Much Less Resale value

[Pedaldude]

This is basically business as usual, like others have said; we’re coming out of a topsy-turvy period of batshit craziness!

It’s normal for a used car to depreciate, it’s normal for dealer lots to be filled with cars and trucks. It’s even normal to have brand new vehicles from last year. It’s normal for dealers to offer insultingly low trade in prices.

What’s not normal is selling a truck for more than you paid for it. It’s not normal to pay more than MSRP for a truck. It’s not normal to be on a waiting list to get a plain old commuter car or grocery getter. It’s not normal for a car dealership to have an empty lot.

We’re just coming out of an automotive event timeline comparable with Cuba 1959! I’m glad to see it returned to a buyer’s market. It’s too bad that the manufacturers haven’t figured it out yet and started building more budget friendly vehicles.

The banks and customers never should have agreed to over MSRP markups and useless BS dealer add-ons. Corporations and the government won’t like it but consumers need to act if they want to see any deflation in prices by just refusing to play games with these usurious business practices.

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[JayceeP]

toronto price should be much better than that. i had seen a few inventory at over $16k off msrp.. tho that’s cash price.. they dont bother with lease deals unless you want to factory order which can be had at even higher discount, with long wait time

Yeah I just saw a 502a at Yonge and Steeles o. $17,000 off MRSP for cash. I’m not paying cash for a truck. But also, their 2-year lease rate of 6.49%. I can get 2.99. That’s $5-7k in extra lease costs over 2 years. Plus I’m in Nova Scotia. I’m not flying 2 hours and driving 1800km to save $1500 over 2 years.

To your other comment, no dealer is going to factory order at a steeper discount than that $17k cash discount and then honour the Ford.ca lease rates off 2.99-3.99 or financing at 0-1.99.

The sales manager screwed up his quote to me and took a $267 loss on the truck. $10,250 discount off MRSP. He showed me the screen. Lease rates are factored in to this though.

The reason cash discounts are so steep is because the market rate for corporate debt a higher % than what ford charges. So, Ford’s taking a loss on their current financing terms in order to let the customer finance a truck which is how they drive those steep cash discounts.

Just go to your bank and see how much a car loan is these days. Easily 8% unless you can pull equity out of your house at 5-7%

 

[JayceeP]

Which Canadian dealer?

I’m in Nova Scotia.

 

[FG1424A]

Yeah I just saw a 502a at Yonge and Steeles o. $17,000 off MRSP for cash. I’m not paying cash for a truck. But also, their 2-year lease rate of 6.49%. I can get 2.99. That’s $5-7k in extra lease costs over 2 years. Plus I’m in Nova Scotia. I’m not flying 2 hours and driving 1800km to save $1500 over 2 years.

To your other comment, no dealer is going to factory order at a steeper discount than that $17k cash discount and then honour the Ford.ca lease rates off 2.99-3.99 or financing at 0-1.99.

The sales manager screwed up his quote to me and took a $267 loss on the truck. $10,250 discount off MRSP. He showed me the screen. Lease rates are factored in to this though.

The reason cash discounts are so steep is because the market rate for corporate debt a higher % than what ford charges. So, Ford’s taking a loss on their current financing terms in order to let the customer finance a truck which is how they drive those steep cash discounts.

Just go to your bank and see how much a car loan is these days. Easily 8% unless you can pull equity out of your house at 5-7%

not sure about the lease rate now but it was 5.99% in april with 71-73% residual, with $14k discount pre-tax ($94k msrp at $80k for 502a pb+bap+tow pack+moonroof). then it dropped to 2.99% in May with pretty much the same residual.

i added bed utility+fx4+bedliner at no extra cost in May (with the lowered interest rate, essentially turned interest into options/equip, tho i probably still lost quite a bit of cash).

called another dealer with inventory in May and they said they could beat any price on factory orders since you never know when you would get your truck? none of their inventory has the options i wanted, but most are at $16k5 cash discount. leasing will use msrp with a few thousand dollars of discount, i didn’t bother to get the exact numbers.

at the end of the day, you could either benefit from the steep cash discount, or 0% financing, or high residual on lease.. essentially very similar total “savings”(ofc with differences), and rarely they stack (great deal once they do stack).

almost 3rd month on factory order and no vin yet? got order number and not sure it would provide any info on its own??‍

 

[JayceeP]

not sure about the lease rate now but it was 5.99% in april with 71-73% residual, with $14k discount pre-tax ($94k msrp at $80k for 502a pb+bap+tow pack+moonroof). then it dropped to 2.99% in May with pretty much the same residual.

