Car makers’ June sales numbers are in, along with the press statements and analyses. You can use that information to save thousands of dollars when you buy a car–if you’re willing to buy like billionaire Warren Buffet.
Rosy results are good for shareholders, not so much for buyers
Ford reported generally rosy results–up 2% across the board. Mark LaNeve, Ford Vice President, U.S. Marketing, Sales and Service, said, “The Ford brand’s average transaction prices have increased $2,700 versus a year ago–more than triple the industry average–while our incentives are down, showing how much customers value our investment in new vehicles with the latest technologies.” Ford went on to report that F-Series average transaction prices reached an all-time record in June, with average transaction prices moving above $44,000 per truck–$3,600 higher than last year.
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Consumers paid, on average, $2,700 more for a Ford vehicle, and $3,600 more for an F-Series truck. Of course that makes Ford happy, but it means that you and I need extra paychecks to buy this year’s Ford truck. Ouch!
What would Warren Buffet do?
Here is where Warren Buffet comes in. The “Oracle of Omaha” is a famous stock contrarian. True contrarians generally do the opposite of what the crowd does. I can’t tell you if contrarian investors do better than others–but I can tell you that contrarian car buyers do better.
Ford just told us that everyone wants their trucks and, because of that, people are paying a lot more for them. That tells me that now is a lousy time to buy a Ford truck, or almost any truck or SUV. June sales for trucks and SUVs were up 11%, the strongest they’ve been in a decade.
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What should you buy?
Here is where being a contrarian will save you. Buy a vehicle in a segment that isn’t on fire–car sales, as opposed to truck and SUV sales, were down 3.6% in June. As an extreme case, Chevrolet Cruze sales were down 13%–think you can get a good deal on one of those, as they sit unsold on lots?
We don’t have to be as smart as Warren Buffet. If you want a true great deal, buy a car or truck that is not in vogue and buy it at a time that is not in vogue (more on that in another post). It’s the contrarian thing to do–and it’ll save you money.