Are people actually paying these prices

So I recently purchased a 21 tundra pro lunar rock and shortly after my friend has decided he also wants one. I started calling around to find one that isn’t highly priced and we are not able to find anything. I got my truck for sticker and the only reason is because the dealership really wanted my trade, otherwise I would have spent at least 5k over. Most places we have contacted are around 5-15k over sticker and some have pending sales on them. We have also reached out to a few dealers about used ones and they have them for 62-68k depending on mileage. This is crazy. I know the market is wild right now but I’m just super surprised that people are actually paying these prices. Is this just a tactic for dealers to keep inventory or do they actually get that kind of markup? Any feedback would be appreciated.

 

I just sold my Taurus for 5k more than I paid for it 2 years ago and put 20k miles on it. The prices are that ridiculous that even us sellers get to take advantage. Bank are lending out at low rates and now extended out loans to 8+ years so people think now a 60k truck has a 40k truck payment. Couple that with supply chain issues. I went in and looked at a used wrangler at a Jeep dealership and the salesman there said they are expecting their inventory problems to get worse in to next year.

Shop carefully. The shortages make buying a vehicle difficult. Even when the market corrects, energy costs put pressure on households this winter, cost of goods increasing, I dont know how much the car market is going to change. I think people will stop buying new but I dont know how much prices are going to drop because of the lack of production. I personally think it will be a model example of "Stagflation."

 

Yes, people are paying

 

Yea it’s crazy right now. What confused me is that I asked these sales people if they are willing to negotiate the market adjustment on these trucks for my friend and they pretty much said no. 1-2k over is ok in my opinion but anything more is just crazy. The used side is even crazier at the moment, for what people are paying for these trucks used they can get a new one for less.

 

Hyperinflation. Look it up

 

So I get the affects of inflation and supply/demand in regards to the current market conditions. So maybe I should be asking this a different way. I think what I’m confused about isn’t so much that people pay these crazy prices for vehicles, I guess I’m confused on why someone might pay almost 70k for a vehicle that 2 years ago can be purchased for a few bucks under MSRP. I think I had an opportunity a few years ago to buy a pro 4runner and tundra for like 3500 under sticker. Maybe I’m just confused on the reasoning. I get the tundras hold value and all and so do many Toyotas, I have owned a lot so I am familiar with that. Is the pro that much of a unicorn that someone has to have it and is willing to pay that much more to have one, am I missing something. Don’t get me wrong the truck is great and this is my 4th tundra, best one yet. Just think how crazy this sounds, a truck that hasn’t been revised in over 15 years can demand that kind of money. Is it because this is the last year of the v8. Please help me understand. Are these trucks gonna hold that type of value down the road or will people loose a ton of money that overpaid. So many questions.

 

Your money is worth less than it was two years ago.

 

Are they - certainly.

Only difference is 2 years ago you paid 48k for the truck with a 51k “sticker” and the dealer bought your trade for 26k and sold it for 34k

Now the dealer sells you the 51k truck for 55k and your 34k trade sells for 36k (quickly).

Dealer is gonna make their markup someway - they can’t overpay for trades and discount new - it just doesn’t work over any period f time. Knowing others will pay more for in demand used cars - they have to adapt to be able to pay more for used, while still keeping the lights on selling new.

 

Yes, there's that guy... Yes Honey!!!

 

Call it “sector” inflation if you like - but just keep in mind inflation in the broader economy and in new trucks are 2 very different things.

Yes - inflation has perked up a little broadly - but no where near what it has in the truck sector.

Heavy equipment has been going through this for a decade - higher education for at least that long…look at the cost of college 20 years ago and the amount of scholarships awarded as a percentage of those cost typically vs today.

 

I appreciate and respect all this feedback and it all makes sense. At what point does someone say crap I’m spending 65-70k for a tundra, inflation or no inflation that should be common sense. At these prices I’m glad I got this truck and kinda worried the 22 tundra will cost 65k for a limited.

 

Local NJ dealer had a 2021 Pro with just under 9k miles. I called to find out the asking price since it wasn't on the website. I was told it arrived the day before, they listed it for 70k, and someone had a deposit on it.

People are paying top dollar.

 

The part I’m having a hard time understanding is how greedy these dealers are, I offer someone on the other end of the phone 65k for a used tundra pro and they say no thanks we are asking 67k and we will wait for that buyer. These people are cocky, like they know someone is willing to pay that much more for the same truck. It absolutely amazes me how firm these dealers are on something like that.

 

I wouldn't pay that price but I don't blame the dealer. I just wouldn't buy from them. There are dealers that don't markup vehicles.

