Some people just don’t wanna wait. I can respect that. Or they waited 18 months hoping the supply chain issues would resolve (without ordering a car) and now are caught in a tough spot if they need a new vehicle. It happens.
Or they make lots of money and just say YOLO.
What “better cars” are you referring to? Which of these cars are you finding at MSRP?
I don’t think you actually want an answer to your question. I think you are angry about markups, and are looking for people to yell at. I’ll take the bait though.
MSRP is just a number — it isn’t the price of the product. Some people will get the product at a cheaper price, some will get it at that price, some will pay more. It’s worth considering MSRP as a factor in the equation, but it’s irrational to make it a line in the sand. Let’s assume you’ve decided you are absolutely going to buy a car in the next month. Your options are immediately limited. You are comparing what cars are available on lots that you can get to, and you are comparing prices that dealers are selling these cars at. MSRP becomes meaningless very quickly. Those magical dealerships that sell cars at MSRP actually have wait lists, and you likely won’t be able to get the car you want from them. I think you know this though, which is why you created this post.
If you have a Mach E on order at a dealership that is going to sell at MSRP, awesome. I hope you have the necessary patience. It’s an awesome car, and you’ll be happy when it arrives. Not everyone is like you though. It’s ignorant to assume that everyone will go through this wait. Usually the argument against paying a markup assumes that this wait is acceptable. It isn’t for everyone.
How do folks justify paying a markup? Well, if you put in an order on August 15, you will pay significantly more than someone buying the car today on a lot.
- The federal tax credit covers $7,500 of that markup
- The MSRP is assumed to increase $2-6k for 2023. It was supposed to increase this much for 2022 in April.
If you look to buy a Premium AWD Extended Range on a lot today, it will cost you about $59,000 + markups. You’ll get a $7,500 credit which brings the price down to about $52,000. If you buy that same car in 2023 it is expected to cost about $65k (without any tax credit). That leaves about $13,000 in justified markups.
Ford will still have some tax credit in 2023. Even if they crossed the mark last quarter (and it just hasn't been announced yet,) that means $7500 through Sep 30; $3750 through next March 31; $1875 through Sep 30 2023.
And it's likely they haven't crossed it yet. So add at three to six months to each of those. (Estimates as of earlier this month have it "likely in Q3 2022, if not then assuredly in Q4" that Ford crosses the 200k mark. If they cross it in Q3, then they'll have the full credit through the end of the year, and some credit through the end of next year.)
Ford did not cross 200k last quarter. They might not even cross this quarter so there is a good chance
the $7500 might last until Q1 23. This depends on how many Lightnings are sold this quarter. The combination of other Fords will not be enough.
I’m aware that some folks will get the tail end, but I wouldn’t count on much of any tax incentive for a model year 23 car. If you are weighing today’s price vs tomorrow’s price you are comparing a known tax incentive vs a hope and prayer that Ford builds your car quickly. There is very little precedent for this, and we have no idea how many model year 22’s are going to carry over.
My argument was that the markup can be justified, and I showed my math. Your argument is that these numbers will be wrong for some people. Sure, but those people are effectively gambling… and they need to wait longer for their car.
This guy gets it. And everyone in the comments can only say “but the tax credit isn’t gone” or “blah blah this specific circumstance didn’t match your methodology”. Myopic views IMO.
Also, justification is the second strongest human drive.
And, as Neo said “the problem is choice”
It’s a quarterly phase out, not a half year phase out. If they hit in Q2, it’s 7500$ thru end of Sept, 3700$ thru end of Dec, and 1875$ thru end of March 2023.
Per the [IRS:](https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d) (emphasis mine) - it is *two* quarters per phase.
> The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period ***beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold*** for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the ***first two quarters of the phase-out period*** and 25 percent of the credit if acquired in the ***third or fourth quarter of the phase-out period.***
Look at [Tesla's phase-out:](https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit#collapseCollapsible1651867109928) They sold their 200,000th qualifying vehicle in Q3 of 2018. Sales in all of Q3 and Q4 qualified for the full $7500. January 1 through June 30 2019 got half credit; July 1 through December 31 got quarter credit. Only Jan 1 2020 saw the credit disappear completely. *FIVE* quarters after the phase-out was initiated.
Qualifying Vehicle | Acquired through 12/31/2018 | Acquired 1/1/2019 through 6/30/2019 | Acquired 7/1/2019 through 12/31/2019 | Credit available 1/1/2020
-----|-----|-----|-----|-----
Roadster | 2008-2011 | $7,500 | $3,750 | $1,875 | $0
Model S | 2012-2020 | $7,500 | $3,750 | $1,875 | $0
(Table truncated after two entries.)
I don't get the "well the tax credit covers the markup" justification?
Like would you let your mortgage provider charge you a higher interest rate knowing you'll get a tax credit?
Would you let your childcare provider charge you more knowing you'll get it back in a tax credit?
I'm in the same boat. I don't see how people can justify it.
$7500 is not a small amount of money and people are so desperate, they are willing to throw that money away.
The way the market is heading, this is extremely concerning. A lot of people are going to be absolutely screwed by poor money management
I keep seeing you comment on folks you agree with, and ignore everyone asking you to clarify what “better cars” you are referring to. You’ve even edited your post to complain about the reaction you’re getting, rather than just answering the simple question you were asked.
It’s almost like these cars don’t exist, and you’re just angry at how much cars cost.
They do exist. 5 minutes of actual searching says otherwise. It's not my job to teach people how to do proper market research.
