I have a good friend who pre-ordered both an Audi RS6 Avant and a top-spec Ford Bronco shortly after both debuted. These were the pre-pandemic times, and no one I know assumed a semiconductor shortage that would fundamentally alter the industry was on the horizon. My friend just thought they were cool, and so he ordered them.
You can guess what happened next. Both vehicles were delayed and, by the time they were ready to be delivered, were already worth massively more than what he agreed to pay for them. This sometimes happens with desirable models, but not to the extent that occurred during the pandemic. He drove the RS6 Avant for a short period of time before succumbing to an offer too ridiculous to ignore. The Ford dealer tossed a ton of cash at my friend for the Bronco before he could drive it off the lot. Ultimately, my friend made a lot of money by not owning the cars he ordered.
While he’s quite financially astute in general, none of this was a plan. I asked him if he had any regrets about selling these cars, to which he responded that he “regretted selling any car I’ve ever owned” because they’d be so much more valuable now. Living adjacent to a downtown, he realized it made more sense to sell his other cars and use Uber for a while and wait for costs to come down.
The Morning Dump, as always, is not in a position to make spiritual, financial, or horticultural advice. My point here isn’t that there’s a smart way to time this out; my point is that it’s super hard. A big hedge fund has taken a big position in Hertz, partially premised on the idea of used car values rising. They are rising and probably will, but it’s difficult to be long something when it requires you to be short that same product.
Will a trade war make used cars more valuable? Probably. Will it make new cars more expensive? Yes. Will it make China more powerful? Maybe.
It’s Friday, so let’s take a break from all of that and instead focus on one of my favorite topics: Volkswagen making a hard thing even harder, Trucks Edition. And, finally, Ford’s gotta recall more trucks because time is a flat circle.
Hertz, And The Idea Of Being ‘Long Used Cars’
Ackman is going long used car prices https://t.co/XyicgC8IkF
— Joe Weisenthal (@TheStalwart) April 18, 2025
If you don’t know Joe Weisenthal, he’s one half of the Bloomberg show “Odd Lots,” which is both a newsletter/podcast and a larger social experiment. I’m a huge fan, and what works about the show is that Weisenthal seems endlessly fascinated by what’s going on in the present while his co-host, Tracy Alloway, is fixated on the (usually negative) outcomes.
The friction of those viewpoints is especially valid today, when nothing feels normal and the outcomes seem like they could be terrible for most people. This is a challenge for me because I don’t have a co-host. Inside me are two wolves, and one likes never having a shortage of things to write about, while the other wolf has a 401k he’d like to still be there in the future.
In the tweet embedded above, Weisenthal is using the shorthand of the financial internet to say that hedge funder Bill Ackman thinks that the value of used cars will be high enough, for long enough, to make Hertz a good investment. I’ll quote from Ackman’s long tweet for those of you who don’t want to use Vichy Twitter or listen to Bill Ackman.
His basic premise is that the car rental business is an oligopoly and that Hertz, though it made some bad bets, has good new leadership and could transform in the coming years. Perhaps, but it’s this bit I want to talk about:
Hertz is uniquely well-positioned in the current tariff environment, where auto tariffs are likely to cause used car prices to rise. Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion. A 10% increase in used car prices would equate to a $1.2 billion gain on its auto assets – equivalent to approximately half of the company’s current market capitalization.
The company finalized its 2025 model year purchases with OEMs earlier this year on attractive terms prior to the tariffs being enacted, ensuring a favorable basis in the replacement fleet.
Just as a reminder, the two big things that matter to rental car companies are RPU and DPU. RPU is “revenue per unit” and DPU is “depreciation per unit.” Rental car companies keep huge fleets on their balance sheets, and minimizing depreciation is almost as important as maximizing the profit you make off each vehicle.
