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I may find myself near the end of a lease and needing a different car (new or used) in 2009 and since a car can be a sizable investment I am looking for some good "strategery." I agree with EJ's "pay cash for cars" mantra so will be trying to keep the cost under about $10,000. My preference is a SUV or Jeep style vehicle.
Any ideas of what companies might be most likely to have a fire sale? Timing?
Regards,
snip3r
Dear sn1p3r,
The Great American FIRE Economy Sale began in 2006 when the housing market rolled over. The asset price deflation spilled over into the Productive Economy in 2007, creating the recession we forecast. 2008 marked the start of debt deflation in the US, and the Debt Deflation Bear Market we forecast Dec. 27, 2007. The Consumer Goods Fire Sale of 2009 will follow on the FIRE Economy Sale in inflated assets that began in 2007.
When it comes to cars specifically, the Consumer Goods Fire Sale will last for years.
Here's an example of what's going on.
When it comes to cars specifically, the Consumer Goods Fire Sale will last for years.
Here's an example of what's going on.
Auto dealership troubles ripple across the region
Dec. 22, 2008 (Boston Globe)
Federal bailout expected to do little to stem local closings; state and municipal tax revenue will continue to feel pinch
South Shore Buick is just one of more than 40 new-car dealerships in the state that have gone out of business this year, according to the Massachusetts State Automobile Dealers Association. There are now 462, down from 533 at the beginning of 2007. Across the country, the National Automobile Dealers Association estimates, there will be 900 fewer dealerships this year than last, and a net loss of 1,100 in 2009.
"It's the same phenomenon you see in almost everything else - there are too many car dealers, there are too many shopping malls, and there are too many hotels," said Michael E. McGrath, an author and business consultant based in Boston who has advised the automotive industry. "Dealers are trying to cope with the fact that people simply don't have any money."
Dec. 22, 2008 (Boston Globe)
Federal bailout expected to do little to stem local closings; state and municipal tax revenue will continue to feel pinch
South Shore Buick is just one of more than 40 new-car dealerships in the state that have gone out of business this year, according to the Massachusetts State Automobile Dealers Association. There are now 462, down from 533 at the beginning of 2007. Across the country, the National Automobile Dealers Association estimates, there will be 900 fewer dealerships this year than last, and a net loss of 1,100 in 2009.
"It's the same phenomenon you see in almost everything else - there are too many car dealers, there are too many shopping malls, and there are too many hotels," said Michael E. McGrath, an author and business consultant based in Boston who has advised the automotive industry. "Dealers are trying to cope with the fact that people simply don't have any money."
As unemployment rises, consumers will have even less money to spend on cars.
Let's skip over the next few years and jump all the way to the bottom of the Depression:
All this spells big bargains in new and used cars next year. Look for two-for-one sales and absurd discounts.
Even now, before the expected rise in unemployment, we have received a rash of anecdotal evidence of bargains, such as a friend of iTulip reporting yesterday that they purchased last week a two year old Mercedes off lease with less than 20,000 miles that sold new in 2006 for $85,000. What did our friend pay? Wait for it... $22,000.
We bet that if you wait until next year, you will be able to get a wide range of very good cars for your $10,000. If you can wait, we recommend it.
iTulip Select: The Investment Thesis for the Next Cycle™Let's skip over the next few years and jump all the way to the bottom of the Depression:
- The volume of unsold cars is now so large it is best measured in acres of lot space required for storage. Reuters reports that at the Long Beach, California port, "Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres." By the end of 2009, even though few new cars will be shipped to US ports, that inventory will hardly have been worked down at all, owing to the glut of good and very cheap used cars on the market.
- Tens of thousands of companies will go out of business in 2009, putting thousands of used leased cars on the market.
- Hundreds of thousands of households will be unable to make lease and loan payments, putting a few hundred thousand more used cars up for sale.
All this spells big bargains in new and used cars next year. Look for two-for-one sales and absurd discounts.
Even now, before the expected rise in unemployment, we have received a rash of anecdotal evidence of bargains, such as a friend of iTulip reporting yesterday that they purchased last week a two year old Mercedes off lease with less than 20,000 miles that sold new in 2006 for $85,000. What did our friend pay? Wait for it... $22,000.
We bet that if you wait until next year, you will be able to get a wide range of very good cars for your $10,000. If you can wait, we recommend it.
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