i added bed utility+fx4+bedliner at no extra cost in May (with the lowered interest rate, essentially turned interest into options/equip, tho i probably still lost quite a bit of cash).

called another dealer with inventory in May and they said they could beat any price on factory orders since you never know when you would get your truck? none of their inventory has the options i wanted, but most are at $16k5 cash discount. leasing will use msrp with a few thousand dollars of discount, i didn’t bother to get the exact numbers.

at the end of the day, you could either benefit from the steep cash discount, or 0% financing, or high residual on lease.. essentially very similar total “savings”(ofc with differences), and rarely they stack (great deal once they do stack).

almost 3rd month on factory order and no vin yet? got order number and not sure it would provide any info on its own??‍

Yep - exactly. I’m getting around $10k off (502a, moonroof, BAP, Bed Utility) ~$90k MRSP factory order. I am getting the 2.99-3.99 lease rate too.

Like you said, the discount all kind of works out in the end.

 

[Calson]

I have had my pickups on average for more than 10 years. I minimize the depreciation hit and the sales tax and DMV fees and car insurance by doing this. If for some reason you want to buy a new truck frequently then you are better off leasing than buying. The depreciation is part of the calculation in determining the monthly payment amount. If after 2-3 years you want to continue to use the truck the lease buyout amount will be much less than the cost of a new truck and you know the history of the truck.

 

[bdginmo]

The reason cash discounts are so steep is because the market rate for corporate debt a higher % than what ford charges. So, Ford’s taking a loss on their current financing terms in order to let the customer finance a truck which is how they drive those steep cash discounts.

Exactly. Ford basically handed me $7000 dollars just by financing through them at 1.9%. I can then keep my capital parked in a money market fund making 5.2% thus pocketing the 3.3% spread which adds up to $7000 on a $66k loan over 72m. Ford is taking a huge loss on these low rate auto loans right now. I'm not sure how long that can be sustained.

 

[AndreB]

I am sorry to read that a lot of you have problems with 2023 Lariats. I bought mine in January 2024 and my Lariat was built in November 2023. I have no deletes on mine and did not have to go to my dealer since I bought it. I guess I should go and buy myself a lottery ticket. ?

 

[JayceeP]

I have had my pickups on average for more than 10 years. I minimize the depreciation hit and the sales tax and DMV fees and car insurance by doing this. If for some reason you want to buy a new truck frequently then you are better off leasing than buying. The depreciation is part of the calculation in determining the monthly payment amount. If after 2-3 years you want to continue to use the truck the lease buyout amount will be much less than the cost of a new truck and you know the history of the truck.

Agreed on both points.

 

[JayceeP]

Exactly. Ford basically handed me $7000 dollars just by financing through them at 1.9%. I can then keep my capital parked in a money market fund making 5.2% thus pocketing the 3.3% spread which adds up to $7000 on a $66k loan over 72m. Ford is taking a huge loss on these low rate auto loans right now. I'm not sure how long that can be sustained.

Yep!

 

[Samson16]

Yes nobody usually comes on here and raves about everything working on their truck ?

Au contraire, perhaps we haven’t had the pleasure of introductions.

 

[JExpedition07]

It’s not terribly uncommon, we have the #1 selling vehicle in the US. 20% depreciation year 1 would be average.

 

[Calson]

Depreciation varies greatly by make and model and this reflected in the lease agreement terms for them. I would expect the depreciation to be greater on a platinum than for an XLT. If you check the KBB value you will find that certain items that are part of a costly options package do little or nothing for the book value of the vehicle.

 

[Jerome10]

Doesn't surprise me. 1st year depreciation is always bad, plus 2023's on lots with rebates also immediately drives down resale as well.

 

[Suns_PSD]

I noticed use 2023 Lariat with 11k mileage is about $20k less than brand new 2024 Lariat in Canada. Is this normal for F150 to lose this much of value in one year??

These dealers want to make a solid $10K on a used vehicle, to tie up that much cash, pay the salesperson, etc.

So now your used truck cost only $10K less than a brand new one with new tires, nearly any color, etc.

The new one, due to oversupply, anyone can get $3-10K off of MSRP. So now at most, your used truck is $2-5K less than a new one.

Interest rates are always 2-4% better on a new vehicle vs. a used one as lenders have seen lower rates of repos on new vehicles and there is less risk.

So now your 'used' truck cost exactly the same payment, or even more, than a brand new one a year newer that has updates and therefore will be worth more at resale time.

The way I see it, you got an incredible deal at only $20K less than the updated model.

People got real confused about car resale values during the Covid boom and they started to believe that they were buying an appreciating asset. They were wrong and that was an anomaly.

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