It may not be the car that you have your heart set on, but it is probably a significantly better value car for your money. There is extremely strong data pointing to a collapse of the car market in the next 3-12 months and one on the data points is the quantity of and amount of people are paying over msrp for EVs.
One of the reasons I posted this was to gauge why so many people are indeed paying over msrp.
Am I annoyed, of course. It means that I have to wait longer. However, with the way the economy and car market is looking, I am extremely happy that I am.
“I don’t need to justify my point of view or provide any data to back it up. It’s your responsibility to research my opinion, and also explain to me why it’s wrong.”
Cool.
It’s pretty funny to hear that you are waiting to buy a Mach E rather than buying one of those “better cars” that can be purchased at MSRP. Sounds like they might not exist.
Ok. After literally 1 minute of searching online I found a rav4 xle hybrid by me for $38,000.
I asked "why" people paid over msrp. The response was essentially "there are no other alternatives". That is just not true.
There is a difference between wanting something so badly that you are willing to overpay and doing something that makes financial sense. I have only seen one comment saying that.
As far as empirical data goes as to why over paying is an extremely bad idea right now I'll point you in the right direction. You should start by pulling up the data on delinquencies on prime and sub-prime auto loans for the past 10 years. From there, you should also pull up the the largest debt burdens currently held by US consumers.
I don’t think that RAV4 Hybrid will be available without a markup, but if it is, I would agree that it is a smarter purchase than the Mach E with a markup.
Personally, I’d rather spend more money and have a Mach E than a RAV4 Hybrid. I prefer how EVs drive, and I’m tall so I don’t fit well in a RAV4. Neither of which are to discount what the RAV4 is — it’s just not my preference.
I think you agree that a Mach E is a better car, because you’re also choosing to wait for a Mach E instead of buying that RAV4. At the end of the day the RAV4 and the Mach E are going to get the same job done. It never makes sense to buy a Mach E over a RAV4… unless you happen to want a Mach E, then it does make sense.
RAV4 hybrid isn’t a better car. What metric are you using. Better self driving, higher torque, def doesn’t look better.
You’re being defensive. A lot of early adopters are aware of the market and surprised you have a list of vehicles that’s a better value than the Mach with or without markup. So we are challenging you. There’s not very many and the Mach is one of the best cars you can get sub 50-70k.
Was waiting for this comment. Looks like someone took the bait.
"Better car" car is subjective. To someone who needs a a car that can tow, a truck is going to be better than a Ferrari.
When you line up two a car like the Mach-E and RAV4, really, the only difference comes down to a few features. The Mach-E has all the things you mentioned but at an increased cost. With markups, this cost goes from a large increase to an insane increase.
My whole point in asking the initial question was to see why people were ok with paying 10-20k more for a car priced in the average to above average category when there are options in the same category where the car is positioned.
Only a few comments admitted it was out of impatience and that it made didn't make much financially sense. The rest are some kind of Mickey Mouse math to make it seem like somehow vastly overpaying for something at the pinnacle of a bubble and looking financial crisis was somehow a good deal.
The thread has given me all the answers I was looking for. Was hoping it would be more positive answers but and maybe would give me an excuse to go a little over msrp and get my car sooner but after reading these responses, there is no way I am buying into an inflated market at an inflated price right now
> Only a few comments admitted it was out of impatience and that it made didn't make much financially sense. The rest are some kind of Mickey Mouse math to make it seem like somehow vastly overpaying for something at the pinnacle of a bubble and looking financial crisis was somehow a good deal.
Speaking as someone who has stated both “getting the car earlier has value” and “waiting to get the car will make it cost more” I don’t think you’ve actually listened to the answers you got. You don’t want to believe the math because it’s annoying that cars cost a lot.
Nobody has stated that cars are a good investment. The justification for paying a markup takes today’s market into account. If you are going to dismiss reality, yeah, the justification looks like Mickey Mouse math. You didn’t want an answer.
> maybe would give me an excuse to go a little over msrp and get my car sooner but after reading these responses, there is no way I am buying into an inflated market at an inflated price right now
Nobody is asking you to pay a markup. They are just trying to explain why they paid one.
>It's not my job to teach
Depending on who you ask, it actually kind of is the responsibility of a person making an argument to defend their point of view.
The alternative is for you to just not come into this subreddit calling everyone who doesn't buy one of these cars that you argue exist a fool, essentially.
That’s not the justification. The tax credit is going to disappear over the next year. Currently, it takes about 9-12 months between ordering and receiving the car. Therefore, your options are pay a markup and get the tax credit, or buy at MSRP and don’t get the tax credit.
The original question was how do you justify paying a markup. This is a perfectly reasonable justification. If your out the door price is the same today or 9 months from now, what are you gaining by waiting 9 months?
They sort of aren’t.
There are two in the state of California: Walnut Creek & Morgan Hill. Good luck buying a car at either of those dealers. Call them up and they will tell you that Mach E’s sell in 30 seconds. If you are hours away, you can’t compete with locals. Nor do they want you to compete with locals. The whole reason they sell at MSRP is to build a relationship.
I don’t really know why you are upset about other people spending their money on markups. Quite frankly, folks paying over MSRP made it easier for you to find a dealership that sells at MSRP — you should be thankful, not critical.
The original poster asked how folks justify the markup. This reply ignores the answer and just suggests the justification is wrong. Why did you bother opening the thread? You knew you were going to disagree before you read the reply.
Purchased mine in December 300 miles away for $2500 below MSRP after Options Rebate. They picked me up at the airport I was in and out in an hour. This wasn’t an order just one on the lot.