In Q4 of last year, the company improved its DPU ($460 per unit per month), but its RPU dropped ($1,393). Its DPU has long been terrible because the company made the decision to buy a bunch of electric cars right before a price war, and slowing demand/increasing inventory caused used EV prices to plummet. Hertz had to sell a lot of cars, specifically Teslas, at big losses. Even worse, people found the experience of renting an EV underwhelming, which impacted RPU.
The good news about bad fleets is that they turn over, and Ackman’s contention that tariffs could cause used car values to go up isn’t entirely wrong. That’s what most experts think, and wholesale used car prices continue to rise according to Manheim. Ackman says that the company has already agreed to purchase agreements with OEMs, therefore, the prices for its next fleet of cars will be low.
That is a short- to medium-term gain for the company, but what happens if tariffs and supply chain shocks cause new car prices to continue to rise? An increase in the cost of new cars usually makes used cars more valuable, so there’s a chance it all negates itself. But what if something causes the economy to worsen (like a recession) or rental car utilization to drop (Waymo in more places) at the same time that supply chains have been moved to North America, making cars way more expensive?
Rental car fleets are a good buyer for car companies that need to balance out a lot of production capacity, i.e., to move unpopular cars. There’s a reason why rental fleets lately have seemed biased towards Nissans and Stellantis products. The catch there, of course, is that the more a model is dumped into a fleet, the less valuable it is, which increases depreciation.
Being a car rental company is as much about balancing out these forces as it is about renting cars, and the continued existence of rental car companies shows this is not impossible to do. Hertz’s recent troubles also show, however, that it ain’t easy. If you’re holding onto a used car and trying to time the market as an individual, it’s even harder, which is why my advice is that normal people should buy and sell cars before they have to, but shouldn’t always buy or sell a car just because they want to.
The Old Boss Is Always A Dick Until You Meet The New One
Last week, I talked about how the tariffs imposed by the United States could drive some of our allies into the arms of the Chinese government. The counter to that is, while the United States may be difficult to deal with, it’s often still better than the alternative.
Definitely check out this New York Times news analysis: “China Wants Countries to Unite Against Trump, but Is Met With Wariness.” In particular, there’s the idea that Xi Jinping’s outreach might be a bit hypocritical:
During his travels in Southeast Asia this week, he has depicted China as a leading defender of the global order and indirectly cast the United States as an unreliable player. In Hanoi, he urged Vietnam to join China in opposing “unilateral bullying.” In Kuala Lumpur, he urged Southeast Asian nations to also “reject decoupling, supply disruption,” and “tariff abuse.”
“Chinese officials have quietly conveyed that the way the U.S. treats its longstanding allies and partners in Europe is a sign of what’s to come for Southeast Asia,” said Lynn Kuok, the Lee Kuan Yew Chair at the Brookings Institution in Washington. “With Trump’s steep, sweeping tariffs across the region, that message needs no reinforcement.”
But Mr. Xi’s attempts at presenting China as a paragon of free trade and a champion of the rules-based international order ignores years of Beijing’s own coercive economic behavior and generous subsidies for select industries that have often alienated the country’s trading partners and neighbors. It partly explains why the world’s eroding trust in Washington has not immediately led to newfound alignment with Beijing — that, along with the risk of retribution from Mr. Trump for siding with China.
Dare I say it, but this seems like a great opportunity for the Dutch to sweep in and claim the empire they lost in the late 18th century.
Volkswagen Doesn’t Know Everything, Part Zwei
A few days ago, I mentioned that it was pretty chill that Volkswagen’s CEO admitted the company didn’t know everything and could use some help. A lot of what VW has done lately is move away from projects that rely on a ton of engineers (like software company Cariad) and instead has looked outward to more flexible organizations.
That doesn’t seem to be working out for VW’s combined truck unit Traton, which was supposed to find efficiencies by getting all of its big truck subsidiaries together. Now, the McKinsey consultants are on the way, according to Manager Magazin:
Traton ‘s board of directors is currently nervously awaiting news. McKinsey has also been in-house at Volkswagen’s truck subsidiary for several weeks – and once again, the focus is on a project that’s going quite awry: TMS, the Traton Modular System.
