Blog

Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large.

Beg some asshole

On a recent perusing of Reddit, I encountered a discussion about how difficult it still is to buy a new car these days. Inventories remain low, therefore dealership markups are still a thing to contend with. Basic supply and demand: whichever party has the power can dictate the terms.

Of course, that doesn’t mean people can’t complain about it. Especially those who want to buy a new car, but not exactly in a hurry to do so. These buyers can wait it out and try different dealerships to get the best price possible. But that in itself can be a time consuming, frustrating process. You’re begging people to shut up and take your money, yet they won’t do it. One Reddit commenter summed it up perfectly: “I just fundamentally can't bring my self to go beg some asshole to take my 60K.”

I think that is a big reason why the Tesla Model Y is the best selling vehicle - in the world - for the first quarter of 2023. Tesla sells cars directly to the customer, one price (that can change periodically), no markups or discounts. You can do the entire transaction on your smartphone, never needing to talk to a dealership salesperson. There isn’t a finance manager to upsell you on extended warranties either. In a time when when finding a car at MSRP is akin to hitting the lottery, the Tesla method of selling is highly attractive.

The pendulum will eventually swing back in the customer’s favor. Unless the traditional automaker constrain supply intentionally. That would be too cynical. I don’t think the automakers can sell (especially) electric vehicles while still relying on the dealership/markups method. Tesla’s direct-sale model will simply continue to eat their proverbial lunch. Those with the money and patience want low hassle above all else.

Something with more utility

I always thought that if I were to ever get a second car, it would also be something of the sporting variety. Something to compliment my rear-wheel drive BMW M2. Perhaps a front-wheel drive Honda Civic Type R, or an all-wheel drive Toyota GR Corolla. Because every car guy should have examples of each drivetrain style, am I right? I’ve already done the engine in at the back of the car thing…

Lately however I’ve been slightly frustrated by the lack of utility with my M2. Sure there’s a normal size trunk at the back, but the opening is on the small side. Bigger items that would otherwise fit inside can’t get through the aperture. I completely understand why the sport-utility vehicle is the most popular type of car sold in America. It’s nice to go to IKEA and not have to worry about jigsawing those furniture boxes to fit. Simply open the hatch and dump it all in.

So I’m thinking maybe, if I were to get a second car, that it should be something on the utilitarian side. I already have a sports car! It makes sense for the other car to be able to take care of the everyday life stuff. An SUV that can haul stuff in the back with ease, carry pets and their dirt without care, and be able to park it anywhere with no worries. The M2 will then be relegated to pure, occasional pleasure driving. No more Costco runs for the little BMW.

This is all a big if, obviously. A second car is way down on the priorities list. Insurance cost for one car is expensive enough as is. It’s just something nice to think about. Unlike sports cars, the availability of SUVs is vast and varying. There’s so many options to choose from that doing a bit of window shopping and comparing is fun in it of itself.

New flex in town

For the rich one percent, the vehicle to buy right now is no longer the most expensive Tesla Model S or X. No, it’s a high-priced product from another electric-vehicle maker: Rivian. Those things are absolutely everywhere. I literally see at least one Rivian R1T or R1S (all-electric truck and SUV, respectively) every day driving through the neighborhood. Rivian is the new symbol of cool car flex. Teslas are too common, so is the Mercedes-Benz G-Wagon (the unofficial rich-person vehicle of Southern California).

Granted, I live in arguably the center of EV adoption in America: San Francisco Bay Area. So it’s not really surprising to see this many Rivian trucks rolling around. It’s so easy to buy one, too (provided you have the money). Like Tesla, Rivian sells directly to the customer. A few clicks on the website and it’s done. No haggling, no need to visit a dingy dealership with douchebag sales and finance persons. Sure, you’ll have to wait a few months for the thing to arrive, but at least you can get on a list. And you can be sure there won’t be additional shenanigans upon delivery.

Meanwhile, I can’t even get on a list for a Honda Civic Type R without agreeing to pay a hefty sum over MSRP. And the finance manager is going to insist I get financing with Honda, because they get a kickback. Paying cash? The price just went up.

As the automotive industry transition to electric, traditional automakers really need to figure out a way to efficiently sell online. Millennials and younger don’t want to visit a dealership and talk to a guy. We want a set price and simple buying. Do the entire transaction over smartphone, and just let us know when the car is ready for pick up. The additional friction of having to work with a dealership is going to drive people to the likes of Tesla and Rivian.

Only the most compelling of products can make people willingly go the dealership route. Like the aforementioned Civic Type R…

Why are you still talking to me?

Readers of the this blog may know I’m on a hunt to buy the new Honda Civic Type R. Production on this hottest Civic model is extremely scarce: as of this writing, only 826 cars have made it to the United States market since the end of October last year. You know what that means! Hefty dealership markups if you want to take one of these home.

While I don’t particularly enjoy paying over MSRP for anything, I understand the basics of supply and demand. When even ordinary cars have markups in this market, low-volume enthusiast cars will be doubly so. There’s zero incentive for a dealership to sell at MSRP, unless they either really like you, or you’ve already given them enough business previously to justify them doing you a solid. A middle-of-nowhere small town dealership will probably have less markup, but in populous California, I’m fighting with lots of willing buyers.

