The WOLF STREET F-150 XLT and Camry LE Price Index, Model Year 2022 Update: This is the Craziest Situation I’ve Ever Seen | Wolf Street

But wait… Most dealers are no longer discounting from the MSRP. They’re selling near MSRP or above MSRP across most of their product. And they can.

That customers are jostling for position to pay those prices is the craziest situation I have ever seen in the car business. Sales volume in units at dealers and automakers has plunged due to the shortages, but they are making huge per-vehicle gross profits of historic proportions.

What’s bizarre is that customers let them, and by letting they, they’re encouraging them. Vehicles are the ultimate discretionary product. Most people can drive what they already have for another year or two. They did this during the Great Recession and caused the industry to collapse. But enough people are eager to pay those prices to keep the this going.

Since 1990, the F-150 XLT price has soared by 178% and the Camry LE price 73%, while the CPI for new vehicles has risen just 33%, thanks to these hedonic quality adjustments.

The WOLF STREET F-150 XLT and Camry LE Price Index, Model Year 2022 Update: This is the Craziest Situation I’ve Ever Seen | Wolf Street

Just another ‘bubble’.. Move on, nothing to see here..