What an unusual market for cars | Tim speaks | Tim Hunt


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About This Blog: I am originally from Alameda County, grew up in Pleasanton and currently live in the house I grew up in which is over 100 years old. I spent 39 years in the daily business and wrote a column for more than 25 more… (More)

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Uploaded: Jul 26, 2022

This week, we bought out the lease on our 2019 Honda Accord.
We drove in and out of Dublin Honda a few times and were struck by the emptiness of the vast car parks. The same was true for other nearby dealerships. Our rep said there were no new Accords on the ground and almost everything from the manufacturer was already booked by customers who had put down a $5,000 deposit.
I had read about how weird the auto market was, but I saw it first hand. Our buyout price after three years was just under $16,000 for a car that was worth $30,000 or more as a used vehicle. Of course, if we did decide to sell it, what would we pay for a replacement and where would we find one would be two big open questions.
When was the last time you drove a car 20,000 miles and it was worth more as a used vehicle than it was when you drove it new?
This creates odd prices on the few new and used vehicles that dealerships have in stock. With used vehicles like mine now selling for more than they cost new, dealers are ignoring manufacturer’s suggested retail prices and marking up new vehicles, so there’s a reason to buy a car new rather than used. These markups, on low-priced vehicles, can range from $6 to $8,000. With the shortage of inventory, dealers are taking advantage because consumers simply don’t have a choice.
What a difference the pandemic and related supply chain issues have made in this industry, as well as many others.
In talking to the finance manager he estimated they had lost over two thirds of their sales volume and our sales rep said the team had shrunk by the same percentage as the dealership struggled to stay active in these truly strange times. The service department has been the only area that has provided steady cash flow, although if we hit a bad recession and cash gets tight, that could change as well.
If you have been After following the news, you’ve seen independent truckers doing their best to shut down operations at the Port of Oakland. They are rightly upset with the 2019 law, AB5, which sought to make site workers employees instead of independent contractors. It was led by Lorena Gonzalez, then a member of the Assembly, a labor organizer by profession who served in the Assembly. She pushed the bill through the Democratic-dominated Legislature and Governor Gavin Newsom signed it despite business opposition.
Remember, the Democrats’ closest allies and biggest funders are unions, and unions want more employees, which they believe will lead to more union members.
If you had enough political clout in Sacramento, you got an exemption like the real estate sales industry. Tell me the difference between a real estate broker and a court reporter or a freelance trucker, nothing but political juice. The truckers challenged the law all the way to the Supreme Court and lost. It is now ready to go into effect, and the governor and Gonzalez, now head of the California Labor Federation, have publicly rejected it and complied with it.
For truckers, there are no good options – if this drags on and has a substantial impact on port operations at the ports of Oakland and Southern California and hurts the economy, Newsom may intervene. be and will consider changing what is truly bad law. On Monday, truckers suspended their walkout and port activities resumed.

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