Money to be made? (25% tariff on all imported cars)

"davesaddiction @ opposite-lock.com" (davesaddiction) 07/13/2018 at 12:38 • Filed to: None

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So, if this goes through (and he’s just stupid enough to actually do it), should we all be buying new or nearly-new imported cars up until it goes into effect so we can quickly profit 15% by selling them to buyers (at 10% off the “new” + tariff price)? What effect will this have on all used import cars? I assume prices will naturally go up, assuming demand stays constant.

Rainbow > davesaddiction @ opposite-lock.com 07/13/2018 at 12:47

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It’s a risk for sure, but you could possibly do it. The only problem is that the cars already in dealers wont be affec ted.

facw > davesaddiction @ opposite-lock.com 07/13/2018 at 12:52

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You won’t be able to get people to pay 25% more. Companies will just stop importing cars to the US at that tariff (they would still sell stuff based in the NAFTA zone, and probably move some production there) , but you’d also just see many more niche products discontinued, much in the way we don’t get much in the way of small trucks due to the chicken tax making them uneconomical to import.

davesaddiction @ opposite-lock.com > Rainbow 07/13/2018 at 12:52

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Good point - lots of inventory on lots to work through, and they’ll gradually raise prices to make additional profit on old stock before the tariffed shipments hit their lots. Will be crazy when there are two identical cars for sale next to each other, with one 25% more expensive!

fintail > davesaddiction @ opposite-lock.com 07/13/2018 at 12:53

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If 45's stunningly idiotic tariff scheme does come to reality, I suspect some makers will just absorb the costs into the vehicle price, so the end result may not be as severe. Margins on some of these vehicles are yuuge, and I think it could work.

Also, with an economic slowdown apparently more and more likely by 18-24 months out, demand both new and used might take a hit in the not so near term, too.

davesaddiction @ opposite-lock.com > facw 07/13/2018 at 12:54

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Some people will pay, at the top end, but yeah, makers like Mazda who are competing at the middle or low end of the market are going to get screwed.. . Sad!

DipodomysDeserti > davesaddiction @ opposite-lock.com 07/13/2018 at 12:55

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My dad’s new BMW lost about 20% of it’s value within the first year, so  definitely don’t do this with German cars! I’m wondering if it will have any affect on the price of used vehicles.

davesaddiction @ opposite-lock.com > DipodomysDeserti 07/13/2018 at 12:58

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20% in a year is crazy... what model?

I think used import cars will go up in value some. More will consider used instead of new with the price hike.

Your boy, BJR > davesaddiction @ opposite-lock.com 07/13/2018 at 13:39

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Well it looks like the Porsche bubble isn’t losing steam anytime soon.

DipodomysDeserti > davesaddiction @ opposite-lock.com 07/13/2018 at 14:21

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It was an M235i. I got my CPO ‘13 X1 with 28k miles on it for around $21k. The window sticker was for $39k and it was only two years old. I think the BB value  is around $8k now.

davesaddiction @ opposite-lock.com > DipodomysDeserti 07/14/2018 at 21:39

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I mean, if you use depreciation to your advantage, it can be great, but damn.

DipodomysDeserti > davesaddiction @ opposite-lock.com 07/14/2018 at 21:52

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Yeah, it’s pretty rough. My BMW was covered under the older CPO terms, so I got free maintenance for the first 50k miles which netted me free brakes and rotors at 48k miles and a few oil changes. I also got a new radiator and a new AC compressor along with a few oil seals at 98k miles under warranty, so hopefully there are no big money warranty items in the near future. I think I got one of the most reliable modern BMWs ever made, so I’m hop ing my luck holds. I can do the work myself, but I’m in the process of applying to grad school right now, so it’s going to be a real PIA if stuff breaks within the next few years.

davesaddiction @ opposite-lock.com > DipodomysDeserti 07/14/2018 at 23:38

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Nice - hope it gives you several more years. My 2008 M3 was ~ $65 k new. I paid about 40 for it in 2012, with just under 40k miles and some remaining factory warranty (caught the AC evaporator). 6 years later, with many track days and backroadtrips under its belt and the rock chips to prove it, it’s got 120k miles on it. If I ever sold it, I’d probably get $15-20k, but I’m hoping to keep it for the long haul and let the kids enjoy it one day  (or, if that doesn’t work out, swap it out for an ‘11 with fewer miles and less wear).