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The $25k car is going extinct?

(media.hubspot.com)
319 points pseudolus | 1 comments | | HN request time: 0.332s | source
1. builtsimple ◴[] No.44429353[source]
The dealer inventory model is the real killer here. The article mentions that only ~20% of US buyers pre-order cars, compared to Europe where build-to-order is common. This fundamentally changes the economics. When I worked at a dealership software company, we saw the data firsthand - dealers would rather sit on one $80k truck for 60 days than move five $25k sedans in the same timeframe. The financing alone makes it worthwhile. A buyer financing an $80k vehicle at 7% over 72 months generates ~$20k in finance reserve profits that get split between the dealer and lender. The $25k car? Maybe $3-4k if you're lucky. The Maverick situation is particularly telling. Ford designed an actually affordable truck, and dealers immediately marked it up 25% because they could. That's not a supply chain issue - that's dealers extracting maximum value from artificial scarcity. What's interesting is that direct-to-consumer models (Tesla, Rivian, etc.) haven't really attacked this market segment either. You'd think cutting out the dealer would make sub-$25k vehicles viable again, but even they're chasing higher margins upmarket. The only real solution I see is Chinese EVs eventually forcing the issue. BYD is selling the Seagull for ~$11k in China. Even with tariffs, that could land here under $25k and completely reset consumer expectations. Until then, we're stuck with dealers optimizing for finance profits over volume.