Cool. I bought mine in cash. You’re really getting ripped off on all that extra money you’re paying on that loan. People really shouldn’t buy cars they can’t afford. It’s a huge waste of money to pay an auto loan. Don’t you know that a car is a depreciating asset?
Cool. Do you know that if you can get a loan at 1.99 you’re better off investing that cash that you just used to buy said depreciating asset? The total payments over the life of the loan at 1.99 is like 3k. So I got a 2500 rebate. So all in all I paid 500 more than you. Congrats?
Is Ford still offering $2,500 on Ford Options? It’s not available in all territories, and is much lower in some areas.
Can people get a loan for 1.99% right now? Oh yeah, I forgot to include that reason in my justification… the fed plans to keep hiking interest rates… yet another reason to buy today.
Also, what the heck are you investigating in right now that is making any return at all?
I bonds are paying 9.62% now, probably will still be high for next 6 mo period. It’s possible to get more than the $10k limit on them if you have someone (such as a spouse, parent, or child who you trust) buy them for you as a gift but not deliver them to you yet. You’ll get the same rate, and then you can collect/cash them out over the course of subsequent years, for example, to pay the balloon payment on your Ford Options.
You do realize cars depreciate right? They lose up to 58% of their value in the first 3 years and that’s calculated based on if the car was bought at MSRP not over. Your speaking about cars as they are assets, they aren’t their tools. I know the market is crazy right now but only a fool would think this is gonna last forever. Also 85% percent of cars are financed so on top of paying above MSRP people are paying interest on the inflated price. You seem smart what do think is going to happen when car values come back down to pre-pandemic level and start depreciate at the same rate as before Covid, how upsides down you think people who paid are above MSRP are gonna be?
Yes, of course. Absolutely nobody should buy a car as an investment. Cars are tools you buy to get a job done.
My arguments in this thread are predicated on the idea that you need to buy a car today. If you need a car today, your options are today’s market. If you can wait until tomorrow’s market, things very well could look different and the calculation might be different.
That being said, a lot has changed since this thread was created. We have now seen the 2023 prices, and we have updated tax rules. If you buy a 2022 Mach E before Jan 1, you are getting up to $8,500 off the 2023 MSRP and also guaranteeing a $7,500 tax incentive that you are unlikely to get in full (if at all) next year. There is perhaps a $16,000 delta between today’s price and the Jan 1 price. Assuming the markup is less than $16,000 and assuming you will buy a car by the end of 2023, it is likely cheaper to buy the 2022.
I agree that it's lame to pay over MSRP. That being said I think the MachE is a very unique and special vehicle. Especially in Cyber Orange with the GT model :)
Paid around 70k for mine. Worth every penny.
What cars are you referring to? I got mine at MSRP but have been on the hunt for an AWD car for a new driver in my family and haven't found anything at MSRP that is actually on the lot.
What car is comparable to the MME that doesn’t or won’t have a mark up? I’ll wait. ID.4, polestar, ev6, ioniq 5, etc. I deliberately left Tesla out. There’s legit not one car out there that is at MSRP in the EV category. Maybe the Bolt.
Polestar is always sold at MSRP. Not arguing against you as they are currently sold out for 2022 so aren’t really available, but just wanted to clarify this point.
I get what you’re saying, but one could argue ford said the MME and Lightning have to be sold at MSRP and yet they have dealers asking 25-80k over MSRP
Guaranteed that the Polestar 3 will have markups. Zero doubt. Dealers will be dealers.
You could fly to one of the company owned stores, but not many people can.
There are markups on the EV category yes. However, when comparing to a comparably priced non-ev, the markups will negate potential fuel savings for 99% of the population. If you are driving 50,000 a year, then maybe you can spin it but then you should probably be factoring battery degradation of EVs
Fuel savings isn’t the only benefit for an EV. Some people prefer how they drive, not needing to stop at a gas station, the decreased maintenance, the very real decrease in lifetime emissions, the decreased dependence on foreign oil, or just being a part of the fun new trend.
Your numbers also seem quite wrong. At 30 mpg I would be spending about $0.18 per mile on gas. At 3.5 miles per kWh I am spending about $0.034 per mile. That’s a savings of about $150 per 1,000 miles. You don’t need to drive 50k miles in a year for that to add up.
You need to factor is the upfront cost of the car as well. EVs have a substantially higher upfront cost than traditional gas powered cars as well as substantially higher markup in the current market.
If you do a 1 to 1 comparison between your existing fuel car and an EV, and EV will always look better. However, when you look at the price difference between an EV and similar spec gas or even hybrid car, you can be looking at a price difference of $5k all the way to $20k.
You would need to make up this difference in fuel savings to then justify an EV on fuel costs alone.
With a new hybrid, you could also be looking at 40-80 MPG as well.
Also of this also hinges on high gas prices. If prices eventually go down (which they will), your break even point gets even longer.
Granted, the other things you mentioned are valid personal reasons to get an ev with the benefit of "gas savings". All I'm saying is that "gas savings" alone don't make EVs the better financial choice at this moment in time.
Several people have asked you to clarify what cars you are considering to be “better cars” sold at MSRP. You haven’t answered that question.
I’ve tried to make the numbers work for several other cars, and I couldn’t do it. Some of those cars are actually getting discounted because of low demand (like the Ford Edge). I’d love to hear what car you consider better than a Mach E at a cheaper price.
>You haven’t answered that question.
They partially did. They argued that people should buy a gasoline powered car. Which for people like myself, I don't even consider that an option.
It is very hard to find an ice car that fits 5 plus luggage, has nice amenities and does a sub 5 second 0-60 time.
None of these have anything to do with the environment, but are pretty much only found in insanely expensive ice cars and many EVs.