Traton is almost 90 percent owned by the Volkswagen Group. The Munich-based truck holding company is the parent company of the truck and bus brands Scania, MAN, International, and a VW-led subsidiary in Brazil. TMS was intended to unite the brands’ rival development organizations. The idea was for around 8,000 developers to work together to develop the next-generation truck kit. The new platform is expected to be available by 2028.
It’s hard to believe that 8,000 developers didn’t lick the problem right away.
Ford Recalls 148k Trucks Over A Brake Fluid Leak
Ford is taking its quality issues seriously lately and has pledged repeatedly that it’s making sure its new vehicles don’t suffer from the same issues that plagued the old ones. Well…
Per Reuters:
The automaker will recall 123,611 vehicles due to a fluid leak that could reduce braking performance and increase stopping distance. This affects certain 2017–18 Ford F-150, Expedition and Lincoln Navigator models.
Dealers are expected to replace the affected parts such as the master cylinder or the brake booster free of charge, the U.S. auto safety regulator said.
Separately, Ford is calling back 24,655 of its 2025 Explorer SUVs as a powertrain control module may reset while driving, which can damage the vehicle’s park system or cause an engine stall, according to the regulator.
I guess it’s good that Ford is catching problems earlier, though the Explorer issues could have been solved much quicker if the company had over-the-air updates available on more models.
What I’m Listening To While Writing TMD
It’s crazy that Oasis managed to blow up so fast and so completely by claiming, before it was even true, that they were “Rock ‘N’ Roll Star(s).” I guess it helps when your lead singer is a complete nut with supermodel good looks and zero self-awareness.
The Big Question
Have you ever bought or sold a car at the right time? How did you do it?
Top photo: Depositphotos.com
I’ve done pretty well with several of mine. I sold my GT-Four for about $4k more than I’d bought it for, the Crown I made like $10k on but that one was a unique situation. My first Miata I bought for $2k, sold for $3500 2 years later, of course had I held it another year it would have easily gone for like $7k, but still. I rarely lose much on my cars, but resale has never been a motivator in getting them. I just get what I want, and have been lucky that others want them too.
I bought a beat to shit ’89 4.0 XJ Cherokee for $1000 cash off a PP summer 2002. I cleaned it, fixed it up, patched, repainted, etc and ran it reliably all winter. Honestly I probably ran it more than my other cars because there is something so freeing about having a beater. At some point I hit a patch of black ice and nailed a guardrail. Bought a primer front fender. Found an ’88 Wagoneer being parted out and grafted on the front clip, as well as snagging another cylinder head. I was offered a $1500 trade on a ’99 WJ in 2004.
“Have you ever bought or sold a car at the right time?”
Yes. Every time I’ve need to do either, I did. If you are not in a lease or looking for profit, then ‘when you want to” is the only metric that matters.
I think pre-ordered cars should force a lot more skin in the game from both parties. For example, TSLA values itself (in part) based on fully-refundable preorders for new cars. I find that really suspicious. People can just walk away for no reason. I know that’s fine in Tesla’s mind, they’ll just sell to someone else.
Conversely, so many stories about people ordering a car, only to get some kind of runaround as delivery nears (to my knowledge, almost no car orders are binding and the dealer has final say). Or in the case of Matt’s friend, costs went up in the interim period, which the company should have to eat. If you can’t hedge for the unknown, you shouldn’t be taking orders yet!
I have no solution, but I’d start with 10% down, nonrefundable, with an agreed-upon price up front. If the dealer f*cks around, they find out by cancelling the order AND giving the customer 10% for their trouble. Something like that. Only then could we rely on preorders as a form of genuine interest or even stock valuations.
Problem with the 10% is that rarely do people even put that much down these days, and if you’re financing 95-150% of the cost, it’s hard to make people put a substantial deposit.
