
Car Leasing Dilemma:
- Michael is considering ending his lease early and looking for deals.
- He reached out to the dealership and they told him it's cheaper to build a new car through Ford than to buy one from their lot.
Impact of Interest Rates on Leases:
- The average auto loan rate in the country is around 9.5% and impacting leases as well.
- Leases are down, with leasing accounting for only one out of every five new cars today compared to one out of three in 2019.
Reasons for Expensive Cars:
- Consumer preference for larger SUVs and more features has increased prices.
- Car prices have been on the rise, with the average new car costing almost $50,000.
Effects of Lower Interest Rates on Used Cars:
- Used car prices have also increased by about 45% since 2019 due to limited supply and higher demand.
- People are holding onto their cars longer, with an average holding period of around 13 years.
Popularity of Electric Vehicles (EVs):
- EV market share has been increasing steadily since 2020, reaching around 7% of new sales.
- Tesla outsold Toyota for the first time ever in California.
Tesla's Pricing Strategies:
- Elon Musk has made significant price reductions on Tesla models throughout the year.
- These aggressive pricing moves could potentially impact competitors and make it harder for them to enter the market.
Carvana's Performance:
- Carvana stock has seen significant growth this year, but there are concerns about its balance sheet and long-term viability.
- Carvana currently sells Teslas at higher prices than new ones due to recent changes in pricing dynamics.
Future Changes in the Car Dealership Industry:
- The industry continues to evolve, driven by factors such as manufacturer involvement and changing consumer demands.
- Good dealerships that offer value through strong customer experience will thrive while inefficient operators may face consolidation or buyouts.