 2024s and 2025s still in stock and say,"
Stellantis is a big car company that makes several different brands of cars, like Jeep and Dodge. They were created when two companies merged together.
Stellantis is a multinational automotive manufacturer formed from the merger of Fiat Chrysler Automobiles and PSA Group. It encompasses a variety of brands including Jeep, Dodge, Chrysler, and Peugeot, among others.
Jeep Grand Wagoneer L
"that we're going to come out with a new Grand Wagoneer and Grand Wagoneer L, which was a sub-brand, didn't even list the name Jeep on it."
The Jeep Grand Wagoneer L is a longer version of the Grand Wagoneer, giving you more room inside for passengers and cargo. It's still a luxury SUV with lots of nice features.
The Jeep Grand Wagoneer L is an extended version of the Grand Wagoneer, offering more space and features. It aims to provide additional comfort and luxury for families or those needing extra cargo capacity.
sub-brand
"which was a sub-brand, didn't even list the name Jeep on it."
A sub-brand is like a smaller brand that is part of a bigger brand. It helps the company sell different types of products to different kinds of customers.
A sub-brand is a secondary brand under a larger parent brand, often created to target a specific market segment or to differentiate products. In this case, the Grand Wagoneer was marketed as a luxury vehicle separate from the standard Jeep lineup.
average new car transaction price
"...Today is a day where you have a record setting high, average new car transaction price."
The average new car transaction price is how much people usually pay when they buy a new car. It helps show how much cars cost these days.
The average new car transaction price refers to the typical amount paid for a new vehicle after negotiations and before taxes and fees. This figure can indicate market trends and consumer purchasing power.
light vehicle
"to buy a new light vehicle, light vehicle. We're not even factoring in the fact that a lot of people buy trucks and bigger vehicles."
A light vehicle is a type of car or small truck that isn't too heavy. It's usually what most people drive every day, like sedans or compact SUVs.
A light vehicle typically refers to passenger cars and smaller trucks that have a gross vehicle weight rating (GVWR) of 10,000 pounds or less. This classification is important for understanding regulations and market trends in the automotive industry.
financing
"they have to finance it. And in many cases, they're financing it for 72 or 84 or 96 months, which is just insanity."
Financing is when you borrow money to buy a car and pay it back a little bit each month. It's a way to afford a car without paying all the money upfront.
Financing a vehicle means taking out a loan to pay for it, which is common when the purchase price is high. Buyers typically repay the loan in monthly installments over a set period, which can range from a few years to several years.
months
"they're financing it for 72 or 84 or 96 months, which is just insanity."
Months are used to describe how long you have to pay back the money you borrowed for the car. The longer the time, the smaller the monthly payments, but you might pay more in interest overall.
In the context of vehicle financing, the term 'months' refers to the duration over which the loan is repaid. Common loan terms for car financing can range from 36 to 96 months, affecting the monthly payment amount and total interest paid.
Mazda 3
"...even more for you. You can see here, it's a 2018 Mazda 3. Yes."
Mazda is a car brand from Japan that makes a variety of vehicles. The Mazda 3 is a smaller car that people like because it’s fun to drive and looks good, making it a popular choice for many drivers.
Mazda is a Japanese automaker known for producing a range of vehicles that emphasize driving enjoyment and innovative design. The Mazda 3, in particular, is a compact car that has received praise for its sporty handling and stylish appearance. Discussions about Mazda often highlight its commitment to quality and performance in a competitive market.
interest rate
"I mean, the egregious part is 29.99% interest rate, but it's also a 75-month car note."
The interest rate is how much extra money you pay when you borrow money to buy a car. If it's high, you'll end up paying a lot more than the car's price.
The interest rate is the percentage charged on a loan for borrowing money. A higher interest rate means more money paid back over time, which can significantly increase the total cost of a car loan.
aging inventory
"So if you think about an aging inventory, an aging fleet in the United States, the concern there is when someone's financed in this type of way."
Aging inventory means cars that have been sitting unsold for a long time. This can make them less valuable and riskier to buy.
Aging inventory refers to vehicles that have been on a dealer's lot for an extended period, potentially leading to decreased value and increased financing risks for buyers.
total cost of a car loan
"but they're paying back $23,000. Yes."
The total cost of a car loan is how much money you end up paying for the car after including the extra fees and interest. It can be much more than the car's sticker price.