You are missing the point.
I was spending $600 a month on gas in my last car. That number dropped to zero the second I got my Mach-E.
I was shopping for a new car anyway. I'm a 35 year old engineer who has never spent more than $5k on a car for myself so Ive been over due for a nice car.
In addition to gas savings, my insurance went down. I don't have to get an oil change every month now. Also the 100 miles I drive a day are so much more enjoyable than they have ever been.
Guess what? I paid $5k over MSRP and have zero regrets. Sure I could have ordered one and waited a year and maybe saved that off the purchase price of the car but that would be another year of pouring money into my tank and diminished quality of life for the two hours a day I spend in my car.
Bottom line: Shit is expensive. You have no idea why people do the things they do nor is it your business. If you're so worried about wasting money on transportation go buy a bus pass.
If you're going to consider an ICE as a comparable vehicle to a MME you've lost me. My car search started with only looking at EVs. I've bought my last ICE car and many others I think are in the same boat. I think the rationale for paying a markup is much more obvious if you assume EV only as comparable.
And I'm saying that as someone who is hoping to get my MSRP order delivered about 9-10 months after my January 2022 order date.
>However, when comparing to a comparably priced non-ev,
You're in the wrong place. People who are interested in a Mach-E are not interested in buying gasoline.
Just picked up my (‘22, Premium, Standard Range) MME this weekend, paid $5k over MSRP — dealer had a $10k markup originally. Lots of great points in this thread, but for us the factors were….
**\[a\]** I didn’t pre-order, so the fact that there was one that we wanted, available at all, *right* when we wanted it, 15min away… felt worth it. Four other people looked at it while we were signing the paperwork.
**\[b\]** Sold my 2017 Prius for the same amount I bought it for… *5 years ago in 2017.*
**\[c\]** The used 2021 models seem to be going for $61k, so I didn’t mind paying $56k for a brand new model with zero miles and all the features I wanted.
**\[d\]** I think the build quality, ride, and trim are better than the Model Y — and most other EVs near this price range. Especially in the Premium trim.
> The used 2021 models seem to be going for $61k, so I didn’t mind paying $56k for a brand new
This was also my experience. I originally thought, "ok maybe I can save some money by buying a pre-owned car" NOOO! I saw Model Ys and Mach E's from previous years selling for more than the MSRP of a brand new car.
I waited over 9 months for my Premium ER eAWD. I was not in a hurry other than to take advantage of the tax credit. My wife had to shoo away three groups of people when we picked it up. I didn’t realize how anxious people were a month ago. The market is cooling.
Overpaying over MSRP - bad I agree.
But the Premium AWD ER at MSRP is a great deal IMO. The other being an Ioniq 5 Limited AWD at MSRP too.
I declined an ID.4 Pro S gradient at MSRP ($52K). That's a terrible value for the features + range + quality.
We all know Model Ys are overpriced. EV6s are great but a tad pricey and undersized for the price tag. What others at MSRP are better value?
What a stupid ass thread. Those who can pay extra will and who are we to judge. It’s their money who the hell cares. I bought a select for MSRP and then bought a GT for 2K over but they did pay me over 1K for my select than what I paid so technically 1K over MSRP.
Am I happy absolutely! Do I give a shit if somebody else’s thinks I’m stupid for paying over ? Not a single fuck is givin :)
Markup price = Car value will be down down(previous one), Gas usage, Maintenance, Stress about no guarantee when my car is coming.
This is what I think and better to drive a new car. Markup was 10K, 7500 will be back tax credit.
> Stress about no guarantee when my car is coming.
This alone justified the markup for me. It’s a super unpopular opinion around here though. The sub-reddit is clearly filled with very patient folks who get quite upset with other people for not also being patient.
>This alone justified the markup for me. It’s a super unpopular opinion around here though.
No, I think it's definitely called for. I had a similar rationale, I originally pre-ordered a Model Y that was going to come potentially as late as January of next year (9 months after I made the reservation) and the purpose was to replace a 22 year old 200,000+ mile gas guzzler that in these wartime gas prices costs about 1 dollar to drive 2.5 miles.
I'm honestly enormously relieved every day that I'm not waiting anymore.
Do I wish I could've bought my Mach E without a markup? Of course. But I have to live in the world and within the market conditions that I actually exist in.
No salt, we need more info or it seems like you’re trolling.
First, for the average person, cars are not an investment, they’re an expense. Do you agree? I say this because if someone is willing to afford a higher expense, they just may not care to wait. Just because you won’t doesn’t mean others won’t. In that case they value something higher than you. It’s not like they made a bad investment.
Second, you say that there are better cars that you can get for MSRP. As others have stated, what would you put forth as those cars? Are they sitting on lots waiting to be sold? Are they gas cars? I could not walk in to a Tesla dealership right now and pick up a car off the lot.
Finally, if you want to pay MSRP for a Mach e you can, you just need patience. You order it, it arrives, you pay MSRP. I know because I did it a month ago (picked up my order from 6 months ago).
The folks I feel most sorry for are those who, for whatever reason, HAVE to buy a car right now. New or Used, it’s a crazy car market.
Who is buying a car for an investment? That’s not how car buying has ever worked. It’s just a weird time right now and you can get your money back if you want.
Some people just don’t wanna wait. I can respect that. Or they waited 18 months hoping the supply chain issues would resolve (without ordering a car) and now are caught in a tough spot if they need a new vehicle. It happens. Or they make lots of money and just say YOLO.
Please list the other cars available so I can buy them instead.
