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GM Signals That Higher Average Transaction Prices Are Here To Stay

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Quote:

“Every time you spend money, you're casting a vote for the kind of world you want.”

Anna Lappe

 

So simple and so true.

 

so long

j-ten-ner

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I haven’t seen it yet in the way I had bought trucks. Usually longest on the lot or end of the model year. Example when I bought my 14. It was on 12-13-13. It was a 40K truck for 27K, longest on the lot. The same dealer this year had SLTs end of models runs for 32K. It will be interesting to see what the 19s discounts will be in September.


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On 5/2/2019 at 9:47 AM, Chris walker said:

Im not sure its wise to advertise that tactic. To me its basically stating their sales strategy is to offer a less competitive truck at higher prices because your loyal buyers will keep buying.

 

Am I missing something?

Ive has some issues with this 2017 and its unlikely that my next vehicle will be a GM. There are better built vehicles with better options for the same or less price

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15 hours ago, Grumpy Bear said:

I'm pretty sure I'm just done. Price increases since I bought my 2015 are...….can't find the right words. Lock me out of my PCM, BCM and TCM? I bough it. I own it. End of story. Got rid of everything I have an interest in buying. RCSB. Full sized FAMILY cars. Eliminating what I want to PUSH me toward higher margins only pushed me to used. The idea that if one thing is all I have to choose from will get me to buy that one thing? Think again. I still have two feet and like walking. Cheaper and  more healthful too. Strong arm me? Get a grip! :fume:

and even then, with used car demand and people wanting a king's ransom for a clapped out pile of crap with WELL over 200K on it, its actually pushing some buyers out of the car market ENTIRELY.

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1 hour ago, truckofwinandawesome said:

and even then, with used car demand and people wanting a king's ransom for a clapped out pile of crap with WELL over 200K on it, its actually pushing some buyers out of the car market ENTIRELY.

Yeah, I bought a new 2019 because the prices for used K2s with less than 30K miles was just goofy. I bought new within $5000 of what was being asked for 2017/2018s. 

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Let's make the trucks noticably cheaper inside, increase the price and brag about how much more profit we are making per unit. 

 

Great long term strategy.  

 

It shouldn't be surprising that when you increase the price you should also increase the quality.  They've been getting blasted for a cheap interior.  

 

So. Oblivious.  

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Posted (edited)

If GM kills their truck market, the company will fail overnight. And they are well on their way to doing it. MSRP's can not increase by 20% every time you put new body metal on your trucks. I wont pay it anymore. I paid $37cad for an SLT in 2010, my 2015 was worth $53k all in, now the same truck is MSRP of 73,000, I would be lucky to get out the door for $65,000 and I wont pay that, no way. My wage doesn't increase 5% per year, so I believe it is a bit excessive to ask that we pay these astronomical prices for arguably worse quality products. None of these trucks will last 20 years like the 98 Silverados still going down the road today, the paint fell off my 2010, now its falling off my 2014 already and now we have shakey pieces of garbage with less than adequate computer hardware that constantly screws up and needs updates. Are you going to ask for software update on your 2014 in 2027? Not likely. Charge more, deliver less sounds like a pretty good recipe for failure to me. I wont downgrade from my SLT's to a WT so I am just not going to buy trucks for personal vehicles anymore. I have a work truck, I will trade my summer truck in and buy a sports car. Cheaper to buy a 1LZ Z06 than a SLT Carbon Pro, that is insane. Mary Bara can **** off at anytime before she runs this company into the ground if she hasn't already.  They want us to pay $70,000 for something that is worth $12,000 in  5 years, if we don't pay these prices, they will have no choice but to drop the prices, or drop dead as a business. But our corrupt politicians would just bail them out again with our money, so pay GM now, or pay them when they fail again...

Edited by L86 All Terrain
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L86, as much as I agree with the point you're making on the basis of sensibility, I think the reason GM (and Ford... they are pretty bad at boosting their margins as well!) can keep getting away with big MSRP increases against a much more modest increase in wages is due to modern financing. 

 

You can finance vehicles now for up to EIGHT YEARS. It's insane. 

 

There are many out there who will finance the $73K MSRP truck you speak of almost entirely. And when you do that over 84 or 96 months, the payment can be reasonably the same (or even less!) as it was on your 2015 truck that MSRP'd for $50K. 

 

The only corrective force here is not buyers walking from GM, it's a market downturn that tightens credit across the board, like it did in 2008/9... when GM was paying people to take brand new trucks off the lots. 

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I needed a truck for work. My wife drove two door cars mostly with three kids. They were impalas or equivalent. I think if it was today it would be that new V-8 camaro or equivalent for around 35K. She’d probably pick the stick.


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11 minutes ago, econometrics said:

L86, as much as I agree with the point you're making on the basis of sensibility, I think the reason GM (and Ford... they are pretty bad at boosting their margins as well!) can keep getting away with big MSRP increases against a much more modest increase in wages is due to modern financing. 

 

You can finance vehicles now for up to EIGHT YEARS. It's insane. 

 

There are many out there who will finance the $73K MSRP truck you speak of almost entirely. And when you do that over 84 or 96 months, the payment can be reasonably the same (or even less!) as it was on your 2015 truck that MSRP'd for $50K. 