 

initially, i wanted to buy a used tundra but the cost was close to a new one. ended up picking up a new one instead. Same with trailers right now, the lance i'm wanting to buy isn't available anywhere and the one that are available, someone has their name on it already. additionally, I don't want a 2020 or 2021 trailer, want a pre-covid trailer due to possible better quality.

 

I got my LR for sticker, now the dealer has a used 19 pro in white for 54k with almost 80k miles. Crazy times

 

Does the pro have higher resale value than other models in a normal market? I know it’s harder to get typically. Searching online we only found 30 new pros within a 500 mile radius. I’m wondering if that’s affecting the high up charge over sticker.

 

It seems like they hold the value better.

 

60k for a tundra or 85k for an f150

I remember when I could get an f250 crew cab diesel for under 40k

If you don’t need a car right now you’re set. Kind of like housing. Only buy it if you really need it. If you need a car right now like I did you have to be super patient and shop around. Got my wife a new car for msrp and that felt like a bargain.

 

if you really want to know what's the actual value of a truck.. call your insurance company and ask them a hypothetical question what's the truck worth if you totaled it driving it out of the dealership that hour.

 

That’s a great point. I think the insurance companies and a lot of other companies use MMR, I know that’s how they evaluate if someone should have gap insurance or not. Based on the loan to value, which if the vehicle values are heavily inflated that’s not giving people an accurate number. I think we all know it’s a bad time to buy a vehicle, than again nobody really knows when this will get back to normal. Some experts predict this will never get back to normal, why would manufacturers want to get things back to normal when they are seeing the biggest profits ever. Not having to offer a ton of incentives to move cars sounds like a win for many manufacturers. I believe this is just the beginning, it’s a reason for manufacturers to increase the prices of new vehicles while the used ones are at an all time high. I think anyone waiting will ultimately pay a lot more money because the cost will just continue to go up. I have tons of friends that are high up in the automotive industry and they are loving this right now, what’s happening is bigger dealers are buying up the smaller dealers that are hurting and can’t compete, they cant afford the high costs at auctions and don’t have the same trades coming in like the bigger ones. Manufacturers are using this time to reevaluate the car buying/selling process and vehicles will only go up from here. At least that’s what I’ve been told.

 

If the Chinese magnesium stories are correct...probably get a whole lot worse before it gets better.

 

Excessive debt has helped create the inflation we see today in many durable goods.

Today you can get 7 year car loans at low interest rates . That is ridiculous. The fed has kept interest rates at near zero since 09-11, which has been great for asset prices however it has been horrible for the value of money. Excessive loans increase the demand curve for a given product. When anyone can “afford” the payments, they can now spend far more for the truck than they could in the past. So toyota has more able customers than they would otherwise have without the crazy loans. This drives up price. If you had higher interest rates, less people would be willing to borrow 45k on a truck, thus demand curve would shift downwards.

 

Similar to the housing bubble in 2010(?) where the banks gave home loans to everyone and their dog for waaay more than they actually qualified for.

 

I bought a 2021 Platinum 1794 in July. First dealer wanted 5k over sticker, no thanks. I located another one online that was in transit to another dealer and it was the EXACT truck that I wanted, Wind Chill Pearl, sunroof, bedliner, running boards. 1k over sticker. I got 32.5K trade on my 14 double cab, and I kept the wheels and tires which are worth another 2k. I think I did pretty good and I absolutely love this truck. Still need to level it and put my other wheels on it.

 

Same market forces drove up the prices yes. However trucks aren’t a bubble in a sense that nobody is planning on investing in them going up further after purchase haha

 

My local dealer got a 2022 Platinum Sequoia up on the website this morning...lasted less than an hour before sold...they are holding to MSRP.

 

Have you been on Mars the last 8 months? Vehicle prices are through the roof. I sold my 2019 SR DC with 17k miles for a little over $5k than I paid new this spring to Carvana. I bought a 2021 SR5 and sold it 3 months later with 2700 miles for over $4k what I paid new. Carvana sold my 2021 SR5 for $3k over what they gave me. Insanity.
It’s insane that I sold a 3 month old truck and made $4k, what’s even more insane is someone bought it for $7k OVER the price I paid. Unreal.

 

Shoot Tundras are cheap compared to the Big 3. Rams and F-150’s in Laramie or Lariat and up trims are well over 60,000 and they aren’t budging on MSRP. They’ll give you either 0 % financing and no discounts or $2500 off and then tack on $2500 for dealer add ons.

 

It’s called more money than brains. The majority of people don’t need a new vehicle but still want one and will pay whatever it cost.