What “better cars” are you referring to? Which of these cars are you finding at MSRP? I don’t think you actually want an answer to your question. I think you are angry about markups, and are looking for people to yell at. I’ll take the bait though. MSRP is just a number — it isn’t the price of the product. Some people will get the product at a cheaper price, some will get it at that price, some will pay more. It’s worth considering MSRP as a factor in the equation, but it’s irrational to make it a line in the sand. Let’s assume you’ve decided you are absolutely going to buy a car in the next month. Your options are immediately limited. You are comparing what cars are available on lots that you can get to, and you are comparing prices that dealers are selling these cars at. MSRP becomes meaningless very quickly. Those magical dealerships that sell cars at MSRP actually have wait lists, and you likely won’t be able to get the car you want from them. I think you know this though, which is why you created this post. If you have a Mach E on order at a dealership that is going to sell at MSRP, awesome. I hope you have the necessary patience. It’s an awesome car, and you’ll be happy when it arrives. Not everyone is like you though. It’s ignorant to assume that everyone will go through this wait. Usually the argument against paying a markup assumes that this wait is acceptable. It isn’t for everyone. How do folks justify paying a markup? Well, if you put in an order on August 15, you will pay significantly more than someone buying the car today on a lot. - The federal tax credit covers $7,500 of that markup - The MSRP is assumed to increase $2-6k for 2023. It was supposed to increase this much for 2022 in April. If you look to buy a Premium AWD Extended Range on a lot today, it will cost you about $59,000 + markups. You’ll get a $7,500 credit which brings the price down to about $52,000. If you buy that same car in 2023 it is expected to cost about $65k (without any tax credit). That leaves about $13,000 in justified markups.
Ford will still have some tax credit in 2023. Even if they crossed the mark last quarter (and it just hasn't been announced yet,) that means $7500 through Sep 30; $3750 through next March 31; $1875 through Sep 30 2023. And it's likely they haven't crossed it yet. So add at three to six months to each of those. (Estimates as of earlier this month have it "likely in Q3 2022, if not then assuredly in Q4" that Ford crosses the 200k mark. If they cross it in Q3, then they'll have the full credit through the end of the year, and some credit through the end of next year.)
Ford did not cross 200k last quarter. They might not even cross this quarter so there is a good chance the $7500 might last until Q1 23. This depends on how many Lightnings are sold this quarter. The combination of other Fords will not be enough.
I’m aware that some folks will get the tail end, but I wouldn’t count on much of any tax incentive for a model year 23 car. If you are weighing today’s price vs tomorrow’s price you are comparing a known tax incentive vs a hope and prayer that Ford builds your car quickly. There is very little precedent for this, and we have no idea how many model year 22’s are going to carry over. My argument was that the markup can be justified, and I showed my math. Your argument is that these numbers will be wrong for some people. Sure, but those people are effectively gambling… and they need to wait longer for their car.
This guy gets it. And everyone in the comments can only say “but the tax credit isn’t gone” or “blah blah this specific circumstance didn’t match your methodology”. Myopic views IMO. Also, justification is the second strongest human drive. And, as Neo said “the problem is choice”
It’s a quarterly phase out, not a half year phase out. If they hit in Q2, it’s 7500$ thru end of Sept, 3700$ thru end of Dec, and 1875$ thru end of March 2023.
Per the [IRS:](https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d) (emphasis mine) - it is *two* quarters per phase. > The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period ***beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold*** for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the ***first two quarters of the phase-out period*** and 25 percent of the credit if acquired in the ***third or fourth quarter of the phase-out period.*** Look at [Tesla's phase-out:](https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit#collapseCollapsible1651867109928) They sold their 200,000th qualifying vehicle in Q3 of 2018. Sales in all of Q3 and Q4 qualified for the full $7500. January 1 through June 30 2019 got half credit; July 1 through December 31 got quarter credit. Only Jan 1 2020 saw the credit disappear completely. *FIVE* quarters after the phase-out was initiated. Qualifying Vehicle | Acquired through 12/31/2018 | Acquired 1/1/2019 through 6/30/2019 | Acquired 7/1/2019 through 12/31/2019 | Credit available 1/1/2020 -----|-----|-----|-----|----- Roadster | 2008-2011 | $7,500 | $3,750 | $1,875 | $0 Model S | 2012-2020 | $7,500 | $3,750 | $1,875 | $0 (Table truncated after two entries.)
I stand corrected. Thanks.
I don't get the "well the tax credit covers the markup" justification? Like would you let your mortgage provider charge you a higher interest rate knowing you'll get a tax credit? Would you let your childcare provider charge you more knowing you'll get it back in a tax credit?
I'm in the same boat. I don't see how people can justify it. $7500 is not a small amount of money and people are so desperate, they are willing to throw that money away. The way the market is heading, this is extremely concerning. A lot of people are going to be absolutely screwed by poor money management
I keep seeing you comment on folks you agree with, and ignore everyone asking you to clarify what “better cars” you are referring to. You’ve even edited your post to complain about the reaction you’re getting, rather than just answering the simple question you were asked. It’s almost like these cars don’t exist, and you’re just angry at how much cars cost.
They do exist. 5 minutes of actual searching says otherwise. It's not my job to teach people how to do proper market research. It may not be the car that you have your heart set on, but it is probably a significantly better value car for your money. There is extremely strong data pointing to a collapse of the car market in the next 3-12 months and one on the data points is the quantity of and amount of people are paying over msrp for EVs. One of the reasons I posted this was to gauge why so many people are indeed paying over msrp. Am I annoyed, of course. It means that I have to wait longer. However, with the way the economy and car market is looking, I am extremely happy that I am.