The total cost of a car loan includes the principal amount borrowed plus the interest paid over the life of the loan. It can significantly exceed the original price of the vehicle depending on the interest rate and loan duration.
mechanical breakdown protection
"but then they added fees and the car. They had a mechanical breakdown protection."
Mechanical breakdown protection is like insurance for your car that helps pay for repairs if something goes wrong with the engine or other important parts.
Mechanical breakdown protection is a type of insurance or warranty that covers the cost of repairs for mechanical failures in a vehicle. It can provide peace of mind for owners, especially for older cars.
cost of ownership
"...I want to go to cost of ownership and I want to click on maintenance."
Cost of ownership is how much money you spend to own a car, including buying it, fixing it, and keeping it running.
Cost of ownership refers to the total expenses associated with owning a vehicle, including purchase price, maintenance, repairs, insurance, and fuel costs over time.
maintenance
"...I want to click on maintenance. Yes. And now I can see a Mazda Mazda 3 will cost about $5,964..."
Maintenance is the work you do to keep your car in good shape, like changing the oil or fixing brakes.
Maintenance involves routine services and repairs needed to keep a vehicle running smoothly, such as oil changes, tire rotations, and brake inspections.
major repair
"...what's the likelihood of a major repair. When we get out to year 11, it's one in four chance, 25% chance."
A major repair is a big fix that costs a lot of money, like fixing the engine or transmission in your car.
A major repair refers to significant repairs that can be costly and may involve critical components of the vehicle, such as the engine or transmission.
auto loan
"...the bank will just keep approving you for that next auto loan. Got to keep the lights on, man."
An auto loan is money you borrow to buy a car. You pay it back over time, usually with extra money added for interest.
An auto loan is a type of financing specifically used to purchase a vehicle. It allows buyers to borrow money from a lender to pay for the car, which is then paid back over time with interest.
SUV
"...$85,000 American truck and SUVs are absurd."
An SUV is a big car that can carry more people and stuff. It's often used for family trips and can drive on rough roads.
An SUV, or Sport Utility Vehicle, is a larger vehicle designed for both passenger and cargo space, often with off-road capabilities. They are popular for their versatility and higher seating position.
Porsche Boxster
"..., a nice truck was half as nice as a new Porsche Boxster. Now, almost the same."
The Porsche Boxster is a sporty car made by the luxury brand Porsche. It's designed to be fun to drive and is often talked about because it combines good looks with great performance, making it a popular choice for car enthusiasts.
The Porsche Boxster is a mid-engine sports car that has been a staple in Porsche's lineup since its introduction in the late 1990s. Known for its agile handling and performance, it represents a more accessible entry point into the Porsche brand compared to its more expensive siblings. Discussions about the Boxster often highlight its balance of luxury and sportiness.
Lincoln Corsair
"...Appreciate this. No more Ford Escape and Lincoln Corsair after 2026. I didn't read that."
The Lincoln Corsair is a fancy SUV made by Lincoln, which is a luxury brand. It’s designed to be comfortable and stylish, and it has lots of high-tech features that make it appealing to people looking for a nice vehicle.
The Lincoln Corsair is a luxury compact SUV that was introduced in 2020 as a replacement for the Lincoln MKC. It offers a blend of comfort, technology, and upscale features, making it a competitive option in the luxury SUV market. Discussions about the Corsair often revolve around its design and the brand's shift towards more modern offerings.
Ford Escape
"Appreciate this. No more Ford Escape and Lincoln Corsair after 2026. I didn't read th..."
Toyota Prius
"... $34,000 out-the-door price on a 2026 nightshade Prius. Invoice price is $32,871."
The Toyota Prius is a type of car that uses both gas and electricity to help save on fuel costs and reduce pollution. It's known for being very efficient and is often chosen by people who want to be more environmentally friendly.
The Toyota Prius is a hybrid vehicle that has become synonymous with fuel efficiency and eco-friendliness since its debut in the late 1990s. It features a unique design and advanced technology that allows it to use both gasoline and electric power, making it a popular choice for environmentally conscious drivers. The Prius is often discussed in the context of its affordability and practicality in the hybrid market.
invoice price
"...Invoice price is $32,871."
Invoice price is what the car dealer pays to get the car from the manufacturer. It’s usually less than the price you see in the store, and it can help you negotiate a better deal.
Invoice price is the amount that a dealer pays the manufacturer for a vehicle. It can be lower than the MSRP and is often used as a negotiation point when buying a car.
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