Great point, but I’d wager anyone preordering a car (especially months or years ahead) has “deeper-than-average pockets.” And if the company is a little concerned about the customer, then the deposit solves most of that.
That’s not necessarily true, I know several people who did the Toyota version which just means got their names on a list because for ages that was the only way you could get a new Toyota. I had a buddy order a bronco too and he’s a freaking high school teacher. While I’m sure there are people that are in that situation I don’t know that it’s the norm
Hertz was SO BAD at renting EVs to people. They would take someone who has never owned an EV, who often hadn’t requested an EV, and then send them off with not even a quick explanation of how to use a charger.
Even worse, the cars would frequently rented out without being fully charged.
The most egregious was my in-laws who got a Chevy Bolt that someone had set the maximum charge to 50%. It may have been them accidentally setting it, but I wouldn’t be surprised if it was set when they picked it up. They called panicking because they couldn’t figure out why it only had 100 miles of range each day after being plugged in at their hotel two nights in a row.
Enterprise offered me an EV my last trip to Texas. I would have happily taken it but I had no idea of the state of chargers as I would be staying outside a major city. Turned out my hotel had a charging station, but the only one the immediate area. I ended up in a Mustang convertible instead.
I’ve never timed the market for houses or cars well…but honestly, with the exception of heavily depreciated cars or collector cars, that’s not really a thing. Houses have really high transaction costs, and cars are almost always headed downward (or flat).
I prefer to try to time the stock market, as crazy as it is. I just bought more Carmax since I figure it won’t be long until they’re one of the only games in town for most middle-income people. I also bought some Ford for the dividend, and because the current environment seems like we’re having the government pick winners and losers now. You know, because of that protectionist, anti-business party we collectively elected?
Hey man, you wanna buy a watch?
No man, I’m not into time.
Cause if you had a watch you’d know it’s tight times and tight times ain’t no times fo buyin’ cars in dis here market!
GETCHO MAGA TO PUSH THE TARIFFS!!!!!
I leased a 2021 GMC Canyon AT4 in late 2020.. with dealership employee pricing the lease came out to $0 down $389 a month, which was a steal. I’d say I bought it at the right time.
A little over a year later I had a window smashed, laptop stolen. While it was at the dealer getting the glass replaced, I told the GM to give me a bid for trade in as the theft had me thinking I needed more secure storage (on the road a lot for work with a laptop and such). They offered me $7k more than I paid for the truck a year earlier. I would say I sold it at the right time as well.
Bought wife’s Subaru in early 2021, right before the car shortages/ADMs hit.
Later in 2021, sold my Mom’s Chevy HHR (only 43k) and our 02 Lexus RX (220k) for way more than would have dreamed just 6 months before.
We had also managed to sell our last house back in 2007 just as the market stalled and was starting to fall…whew!! We had already bought a cheaper fixer upper.
Same and similar. I was monitoring the impending shortages staring in January 2021 (seat foam, rubber, aluminum were predicted at that time, but not chips) and bought my wife’s new 2021 Subaru in April 2021, 0% financing, great vehicle. Sold my 2009 Grand Caravan in July 2022 with 106k miles for more than I would have dreamed just 6 months before.
Does buying my Passat TDI a year before Dieselgate came out, then holding it to the bitter end and getting a buy out for as much as I bought it for 4 year earlier count?
Otherwise I managed to flip my Tacoma lease during COVID times, though I caught the beginning of the trailing edge of the craziness.
Have you ever bought or sold a car at the right time?
Sort of? I got a pandemic-inflated value for my Jeep JKU when I traded it for a new 2021 F250, but I got a typical pre-pandemic deal on the truck (~10% below MSRP). At the time, most trucks included a massive “market adjustment” that added tens of thousands to the price tag.
