Spent a year investing in U.S. stocks and earning less than a friend buying a car

Year-on-year inflation surged to 8.5 percent in March, a 40-year high, according to data released by the U.S. Department of Labor. In this regard, Li Ming (pseudonym), an engineer who has just raised his salary, finally feels a little more comfortable. Although his US stock investment is still in “blood loss”, the salary increase has caught up with inflation. But soon, this comfort was shattered by the news of Tesla’s successive price increases.

In April last year, Li Ming once ordered a long-range version of the Tesla Model Y with a friend, but because he felt that it was too troublesome to modify the electric pole, and there was no shortage of cars at home at that time, Li Ming finally canceled the subscription. But I didn’t expect that in the past year, Tesla’s car price has been flying all the way, from the early $50,000 when he ordered it to the recent $62,990, and the cumulative price increase has exceeded 25%.

After returning the car last year, Li Ming rushed into the US stock market with the money to buy the car and invested in a number of technology-based growth stocks. Now that a year has passed, Li Ming’s tens of thousands of dollars have shrunk by about 20%, and his friends have been driving around with Model Y for $50,000. A friend also told him that if he sold this Model Y now, it might be much higher than the current price of 63,000, because the market is currently in short supply and there is no car available anywhere. The car has to wait at least half a year.

Li Ming thought to himself, “I should have known that Tesla’s cars have risen like this, and what stocks should I invest in? It’s better to order a few more cars last year.”

In fact, it’s not just Tesla. Under the double shock of inflation and the supply chain, prices in the entire North American auto market have been wildly higher in the past year. New cars, used cars, as long as they are cars, they are all being looted.

The price rises to “no one”, waiting for the car until the heart is broken

It must be admitted that among the car brands, Tesla has definitely won the most attention with its shocking price adjustment frequency and magnitude. After all, it has adjusted prices more than 10 times a year, and even increased it three times in a week. , it is the only one. Remember how much the Model Y cost when it first launched three years ago? Prices start at just over $39,000. Not only Model Y, but Model 3 has also skyrocketed, from less than $30,000 after energy subsidies when it was released in 2016, all the way up to a minimum of $46,990 today.

U.S. prices for Tesla Model Y, Model 3 as of April 15

However, in addition to Tesla, which has a C-rank price increase, other car brands are actually raising prices silently. There are many stories of consumers who can’t catch up with the increase and can’t wait for their car.

In April last year, Wang Qing (pseudonym), who just found a job, was going to buy a 2021 Toyota Camry SE to commute to and from get off work. At that time, she found a car dealership and asked for the lowest price in the early $25,000, with $1,300 left. The discount rebate and the 60-month loan with 0 interest rate, but because she only joined the job at the end of July, she was not in a hurry to start. But when she looked at it again in June, the price was $26,000, the discount was gone, and the loan interest rate was as high as 4%. By the end of July, sales told her the price would need to rise above $30,000 if she wanted to pick up the car as soon as possible.

In total, even though they bought the same car, Wang Qing had to pay more than $6,000 in just over two months. However, the situation that was expected to ease in the second half of the year has not appeared. Since July last year, the price of this car has remained high and even thousands of price increases cannot be bought.

“In the past, general car sellers would give buyers some discounts or discounts. In the past, they would only add market adjustment fees to limited or special models. However, in the past year, due to the low inventory of new cars, there are generally existing cars that are sold out. It will be bought immediately, and it is difficult for buyers to enjoy any discounts. If there is any new car that does not need to be bought at a price increase, it is already very rare.” A car salesman told Silicon Stars.

In October 2019, buyers paid an average of about 4 percent less than the suggested retail price, according to auto market researcher Cox Automotive. In February of this year, the actual price of a new car in the United States was 2% higher than the manufacturer’s suggested retail price, and the average incentives on car sales also fell to a 20-year low.

For the auto industry, the last year has been a proper seller’s market. Amid supply chain shortages and limited supply of chips, many automakers have prioritized larger, more profitable vehicles over lower-margin compact models. Popular and cost-effective scooters like Toyota Camry and Honda Civic are hard to find. The data showed that the average price of a new car in December last year had risen to $47,000. Consumers couldn’t help but post and complain, why are the cars on the market now starting at $50,000, and they can’t afford it.

In addition to needing to pay a higher price to buy a car, many consumers wait until the end of the day to pick up the car. For example, if you want to order the basic models of Tesla’s Model 3 and Model Y, if you don’t add any upgraded configuration, you must be prepared to wait for the next year at least. Even if you spend more money to add configuration, it will Have to wait about half a year. In addition, the pickup cycle of some popular models of other brands is at least half a year, and even more exaggerated, it even takes three or four years.

