Auto Tariffs: time to buy?

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02nz
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Re: Auto Tariffs: time to buy?

Post by 02nz » Thu Jul 12, 2018 10:49 am

I don't think people should rush out and buy cars they don't need, but if the tariffs are implemented they will absolutely have an impact on the price of cars, even those not hit directly by the tariffs. Obviously the exact impact won't be known until actual implementation, but the tariffs on washing machines give a hint. Last year we bought an LG washer for $550; the exact same model at the same retailer now costs $765, following tariffs the U.S. slapped on South Korean washing machines (20%, although apparently it will go up to or has already gone up to 50%). As one would expect, competitors' washers not hit by the tariffs have also gone up in price: the Maytag models we cross-shopped against LG have gone up by a similar amount, even though they're made in the U.S.

mervinj7
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Re: Auto Tariffs: time to buy?

Post by mervinj7 » Thu Jul 12, 2018 11:00 am

02nz wrote:
Thu Jul 12, 2018 10:49 am
I don't think people should rush out and buy cars they don't need, but if the tariffs are implemented they will absolutely have an impact on the price of cars, even those not hit directly by the tariffs. Obviously the exact impact won't be known until actual implementation, but the tariffs on washing machines give a hint. Last year we bought an LG washer for $550; the exact same model at the same retailer now costs $765, following tariffs the U.S. slapped on South Korean washing machines (20%, although apparently it will go up to or has already gone up to 50%). As one would expect, competitors' washers not hit by the tariffs have also gone up in price: the Maytag models we cross-shopped against LG have gone up by a similar amount, even though they're made in the U.S.
Incredible. I don't know how I missed this as well. The Samsung washer we bought in Feb for $509 is now $729. I guess the tariffs have taken effect on those products. I wish I had replaced our tenants as well!

BigMoneyNoWhammies
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Re: Auto Tariffs: time to buy?

Post by BigMoneyNoWhammies » Thu Jul 12, 2018 11:01 am

covertfantom wrote:
Tue Jul 10, 2018 6:54 am
I need a new minivan (either a Honda Odyssey or Toyota Sienna) in the next year or so. Ideally, I would wait until I actually need the car, but the proposed tariffs are creating a fair amount of uncertainty. Does anyone know whether the tariffs would hit just cars assembled abroad or whether it would impact all parts sourced abroad? When are they scheduled to go into affect?
So I actually work for a member of the Senate Finance Committee (the senate comm that handles trade) and can speak to this a bit as trade is part of my policy portfolio. With the way supply chains and production for automotive vehicles works these days, basically every car you'd be in the market to buy will go up in cost. I won't get into the nitty gritty of the tariff details because there are several different ways the administration could come at the issue that can get pretty technical, but almost every car for purchase in the US has a substantial % of components that would be liable to the tariffs if implemented. The estimated increase in vehicle costs should the tariffs go into effect is an average of something like four thousand dollars for a typical vehicle that an average middle income American would buy, not chump change for most people. Basically no one wants the tariffs; even the automotive industry itself is vehemently opposed to them, so it remains to be seen whether they will actually go into effect. If you are 100% going to buy a vehicle either way, I'd say you're safe to purchase now to avoid the possibility, but nothing is set in stone whether they will actually be implemented, and you would still have some time even after the announcement of their effective date to buy a vehicle before being hit with the increased cost.

goodlifer
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Re: Auto Tariffs: time to buy?

Post by goodlifer » Thu Jul 12, 2018 11:22 am

mervinj7 wrote:
Thu Jul 12, 2018 11:00 am
02nz wrote:
Thu Jul 12, 2018 10:49 am
I don't think people should rush out and buy cars they don't need, but if the tariffs are implemented they will absolutely have an impact on the price of cars, even those not hit directly by the tariffs. Obviously the exact impact won't be known until actual implementation, but the tariffs on washing machines give a hint. Last year we bought an LG washer for $550; the exact same model at the same retailer now costs $765, following tariffs the U.S. slapped on South Korean washing machines (20%, although apparently it will go up to or has already gone up to 50%). As one would expect, competitors' washers not hit by the tariffs have also gone up in price: the Maytag models we cross-shopped against LG have gone up by a similar amount, even though they're made in the U.S.
Incredible. I don't know how I missed this as well. The Samsung washer we bought in Feb for $509 is now $729. I guess the tariffs have taken effect on those products. I wish I had replaced our tenants as well!
LG/Samsung washer tariffs went into effect in January or February. It was a separate issue from what is going on now. LG is getting around the tariffs by building a plant in TN.

ddurrett896
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Re: Auto Tariffs: time to buy?

Post by ddurrett896 » Thu Jul 12, 2018 11:32 am

Pajamas wrote:
Thu Jul 12, 2018 6:35 am
Clean and sustainable sources of electricity are certainly critical to the overall benefits of electric vehicles.
Don't forget about the massive coal burning machines that excavate the battery metals out of the ground, then the massive coal burning machines that transport them.

Then years down the road when the batteries that contain these rare Earth metals end up in a landfill.

Jack FFR1846
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Re: Auto Tariffs: time to buy?