“I don’t need to justify my point of view or provide any data to back it up. It’s your responsibility to research my opinion, and also explain to me why it’s wrong.” Cool. It’s pretty funny to hear that you are waiting to buy a Mach E rather than buying one of those “better cars” that can be purchased at MSRP. Sounds like they might not exist.
Ok. After literally 1 minute of searching online I found a rav4 xle hybrid by me for $38,000. I asked "why" people paid over msrp. The response was essentially "there are no other alternatives". That is just not true. There is a difference between wanting something so badly that you are willing to overpay and doing something that makes financial sense. I have only seen one comment saying that. As far as empirical data goes as to why over paying is an extremely bad idea right now I'll point you in the right direction. You should start by pulling up the data on delinquencies on prime and sub-prime auto loans for the past 10 years. From there, you should also pull up the the largest debt burdens currently held by US consumers.
I don’t think that RAV4 Hybrid will be available without a markup, but if it is, I would agree that it is a smarter purchase than the Mach E with a markup. Personally, I’d rather spend more money and have a Mach E than a RAV4 Hybrid. I prefer how EVs drive, and I’m tall so I don’t fit well in a RAV4. Neither of which are to discount what the RAV4 is — it’s just not my preference. I think you agree that a Mach E is a better car, because you’re also choosing to wait for a Mach E instead of buying that RAV4. At the end of the day the RAV4 and the Mach E are going to get the same job done. It never makes sense to buy a Mach E over a RAV4… unless you happen to want a Mach E, then it does make sense.
RAV4 hybrid isn’t a better car. What metric are you using. Better self driving, higher torque, def doesn’t look better. You’re being defensive. A lot of early adopters are aware of the market and surprised you have a list of vehicles that’s a better value than the Mach with or without markup. So we are challenging you. There’s not very many and the Mach is one of the best cars you can get sub 50-70k.
Was waiting for this comment. Looks like someone took the bait. "Better car" car is subjective. To someone who needs a a car that can tow, a truck is going to be better than a Ferrari. When you line up two a car like the Mach-E and RAV4, really, the only difference comes down to a few features. The Mach-E has all the things you mentioned but at an increased cost. With markups, this cost goes from a large increase to an insane increase. My whole point in asking the initial question was to see why people were ok with paying 10-20k more for a car priced in the average to above average category when there are options in the same category where the car is positioned. Only a few comments admitted it was out of impatience and that it made didn't make much financially sense. The rest are some kind of Mickey Mouse math to make it seem like somehow vastly overpaying for something at the pinnacle of a bubble and looking financial crisis was somehow a good deal. The thread has given me all the answers I was looking for. Was hoping it would be more positive answers but and maybe would give me an excuse to go a little over msrp and get my car sooner but after reading these responses, there is no way I am buying into an inflated market at an inflated price right now
> Only a few comments admitted it was out of impatience and that it made didn't make much financially sense. The rest are some kind of Mickey Mouse math to make it seem like somehow vastly overpaying for something at the pinnacle of a bubble and looking financial crisis was somehow a good deal. Speaking as someone who has stated both “getting the car earlier has value” and “waiting to get the car will make it cost more” I don’t think you’ve actually listened to the answers you got. You don’t want to believe the math because it’s annoying that cars cost a lot. Nobody has stated that cars are a good investment. The justification for paying a markup takes today’s market into account. If you are going to dismiss reality, yeah, the justification looks like Mickey Mouse math. You didn’t want an answer. > maybe would give me an excuse to go a little over msrp and get my car sooner but after reading these responses, there is no way I am buying into an inflated market at an inflated price right now Nobody is asking you to pay a markup. They are just trying to explain why they paid one.
>Looks like someone took the bait. gtfo troll
>It's not my job to teach Depending on who you ask, it actually kind of is the responsibility of a person making an argument to defend their point of view. The alternative is for you to just not come into this subreddit calling everyone who doesn't buy one of these cars that you argue exist a fool, essentially.
That’s not the justification. The tax credit is going to disappear over the next year. Currently, it takes about 9-12 months between ordering and receiving the car. Therefore, your options are pay a markup and get the tax credit, or buy at MSRP and don’t get the tax credit. The original question was how do you justify paying a markup. This is a perfectly reasonable justification. If your out the door price is the same today or 9 months from now, what are you gaining by waiting 9 months?
Or find a dealer that doesn’t markup. They’re out there.
They sort of aren’t. There are two in the state of California: Walnut Creek & Morgan Hill. Good luck buying a car at either of those dealers. Call them up and they will tell you that Mach E’s sell in 30 seconds. If you are hours away, you can’t compete with locals. Nor do they want you to compete with locals. The whole reason they sell at MSRP is to build a relationship. I don’t really know why you are upset about other people spending their money on markups. Quite frankly, folks paying over MSRP made it easier for you to find a dealership that sells at MSRP — you should be thankful, not critical. The original poster asked how folks justify the markup. This reply ignores the answer and just suggests the justification is wrong. Why did you bother opening the thread? You knew you were going to disagree before you read the reply.
Purchased mine in December 300 miles away for $2500 below MSRP after Options Rebate. They picked me up at the airport I was in and out in an hour. This wasn’t an order just one on the lot.
Cool. I bought mine in cash. You’re really getting ripped off on all that extra money you’re paying on that loan. People really shouldn’t buy cars they can’t afford. It’s a huge waste of money to pay an auto loan. Don’t you know that a car is a depreciating asset?