 

The only corrective force here is not buyers walking from GM, it's a market downturn that tightens credit across the board, like it did in 2008/9... when GM was paying people to take brand new trucks off the lots. 

Yeah, I cant believe people do those deals. By the end of your payment terms your warranty is gone, you have may have had to put in a $5,000 transmission or $12,000 engine in at your own cost at that point, now you are still paying $1,000/month on a rusted out sh!tbox that you wont even get $10k on trade for. I always pay 40-50% upfront and keep my payments down to 500/month. Trade them in for 60% of the MSRP in 5 years, recycle the growing down payment. Not anymore. I refuse to pay over 60,000 for a 1/2ton, especially with drastically reduced reliability and overall quality. 

 

GM likes those deals because they know you will be in there in 5 years to trade up because the truck is shot, so they take your 3 years left of your payments, and add them on to your new 8 year plan so now you pay $85,000 for a LT instead of 45,000. 

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2 minutes ago, L86 All Terrain said:

I always pay 40-50% upfront and keep my payments down to 500/month. Trade them in for 60% of the MSRP in 5 years, recycle the growing down payment. Not anymore. I refuse to pay over 60,000 for a 1/2ton, especially with drastically reduced reliability and overall quality. 

 

GM likes those deals because they know you will be in there in 5 years to trade up because the truck is shot, so they take your 3 years left of your payments, and add them on to your new 8 year plan so now you pay $85,000 for a LT instead of 45,000. 

Yeah, I used to be a "pay cash, own it till it can't go any more, repeat." person. But now with the new technology in the trucks (and cars), I've changed my mind on that. I'm moving to a 3-5 ownership and trading on that cycle. 

 

I personally feel it's less about the reliability of the truck - I think they will be great for a long time - but more for the fact that you really lose value after 7 years. By that time, the model/platform is really outdated and the tech is so behind that you're not getting much privately or trade-in. We live in a different age where our vehicles are basically computers with wheels now. 

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There’s a way around all that. Buy a leftover work truck and build it yourself. The last ride I bought all the sales person wanted to talk about was CarPlay. All I cared about was blue tooth. You can buy that aftermarket too. A friend of mine has to have a sun roof. She like base model cars, she gets her roof aftermarket. The only reason there’re charging so much is people are paying it.


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Posted (edited)
20 minutes ago, econometrics said:

Yeah, I used to be a "pay cash, own it till it can't go any more, repeat." person. But now with the new technology in the trucks (and cars), I've changed my mind on that. I'm moving to a 3-5 ownership and trading on that cycle. 

 

I personally feel it's less about the reliability of the truck - I think they will be great for a long time - but more for the fact that you really lose value after 7 years. By that time, the model/platform is really outdated and the tech is so behind that you're not getting much privately or trade-in. We live in a different age where our vehicles are basically computers with wheels now. 

You're right they are computers on wheels, what do we know about computers? You throw them in the dump in 4 years and buy another. These trucks already aren't great right off the lot, never mind 10 years down the road. My 2015 has been at the dealer 500% more than my 2010 was. In 5 years I changed a trans dipstick tube under warranty on my 2010 that's it, my 2015 has had 5 trans updates, a new torque converter, and now a reman transmission, had some computer glitches which was a bad ground, my 2014 shakes and the paint is falling off worse than a 10 year old truck, new front end at 110,000km, AFM failed, Trans locks itself in 2nd gear at random and GM told me they don't know how to fix that trucks problems, most of the parts have China cast into them. They truly are garbage quality units, the worst GM has ever put out by far. GM had 5 brands in the top 10 of the JD Reliability test in 2012, they might have 1 brand in there now if even that. Nicest looking trucks since 1958, most comfortable to drive (when not shaking), but I will admit they are also the worst long-term ownership quality since then too. I both love and hate my K2's if you cant tell, too much of the hate to pay $70,000 for another turd, even if said turd is shiny, pretty and powerful. I want K2 looks, with GMT900 reliability with OBS quality.  

Edited by L86 All Terrain

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Been driving Chevy or GMC’s since 1975 (I’m 73).  Always a regular cab short wheelbase stick shift with floor mounted transfer case shifter.  But no more.  Priced me out of the market - i’m Not spending $50,000 + for an oversized electronic land yacht to beat up rock crawling.  First GM dumps the stick shift, then the reg cab SWB.  2019 reg cab has a once speed transfer case.  They don’t offer what I need for off roading and priced me out of the market.

 

Having said all that, Tipotex Chevrolet has a 4cyl stick shift 2wd Colorado on the lot for about $19,000that I have my eyes on.  Probably the last of the stick shifts as GM has discontinued that in the Colorado line.  But it’s not 4wd.  

 

My $.02 rant for this morning.

 

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Just bought a 2019... and it had the standard $10k off MSRP.  Pretty comparable to the 2017 I traded in, and my out the door price was about the same.

 

I don't think they can keep up the high transaction price once all the discounted 2018's get sold off, all trims become widely available and these trucks start filling up lots.  I was looking at a Sierra instead of the Silverado, but couldn't find anything much below a SLT, so went Chevy.

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