I recall overhearing the sales manager say “we listed it for that price, so we have to honor that” so I think someone made a mistake. I still find it odd they sold it for the advertised price with that trade in value. I assume most dealers would find a way to correct the error or make up the difference some other way. I was offered $10k more than I paid for it when I brought it in for the first oil change and the trade in value I received was higher than other offers, so I think I legitimately got a good deal.
How did you do it?
Luck? Aside from showing up and paying for the truck, I did absolutely nothing to make that deal happen.
I’ve always found that the “right time” is entirely based on the reason to own that particular vehicle. For a daily driver with low cost and low effort as a priority, I like certified used. If it is going well, keep them for the warranty, maybe a bit longer, and then trade it in for another certified used car. It works if you can get to the point where you are just paying cash for the difference, and since here we only pay sales tax on the difference, the transaction costs aren’t too bad. It means we always have one care with little to no risk of costing more than gas, oil changes, and tires.
For most everything else, I spend a lot of time finding the best deal for whatever I want. Oftentimes, it might take a number of months. But I have found that selling well is entirely dependent on having bought well in the first place. The overall market might go up and down, and we all just ride that wave as it happens.
Collector cars are a different beast altogether. There, I have just been very flexible to what is available and shop by price more than by make/model. I have started looking for an older French car, but don’t have many “must haves” that it needs to have. Anything from an Ami to a Twingo would be fun. I just enjoy the search and wait for the right thing to pop up.
So far it’s always been right for at least one of the parties involved in the transaction.
I have never sold at the right time, but I have bought at the right time before. I had a small fleet of 80’s and early 90’s fun cars in the early 2000s for a few hundred bucks each. what value could an 88 RX7 have right. $500 at that time. I sold them off as I needed to or moved on, but I have never thought of a car as in investment to maximize or to plan for holding to resell. I bought cars I liked that made me happy. Speculation steal the joy out of everything.
Three years after last driving it and two years after I’d wrenched on it in any meaningful way, I sold the Sentra to an LKQ for $175. It was literally worth more if I’d taken it apart and sold it piecemeal, but I sold it at the right time for me.
I bought my base manual Honda Fit at the end of February 2020. 16 grand brand new and the peak Carvana offer was 22k. I didn’t take the offer because I’d only have to replace it with an equally overpriced, worse car.
Same, they’d have to pry my Fit out of my hands despite the lack of depreciation.
Given Volkswagen’s track record of late, shouldn’t that be “Part Zweity-Zwei?”
Unless you’re getting a truck or a Mustang, is there really a reason to go with the Ford product unless you’re one of those “I only buy American” folks? It just seems like their quality is permanently shit, there are better and cheaper competitors in most classes, etc. I do know that some people on this site really love their Mach Es so I won’t throw those under the bus, especially now that they have the “not a Tesla” factor that’s stronger than ever.
I just can’t see myself ever choosing a Ford over the competition unless I’m getting a truck or Mustang, and I don’t even necessarily have anything against them, there are just too many phoned in products and quality issues for my liking…and honestly more of that on a macro scale is one of the things that bugs me about the potential tariffs.
I am an American and I like buying American because I believe in supporting our homegrown manufacturing and stimulating the economy, because those things benefit most of us…but I’m not just going to do it if the product is vastly inferior. GM, Ford, and the freedom wings of Stellantis have lineups with a small handful of very good products and then a bunch of shit, particularly when it comes to sedans, crossovers, and minivans.
Maybe I’m un American or whatever but I don’t want to be forced into a shittier product. Slash that isn’t capitalism? And aren’t we all supposed to be doing ruthless end stage turbo capitalism as our founders definitely intended? And let’s be real here-all the American automotive manufacturers are experts at phoning it in in various capacities, and I don’t have the undying faith in the cream rising to the top in the free markets if the government has their hands on the scales. I don’t think it’s far fetched to think the products will get even worse with less competition.
That’s probably enough of that and I tried to be as nice and not name call-ey as I could be. With that out of the way I’d say I sold my GTI at the right-ish time. I bought it literal weeks before the market collapsed during Covid and got a killer deal…something like $5,000 off sticker and it was financed with no interest.