It is reported that the delivery cycle of Mercedes-Benz G-Class off-road vehicles has recently been extended to about 3 years, and it has stopped accepting new orders since the beginning of this year. Toyota also recently released an “apology message” on its official Japanese website, stating that customers who booked after January 19, 2022, due to the popularity of the latest 2022 Land Cruiser in Japan and around the world, Delivery time may be up to 4 years.

Wait 4 years? Maybe self-driving cars have become mainstream.

According to statistics from Cox Antomotive on February 21 this year, the current inventory of new vehicles in the United States has decreased by 60% from a year ago to only 1.1 million vehicles, while the total inventory of electric vehicles and hybrid vehicles is only 25,000. So if you want to buy a new car, otherwise you will calm down and wait, or you will increase the price crazy.

“Recently, many friends around me will book several cars at the same time. It’s okay to lose a deposit. I’m afraid that I won’t be able to buy it. I ordered a Toyota Sienna and a Tesla Model Y at the same time last November, and now the Sienna is still a long way off. , Model Y will be at the end of this year, whichever comes first.” An engineer who wants to buy a new car told Silicon Stars.

Crazy second-hand car market, small broken cars have become sweet

The lack of new cars in the market, especially the lack of cost-effective practical models, has also directly led to the soaring prices of used cars in North America. According to the statistics website Cargurus, as of March 22, the average purchase price of a second-hand car in the United States has exceeded $30,000, an annual growth rate of 32%, which is 42% higher than the level before the epidemic in January 2019. %, it can be said to kill a lot of financial products in seconds.

Among the brands, the lower the price and the more cost-effective the car, the greater the price increase. For example, Kia’s used cars have increased by an average of 48.83% in the past year, Honda has increased by 40.66%, and Toyota has increased by 35.71%. In contrast, some high-end luxury car brands are relatively flat, with Bentley up only 15% and Ferrari up 7%.

The price changes of each used car model in the past year, the picture is taken from cargourus

In terms of models, vans such as Honda Odyssey and Kia Carnival (Van & Miinivan) are the most sought after, with an increase of more than 45% in the past year, followed by hatchbacks (Hatchback) with an increase of 41%. Sedans also rose more than 36%.

A netizen said that he was going to sell his Nissan Amanda SUV. He consulted some car dealers for the first time in March last year, and the highest price he received was $19,000, because his psychological price at that time was 20,000, so there is no sale. In July, the car dealers he had consulted before called him to ask if his car was sold, and the highest price given was 29,000. In other words, his car has been driven for half a year, and the depreciation has increased, and it has actually risen by 10,000 US dollars.

Today, a used 2021 Camry with 10,000 miles on it sells for $31,000 on the Cars vehicle sales website. Remember the price of this new car we mentioned earlier in May last year? $25,000, plus $1,300 in cash back.

Image taken from Cars.com

The same “good luck” also fell on a friend who bought a used car before the beginning of last year. Someone bought a BMW X3 for $25,000 at the beginning of 2020, drove it for two years and drove 10,000 more miles. After he heard about the price increase of used cars recently, he looked on CarMax and found that his car is now valued at 2.8 $10,000, so he drove it for free for 2 years and earned $3,000.

The reasons for the soaring prices of new and used cars are mainly from two aspects: one is the shortage of the automobile manufacturing supply chain, and the other is the rise in prices due to inflation. Recently, there is news that even the price of Michelin tires will increase in North America from April 1, with an increase of at least 5%.

So, will such a hard-to-find situation continue this year? With supply expected to remain tight in 2022, full-year new vehicle production will be cut by 3 million units, so there will be little relief from high new-vehicle prices, according to new research from Cox Automotive. But the good news is that the previously over-increased used car prices seem to have shown a downward inflection point after a year of market digestion.

The U.S. used-vehicle index has fallen for two straight months after hitting a record in January, according to the Mannheim Used-Car Value Index, which tracks wholesale prices of used cars for sale at U.S. auto dealers in real time. Compared with the entire month of February, wholesale used car prices fell 3.3% in March. All major segments, except vans, experienced seasonally adjusted price declines, with SUVs seeing the largest declines.

The index also said prices for older used cars are likely to stabilize and fall more than newer used cars, with the average wholesale price of used cars three years old falling 2.9% in the entire month of January.

Mannheim Used Car Value Index as of March 2022

Overall, friends who want to buy new cars from popular brands may still be in a long wait in 2022. The prices of used cars may not see the same surge as last year, but the supply of cost-effective used cars is still tight. .

“It doesn’t matter what kind of car he is, for people like us who just need it, it is most important to buy a car and drive it within the budget.” A car-free person who has been looking at the car market for a long time said.

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