OT: Cost of Living and new cars/trucks...

[Tickdoc]

Originally Posted by BobbyJones

Better explanation, maybe?:

If manufacturer A is selling a healthy chunk of their pickups to a market that is essentially getting a 30% discount (and NEEDS those pickups as equipment), there's definitely an opportunity to maintain and raise profit margin, setting a new price floor on real cost for the other buyers who WANT the pickups.

They sure as heck aren't giving discounts to those who don't get the write-offs.

It's no secret that the trucks are incredibly profitable. I just wonder if there's more at play in the pricing than economies of scale and simple consumer demand.


That's all. Just a curiosity from the uninformed.

Wait a minute....the discounts are not necessarily discounts but tax advantaged write-offs, at least in my experience.

First 179 purchase I made was at cost, no discount...I more than made up for that in the write off which was huge back then (2006?) My accountant brokered the sale to be as much as the car was worth to maximize the wrie-off.

[BobbyJones]

Originally Posted by Tickdoc

Wait a minute....the discounts are not necessarily discounts but tax advantaged write-offs, at least in my experience.

First 179 purchase I made was at cost, no discount...I more than made up for that in the write off which was huge back then (2006?) My accountant brokered the sale to be as much as the car was worth to maximize the wrie-off.

Correct. Hope it's understood that I see a "tax advantaged write-off" as "essentially a discount".

[C40_guy]

Originally Posted by Tickdoc

Wouldn't think it would have much effect.

I have taken advantage of this in the past but I have to admit I don't feel good about it because I don't need that large of a vehicle.

IDK. I just parked behind a Macan and it looked so small as compared to my C5 allroad. The Cayenne feels like the right size to me, maybe because the allroad's stablemate has been a Touareg and lately a Q7.

Or a Cayman. Something with a C. Right?

(bridging multiple threads here, apologies to those who are not multithreaded...)

[p nut]

Base cars come with more features than “Limiteds” did years ago. I bought a new F150 a couple years ago. Base model, with very few options. Still has Apple Car Play, auto high beams, pre-collision alert, gigantic screen, Bluetooth, all sorts of usb plugs, etc. One of the safest vehicles as well. All at a lower relative cost than my father’s Ford was back in the 90’s. (I paid low $30k’s).

[C40_guy]

Originally Posted by BobbyJones

Better explanation, maybe?:

If manufacturer A is selling a healthy chunk of their pickups to a market that is essentially getting a 30% discount (and NEEDS those pickups as equipment), there's definitely an opportunity to maintain and raise profit margin, setting a new price floor on real cost for the other buyers who WANT the pickups.

They sure as heck aren't giving discounts to those who don't get the write-offs.

It's no secret that the trucks are incredibly profitable. I just wonder if there's more at play in the pricing than economies of scale and simple consumer demand.

A chunk of their market is not getting the pickups at a discount. That market is getting a subsidy. The amount of money paid by each buyer is roughly the same.

Where the subsidy comes into play is that it affects demand. The price of the vehicle is *effectively* lower for some buyers, which increases demand for the trucks and which *potentially* drives prices up for scarce resources (number of trucks.) On the other hand, the higher volume allows the manufacturer to enjoy increased economies of scale, which should bring costs (and prices down.)

Now, the important question is...do these trucks have roof rails or do you need Thule or Yakima fit kits to mount bike racks.

[BobbyJones]

Circles!

On the other hand, anyone have access to IHS Automotive MarketInsight?

Originally Posted by C40_guy

A chunk of their market is not getting the pickups at a discount. That market is getting a subsidy. The amount of money paid by each buyer is roughly the same.

Where the subsidy comes into play is that it affects demand. The price of the vehicle is *effectively* lower for some buyers, which increases demand for the trucks and which *potentially* drives prices up for scarce resources (number of trucks.) On the other hand, the higher volume allows the manufacturer to enjoy increased economies of scale, which should bring costs (and prices down.)

Now, the important question is...do these trucks have roof rails or do you need Thule or Yakima fit kits to mount bike racks.