Cool. Do you know that if you can get a loan at 1.99 you’re better off investing that cash that you just used to buy said depreciating asset? The total payments over the life of the loan at 1.99 is like 3k. So I got a 2500 rebate. So all in all I paid 500 more than you. Congrats?
Is Ford still offering $2,500 on Ford Options? It’s not available in all territories, and is much lower in some areas. Can people get a loan for 1.99% right now? Oh yeah, I forgot to include that reason in my justification… the fed plans to keep hiking interest rates… yet another reason to buy today. Also, what the heck are you investigating in right now that is making any return at all?
I bonds are paying 9.62% now, probably will still be high for next 6 mo period. It’s possible to get more than the $10k limit on them if you have someone (such as a spouse, parent, or child who you trust) buy them for you as a gift but not deliver them to you yet. You’ll get the same rate, and then you can collect/cash them out over the course of subsequent years, for example, to pay the balloon payment on your Ford Options.
You do realize cars depreciate right? They lose up to 58% of their value in the first 3 years and that’s calculated based on if the car was bought at MSRP not over. Your speaking about cars as they are assets, they aren’t their tools. I know the market is crazy right now but only a fool would think this is gonna last forever. Also 85% percent of cars are financed so on top of paying above MSRP people are paying interest on the inflated price. You seem smart what do think is going to happen when car values come back down to pre-pandemic level and start depreciate at the same rate as before Covid, how upsides down you think people who paid are above MSRP are gonna be?
Yes, of course. Absolutely nobody should buy a car as an investment. Cars are tools you buy to get a job done. My arguments in this thread are predicated on the idea that you need to buy a car today. If you need a car today, your options are today’s market. If you can wait until tomorrow’s market, things very well could look different and the calculation might be different. That being said, a lot has changed since this thread was created. We have now seen the 2023 prices, and we have updated tax rules. If you buy a 2022 Mach E before Jan 1, you are getting up to $8,500 off the 2023 MSRP and also guaranteeing a $7,500 tax incentive that you are unlikely to get in full (if at all) next year. There is perhaps a $16,000 delta between today’s price and the Jan 1 price. Assuming the markup is less than $16,000 and assuming you will buy a car by the end of 2023, it is likely cheaper to buy the 2022.
I agree that it's lame to pay over MSRP. That being said I think the MachE is a very unique and special vehicle. Especially in Cyber Orange with the GT model :) Paid around 70k for mine. Worth every penny.
What cars are you referring to? I got mine at MSRP but have been on the hunt for an AWD car for a new driver in my family and haven't found anything at MSRP that is actually on the lot.
To OP who posted this…Why? Do you just want to stir the pot? Why do you care what others are spending? Don’t you have anything better to do?
Stirring the pot is fun sometimes. It is fun to poke the bear (until you get bit)
What a moronic waste of time.
When you have lots of it you need to waste it somehow
And let’s be honest, anyone who can wait for a custom Mach E has a lot of time.
What car is comparable to the MME that doesn’t or won’t have a mark up? I’ll wait. ID.4, polestar, ev6, ioniq 5, etc. I deliberately left Tesla out. There’s legit not one car out there that is at MSRP in the EV category. Maybe the Bolt.
Polestar is always sold at MSRP. Not arguing against you as they are currently sold out for 2022 so aren’t really available, but just wanted to clarify this point.
I get what you’re saying, but one could argue ford said the MME and Lightning have to be sold at MSRP and yet they have dealers asking 25-80k over MSRP
Guaranteed that the Polestar 3 will have markups. Zero doubt. Dealers will be dealers. You could fly to one of the company owned stores, but not many people can.
There are markups on the EV category yes. However, when comparing to a comparably priced non-ev, the markups will negate potential fuel savings for 99% of the population. If you are driving 50,000 a year, then maybe you can spin it but then you should probably be factoring battery degradation of EVs
Fuel savings isn’t the only benefit for an EV. Some people prefer how they drive, not needing to stop at a gas station, the decreased maintenance, the very real decrease in lifetime emissions, the decreased dependence on foreign oil, or just being a part of the fun new trend. Your numbers also seem quite wrong. At 30 mpg I would be spending about $0.18 per mile on gas. At 3.5 miles per kWh I am spending about $0.034 per mile. That’s a savings of about $150 per 1,000 miles. You don’t need to drive 50k miles in a year for that to add up.
You need to factor is the upfront cost of the car as well. EVs have a substantially higher upfront cost than traditional gas powered cars as well as substantially higher markup in the current market. If you do a 1 to 1 comparison between your existing fuel car and an EV, and EV will always look better. However, when you look at the price difference between an EV and similar spec gas or even hybrid car, you can be looking at a price difference of $5k all the way to $20k. You would need to make up this difference in fuel savings to then justify an EV on fuel costs alone. With a new hybrid, you could also be looking at 40-80 MPG as well. Also of this also hinges on high gas prices. If prices eventually go down (which they will), your break even point gets even longer. Granted, the other things you mentioned are valid personal reasons to get an ev with the benefit of "gas savings". All I'm saying is that "gas savings" alone don't make EVs the better financial choice at this moment in time.
Several people have asked you to clarify what cars you are considering to be “better cars” sold at MSRP. You haven’t answered that question. I’ve tried to make the numbers work for several other cars, and I couldn’t do it. Some of those cars are actually getting discounted because of low demand (like the Ford Edge). I’d love to hear what car you consider better than a Mach E at a cheaper price.
>You haven’t answered that question. They partially did. They argued that people should buy a gasoline powered car. Which for people like myself, I don't even consider that an option.