As you all know it didn’t really live up to my ownership expectations for a variety of reasons and I wanted something spicier. The Hyundai Ns were having their moment in the sun and the rest was history. Anyway I basically got what I paid for my GTI before taxes and fees in trade in. For driving a car for 2 years and putting 15,000 miles on it, basically only having to pay the taxes, fees, gas, and insurance was pretty good.
What I did was an objectively stupid financial decision, but I pulled it off about as well as I could’ve and I had a lot of equity in the GTI. Even father who’s as conservative as they get financially and berated me for switching cars after two years, and my accountant father in law admitted later on that I timed everything about perfectly and if I was going to do what I was going to do it was the best outcome.
But now? No new cars anytime soon. I’ve had the Kona N for 3 years and my wife has had her CRV for 5. Her’s has long since been paid off and I only owe about $7,000 on mine. I could pay it off now if I really wanted to but the interest is very low so it doesn’t really make a difference. We will both need bigger cars if we succeed in adding another member to the franchise, but we’ll cross that bridge when it comes. We aren’t even planning on pulling the goalie until this time next year so, so we’re gonna enjoy what we’ve got.
I just applied for a role there. I’ll let you know what I’m doing to fix it when I’m in.
However, I won’t update you when I get the automated email that they’re moving forward with other candidates that more closely match the role. So. Y’know.
As a former Blue Oval employee, I still likely wouldn’t buy anything except for the Trucks, or a mustang. While working there I bought two Hondas, and a Mazda. I’d argue it is more American of people to buy a Toyota made in Kentucky, Honda made in Ohio, or BMW made in South Carolina versus a Chevy made in Korea, Ram made in Mexico, or Ford made in Canada. The non big three brands that have factories here also use suppliers here too.
Ford only makes trucks and Mustangs.
I mean trucks in the traditional sense-body on frame. Not crossovers.
I see cars as transportation and part of my hobby and not as an investment. So when a car is beyond my abilities or bank account to fix and I sell it, that is the right time. When I have has so many problems with a car and I have lost confidence in its reliability and I sell it, that is the right time.
We did sell my wife’s oil disappearing Hyundai Sonata and bought a new Pacifica in late 2020 before car prices skyrocketed. That was probably the right time.
I’ve been lucky with timing on some of my purchases, but attributing it to anything other than vagaries of the market is hubris I think.
As for your friend, trading an RS6 for Uber is about the sharpest downgrade I can imagine.
We bought my wife’s Civic in August 2020. So right when everything was shut down and no one was buying anything because they didn’t know yet what would happen. We actually test drove 8 different vehicles at 8 different dealers with almost no sales pressure before deciding what she liked best. Then bought a brand new car for $20k with 0.9% interest.
Of course, much like your friend above, none of this was planned. We just got lucky.
All I can say for the Traton TMS is hah I may or may not have some info on this but yeah not surprising it is not going well when you pretty much tell multiple companies they need to all be on the same Scania platform.
Sold not so much. Bought, most recent one was during the gas price hike in 2009. I found a new Trailblazer marked down to invoice. Talked a bit more off. The next year when SUVs were popular again, I had one I paid less than a new Civic for.
Every car I’ve ever sold has been “at the right time” because I no longer wanted to deal with keeping them operable (registration/insurance being a big one in the land of ‘all pickup trucks are commercial vehicles and require hundreds of dollars of weight fees’).
It’s always been the right time: the time I wanted or needed to acquire or get rid of a vehicle. If you’re trying to time the market to buy and sell a vehicle for the best financial values, you’ll be disappointed more often than not.
That said, I got my Niro in 2019 and certain events led to a much higher than expected value later on. I ended up waiting until I found something I wanted after I got sick of dealing with Kia’s service dept, so I didn’t make money trading it in, but I got more use out of it than I paid for, so it was fine. But that was an exception.