I have one advantage, however: time. There’s no urgency at all for me to buy right now. If it’s not this year, next year is just fine. The plan was always to wait out the initial rush of buyers and let them pay the meatier markups. I can swoop in later when the tacked-on money isn’t so insane ($60,000 for any Civic is kind of ridiculous).

However, I have been sending out some feelers to dealers that have a Civic Type R in the color I want: Championship White. It’s funny some of the replies I’ve been getting. I made a competitive offer on one car, and the dealer said their salespeople are currently working with buyers that offered $2,000 higher me - would I be able to match? I’m thinking, “Then take those offers! Why are you still talking to me?!”

It’s a negotiating tactic, of course. If the dealer truly had higher offers than mine, they wouldn’t be still texting me. Car buying is so much calmer and fun when I don’t really need to buy the car.

A more affordable Tesla

Late last week, Tesla announced price cuts to its entire model lineup, ranging from 15% to 20% - effective immediately. This is the power of direct-sale to customers: you the company can dictate the price at anytime. Don’t forget that Tesla actually raised pricing multiple times in 2022. This latest price cut is not so much a discount but rather a revert to the before times.

Still, if you just bought a Tesla vehicle in December 2022, you must be rightfully pissed off. Had you waited just that bit longer, you could have saved tens of thousands of dollars, plus be eligible (on certain variants of the Model 3 and Model Y) for the federal EV tax credit. $20,000 is a considerable amount of money, even for those who can otherwise afford a Tesla car before the price cut. This is like buying a TV for a certain price, only to find the same unit on sale the following week. On a larger scale.

Even those who purchased a Tesla car earlier in 2022 now have cars that are suddenly worth 15% less overnight. That would include dealerships who bought Tesla models on trade in: they are now upside-down on practically their entire Tesla fleet. I sure hope you’ve diversified! If your entire business is trading on used Tesla vehicles, you are effectively done.

It may be extremely salty for owners of recently-bought Tesla cars right now. I think if you’re in that situation, you have to suck it up and keep owning and driving the cars. That’s the only way to make back that money, so to speak: to get the most utility out of the original purchase price. Unlike the TV, you can’t simply return the Tesla or ask for a price match.

If you’re looking to buy a Tesla model, now is obviously a great time! The next day after the price-cut news, a friend of mine immediately sorted out financing and ordered a Model Y long range. He’s been pining to buy one for the longest time. The latest price reduction, plus the tax credit eligibility, was finally incentive enough for him to make the move. Now comes the hard part: the waiting game. As someone who have ordered a few cars, I can relate to that anxiety and agony.

Man maths

10 days into the new year - have I already failed in the mission for austerity? Readers of this blog knows I am on the hunt for a new Honda Civic Type R. That means adding another car to the one I already have - a not-so-cheap to own BMW M2. Obviously that’s going to be quite a chunk of additional borrowing, and an increase in ancillary costs such as gas and insurance.

That is, if a dealership would even sell me a Civic Type R for a reasonable price.

Us car guys like to perform what we call “man maths”: a euphemism for convincing ourselves that we can overextend the budget to afford a certain car (or more). So I did my due diligence on the plan to buy the Civic. And what do you know: I can afford to have a second car, though I wouldn’t classify it was comfortable. I would essentially be “car poor”, which for a car enthusiast is probably not the craziest thing. What’s the meaning of life but to find the one passion and pour everything into it?

At least I won’t be in the negative, so to speak. I’ll just owe a bank a lot of money.

Alas, my Asian upbringing is convincing me otherwise. Buying the Type R would remove any cushion I have for other things. As of right now I would rather build up that buffer instead of immediately dropping another bag of money. This after a 2022 of somewhat heavy spending; I really need to bump up my monetary reserves. The second car will have to wait. It can still happen, just not right at this moment.

I think patience here is going to serve me well.

Rejected too few

Getting rejected sucks. Even when the situation is one where I fully expect to get rejected. My particular human psychology just isn’t built-up to deal with this kind of failure. It’s as if each successive rejection is a direct reflection of my personhood, a character flaw. How can rejection affect me so adversely even with the proper amounts of anticipation? Perhaps I’m indeed too invested in what others think of me.

Yesterday I made an offer on a car at a local dealership. It was soundly rejected, obviously, which put me in a sort of funk the rest of the day. I can’t really explain it. It was textbook negotiation: two parties can only agree to move on from the table. But then why do I feel so bad? I don’t think I put undue anticipation, hopes and dreams, towards my offer being accepted. It was just taking a shot: the answer is always no if I don’t ask.

Thinking back, I’ve always had this neuroticism. Back in my schooling days, I would dread getting English papers back from the teachers. Invariably their remarks and criticism would hurt me to the core. I was rather happy to be done with English classes after freshman year of college. Instead, I do my writing here in this blog. Where it’s safe from criticism (readership is minuscule, no one comments!), and I can commit all the subject-verb tense error I am wont to do.

Moving forward I think it’s helpful to get rejected. It’s good practice, and unless I plan to stay in my hole for the rest of time, it’s going to happen anyways. I need to learn to handle the afterwards better, to be able to move on quickly. It’s a part of what I’m trying to do in 2023: live authentically, and not care about what other people think.