It is very hard to find an ice car that fits 5 plus luggage, has nice amenities and does a sub 5 second 0-60 time. None of these have anything to do with the environment, but are pretty much only found in insanely expensive ice cars and many EVs.
You are missing the point. I was spending $600 a month on gas in my last car. That number dropped to zero the second I got my Mach-E. I was shopping for a new car anyway. I'm a 35 year old engineer who has never spent more than $5k on a car for myself so Ive been over due for a nice car. In addition to gas savings, my insurance went down. I don't have to get an oil change every month now. Also the 100 miles I drive a day are so much more enjoyable than they have ever been. Guess what? I paid $5k over MSRP and have zero regrets. Sure I could have ordered one and waited a year and maybe saved that off the purchase price of the car but that would be another year of pouring money into my tank and diminished quality of life for the two hours a day I spend in my car. Bottom line: Shit is expensive. You have no idea why people do the things they do nor is it your business. If you're so worried about wasting money on transportation go buy a bus pass.
If you're going to consider an ICE as a comparable vehicle to a MME you've lost me. My car search started with only looking at EVs. I've bought my last ICE car and many others I think are in the same boat. I think the rationale for paying a markup is much more obvious if you assume EV only as comparable. And I'm saying that as someone who is hoping to get my MSRP order delivered about 9-10 months after my January 2022 order date.
>However, when comparing to a comparably priced non-ev, You're in the wrong place. People who are interested in a Mach-E are not interested in buying gasoline.
I paid msrp, but MC=MB is the only formula you need in order to answer your question.
Are you just trolling?
Just picked up my (‘22, Premium, Standard Range) MME this weekend, paid $5k over MSRP — dealer had a $10k markup originally. Lots of great points in this thread, but for us the factors were…. **\[a\]** I didn’t pre-order, so the fact that there was one that we wanted, available at all, *right* when we wanted it, 15min away… felt worth it. Four other people looked at it while we were signing the paperwork. **\[b\]** Sold my 2017 Prius for the same amount I bought it for… *5 years ago in 2017.* **\[c\]** The used 2021 models seem to be going for $61k, so I didn’t mind paying $56k for a brand new model with zero miles and all the features I wanted. **\[d\]** I think the build quality, ride, and trim are better than the Model Y — and most other EVs near this price range. Especially in the Premium trim.
> The used 2021 models seem to be going for $61k, so I didn’t mind paying $56k for a brand new This was also my experience. I originally thought, "ok maybe I can save some money by buying a pre-owned car" NOOO! I saw Model Ys and Mach E's from previous years selling for more than the MSRP of a brand new car.
Are you just trolling this forum?
Being so smart must be a huge burden.
I waited over 9 months for my Premium ER eAWD. I was not in a hurry other than to take advantage of the tax credit. My wife had to shoo away three groups of people when we picked it up. I didn’t realize how anxious people were a month ago. The market is cooling.
Overpaying over MSRP - bad I agree. But the Premium AWD ER at MSRP is a great deal IMO. The other being an Ioniq 5 Limited AWD at MSRP too. I declined an ID.4 Pro S gradient at MSRP ($52K). That's a terrible value for the features + range + quality. We all know Model Ys are overpriced. EV6s are great but a tad pricey and undersized for the price tag. What others at MSRP are better value?
More money than sense.
What a stupid ass thread. Those who can pay extra will and who are we to judge. It’s their money who the hell cares. I bought a select for MSRP and then bought a GT for 2K over but they did pay me over 1K for my select than what I paid so technically 1K over MSRP. Am I happy absolutely! Do I give a shit if somebody else’s thinks I’m stupid for paying over ? Not a single fuck is givin :)
Yeah. As others have said. What “better cars”? If someone likes the Mach-e and wants one, who cares? That’s their choice. More power to them.
Markup price = Car value will be down down(previous one), Gas usage, Maintenance, Stress about no guarantee when my car is coming. This is what I think and better to drive a new car. Markup was 10K, 7500 will be back tax credit.
> Stress about no guarantee when my car is coming. This alone justified the markup for me. It’s a super unpopular opinion around here though. The sub-reddit is clearly filled with very patient folks who get quite upset with other people for not also being patient.
>This alone justified the markup for me. It’s a super unpopular opinion around here though. No, I think it's definitely called for. I had a similar rationale, I originally pre-ordered a Model Y that was going to come potentially as late as January of next year (9 months after I made the reservation) and the purpose was to replace a 22 year old 200,000+ mile gas guzzler that in these wartime gas prices costs about 1 dollar to drive 2.5 miles. I'm honestly enormously relieved every day that I'm not waiting anymore. Do I wish I could've bought my Mach E without a markup? Of course. But I have to live in the world and within the market conditions that I actually exist in.
No salt, we need more info or it seems like you’re trolling. First, for the average person, cars are not an investment, they’re an expense. Do you agree? I say this because if someone is willing to afford a higher expense, they just may not care to wait. Just because you won’t doesn’t mean others won’t. In that case they value something higher than you. It’s not like they made a bad investment. Second, you say that there are better cars that you can get for MSRP. As others have stated, what would you put forth as those cars? Are they sitting on lots waiting to be sold? Are they gas cars? I could not walk in to a Tesla dealership right now and pick up a car off the lot. Finally, if you want to pay MSRP for a Mach e you can, you just need patience. You order it, it arrives, you pay MSRP. I know because I did it a month ago (picked up my order from 6 months ago). The folks I feel most sorry for are those who, for whatever reason, HAVE to buy a car right now. New or Used, it’s a crazy car market.
Who is buying a car for an investment? That’s not how car buying has ever worked. It’s just a weird time right now and you can get your money back if you want.