Post by Jack FFR1846 » Thu Jul 12, 2018 12:27 pm

Before pointing at a washing machine, realize that prices on these things move all over all the time. My son used to work at Best Buy, where these things are sold. Prices on every single item in the store are changed every single day. So the $500 washing machine 2 months ago that's $700 today could be $400 tomorrow.
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InvisibleAerobar
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Re: Auto Tariffs: time to buy?

Post by InvisibleAerobar » Thu Jul 12, 2018 12:45 pm

22twain wrote:
Tue Jul 10, 2018 10:29 am
Pajamas wrote:
Tue Jul 10, 2018 8:54 am
Have you considered waiting to buy one of the newer models that burns coal?
Maybe this one? 8-)

Image
that is a beaut of a locomotive

Put Amtrak services to shame. Those trains averaged 60 mph btwn Chicago and NYC. On flatter grades (Milwaukee to Chicago), I think they averaged 90 if not 100 mph...

Correction: the picture above is a freight hauler. Probably aren't has fast but still really hauled.

The locomotive below is the one operating on the Milwaukee Chicago route. A coal burner that averaged 100 mph from Chicago to Twin Cities

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Nate79
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Re: Auto Tariffs: time to buy?

Post by Nate79 » Thu Jul 12, 2018 12:54 pm

covertfantom wrote:
Tue Jul 10, 2018 6:54 am
I need a new minivan (either a Honda Odyssey or Toyota Sienna) in the next year or so. Ideally, I would wait until I actually need the car, but the proposed tariffs are creating a fair amount of uncertainty. Does anyone know whether the tariffs would hit just cars assembled abroad or whether it would impact all parts sourced abroad? When are they scheduled to go into affect?
No one NEEDS a new car. New cars are WANTS. You could very easily purchase a few years old of the same model and this issue becomes moot.

InvisibleAerobar
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Re: Auto Tariffs: time to buy?

Post by InvisibleAerobar » Thu Jul 12, 2018 12:57 pm

Nate79 wrote:
Thu Jul 12, 2018 12:54 pm
covertfantom wrote:
Tue Jul 10, 2018 6:54 am
I need a new minivan (either a Honda Odyssey or Toyota Sienna) in the next year or so. Ideally, I would wait until I actually need the car, but the proposed tariffs are creating a fair amount of uncertainty. Does anyone know whether the tariffs would hit just cars assembled abroad or whether it would impact all parts sourced abroad? When are they scheduled to go into affect?
No one NEEDS a new car. New cars are WANTS. You could very easily purchase a few years old of the same model and this issue becomes moot.
that assumes used car prices won't rise accordingly... after all, why shouldn't it, as demand for used cars would rise for the exact reason you pointed out

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greg24
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Re: Auto Tariffs: time to buy?

Post by greg24 » Thu Jul 12, 2018 12:58 pm

Yes, used car prices would creep up, too.

Nate79
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Re: Auto Tariffs: time to buy?

Post by Nate79 » Thu Jul 12, 2018 1:02 pm

Perhaps a little depending on supply/demand. But original statement on Need a new car still stands. Not a need, it's a want.

Whakamole
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Re: Auto Tariffs: time to buy?

Post by Whakamole » Thu Jul 12, 2018 1:28 pm

greg24 wrote:
Thu Jul 12, 2018 12:58 pm
Yes, used car prices would creep up, too.
Cash for Clunkers, which reduced the supply of used cars, didn't drive up prices that much: https://www.cars.com/articles/2011/10/c ... ars-later/

It's rather hard to say what impact it would have, or how much. Cars now are very reliable. I see a lot of perfectly good cars up for sale because the owner wants to buy a new car, or even a newer used car.

biturbo
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Re: Auto Tariffs: time to buy?

Post by biturbo » Thu Jul 12, 2018 2:27 pm

I think once the full impact becomes clearer, even though it will take some time to be felt directly (takes a while for parts to get used and into vehicles that end up in the showroom once they've been imported, and takes a while for fully assembled vehicles to get from the dock to the showroom), it will start to show up in price negotiations at dealerships (Buy now before prices go up!).

This presents an interesting dilemma for those of us who lease - My wife and I both have cars on leases that end in a little under 2 years. We would normally just return them and lease new ones, but depending on how bad these tariffs get, that could get fairly expensive, especially since we typically get cars that are made overseas.

We have talked about the possibility that we may just end up buying out our leases, which brings up a question - should we just buy them out now and lock in a lower interest rate than we would likely see in a few years? The current monetary policy situation certainly makes it more likely than not that interest rates will be higher in two years, but then again, if these trade wars end up lasting for several years, would that still be the case? (For the record, I'm not planning on doing anything, but the thought did cross my mind)

Ultimately, I think this things are really hard to prediction beyond the next year or so, especially since the overall political situation seems a little more volatile and unpredictable than it typically has been.

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Re: Auto Tariffs: time to buy?

Post by LadyGeek » Thu Jul 12, 2018 3:41 pm

I removed several off topic posts. This thread has run its course and is locked (derailed, rants about the tariff).
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