Car dealers reveal the new normal for buyers, from zero haggling and non-refundable deposits to sight-unseen purchases

A man looks at his phone on the hood of an SUV at a car dealership
A confluence of factors has upended the market for used and new cars in the past year, drastically changing how Americans buy cars.

  • The pandemic has thrown the market for new and used cars totally out of whack.
  • Cars are flying off of lots as quickly as manufacturers can produce them, and prices are sky-high.
  • The buying frenzy has people pouncing on cars they never would have considered before.
  • See more stories on Insider’s business page.

Cameron Johnson, a fourth-generation car dealer with nine franchises in Virginia, was taught growing up that every morning when a dealer wakes up, their used inventory is worth less than it was the night before.

But in today’s absurd car market, that wisdom isn’t holding up.

A buying frenzy coupled with an historic shortage of vehicles on lots has sent used-car values soaring nearly 30% since last June, according to Edmunds’ automotive research. Over the last six months, Johnson’s Magic City Auto Group has raised prices consistently, and the buyers just keep rolling in.

“I’ve definitely never seen this,” he told Insider. “And I think if you had a group of the smartest people in a room a year ago, no one would have predicted this.”

A massive shortage of computer chips has devastated car manufacturing for months, choking off the supply of new vehicles to dealers. High markups and scant options from assembly lines are fueling a boom in secondhand sales, chipping away at used inventories and driving prices skyward.

Rental-car companies that pared down their fleets when travel ground to a halt in 2020 have resorted to hoarding used vehicles. Meanwhile, low interest rates, a strong economic recovery, and fluctuating travel habits have kept consumer demand high.

It’s completely upended the way car dealers do business.

Lee Walls, a salesman at Grainger Honda in Savannah, Georgia, told Insider his dealership would typically have between 300 and 400 new cars either on the lot or on their way there. Now, he’s down to about 60.

These days, most new Hondas destined for Grainger’s showroom are sold before they even hit the lot – and they’re selling at or near MSRP. The dealership has changed its policy to make deposits non-refundable since so many buyers are clamoring for new cars.

Read more: Here’s how EV startups like Rivian are tackling the chip shortage that’s wreaking havoc for major automakers

At Magic City Auto Group’s stores, too, cars are snatched up practically as quickly as manufacturers can ship them over. Margins are up and profits are solid, but the money is short-term, Johnson says.

“We’re selling them faster than we can get them, which in a normal world would sound like a great problem,” he said. But he’d readily give up the extraordinary margins for more volume, which keeps salespeople happier and creates more downstream revenue from service and trade-ins.

Everything is selling

With popular models so expensive and hard to come by, shoppers have been loosening their budgets and pouncing on vehicles they wouldn’t have considered before.

Arizona-based Lifted Trucks – which takes used SUVs and pickups, jacks them up anywhere from two to eight inches, puts new wheels and tires on, and sells them through four locations across the state – has broken a sales record nearly every month since May 2020.

Many of its recent customers weren’t seeking out a lifted pickup, they simply couldn’t find the model they were after anywhere else, Chad Staples, the company’s corporate director of training and recruiting, told Insider.

Pickups sold by Lifted Trucks in Arizona
Lifted Trucks has seen record sales and profits over the last year.

Moreover, vehicles that would’ve languished on Lifted Trucks’ lots in normal times – ones with oddball paint jobs like banana yellow, orange, bright neon green, or Tiffany blue – are selling like hotcakes, Staples said. Desperate buyers are coming from farther away than ever, with one recent customer driving his trade-in from Pennsylvania.

Amid the insanity, margins are up around 30%, Staples said.

Car owners cash in

Dealers aren’t the only ones benefiting from the insatiable appetite for used cars. Used-car owners are cashing in big on rising values.

The average price paid for a trade-in has shot up 75% year-over-year to around $21,200, according to Edmunds. Some car owners stand to make a killing, particularly if they have a vehicle they don’t need. Staples, for his part, said Lifted Trucks has bought back numerous customers’ vehicles for more than it initially sold them for.

Those with leased cars are making out like bandits, too. Peoples’ off-lease vehicles, in many cases, are worth significantly more now than the buyout price they set in their contract years earlier, meaning lessees can essentially flip their leases to another dealer for an instant profit. Johnson, of Magic City, said he helped a recent customer buy out a lease for $40,000, then took the car in on trade for $48,000.

Some people have been making monthly payments and putting miles on cars that aren’t even depreciating in value, Johnson said. “It’s bizarro world,” he said.

New-vehicle supply will only begin to improve toward the end of this year, according to forecaster LMC Automotive, so it could be quite a while before the market evens out. Johnson, for one, believes the pandemic may have changed car buying and selling permanently, as manufacturers realize they can ship out smaller numbers of vehicles with lower incentives.

“I don’t think you’re going to go back to seeing 900 cars on our lot anytime soon,” he said. “The days of coming onto a lot and seeing 50 different Explorers to choose from are far away, if ever.”

Are you a car dealer, owner, or private seller with a story to share about what it’s like to buy and sell cars right now? Contact this reporter at tlevin@insider.com

Read the original article on Business Insider

Auto dealers say today’s red-hot market is a ‘bizarro world’ unlike anything they’ve ever seen – with cars selling before they hit the lot and clunkers worth more than ever

Lincoln SUVs at a dealership.
Car dealers told Insider they’ve never seen a market like today’s.

  • The pandemic has thrown the market for new and used cars totally out of whack.
  • Cars are flying off of lots as quickly as manufacturers can produce them, and prices are sky-high.
  • The buying frenzy has people pouncing on cars they never would have considered before.
  • See more stories on Insider’s business page.

Cameron Johnson, a fourth-generation car dealer with nine franchises in Virginia, was taught growing up that every morning when a dealer wakes up, their used inventory is worth less than it was the night before.

But in today’s absurd car market, that wisdom isn’t holding up.

A buying frenzy coupled with an historic shortage of vehicles on lots has sent used-car values soaring nearly 30% since last June, according to Edmunds’ automotive research. Over the last six months, Johnson’s Magic City Auto Group has raised prices consistently, and the buyers just keep rolling in.

“I’ve definitely never seen this,” he told Insider. “And I think if you had a group of the smartest people in a room a year ago, no one would have predicted this.”

A massive shortage of computer chips has devastated car manufacturing for months, choking off the supply of new vehicles to dealers. High markups and scant options from assembly lines are fueling a boom in secondhand sales, chipping away at used inventories and driving prices skyward.

Rental-car companies that pared down their fleets when travel ground to a halt in 2020 have resorted to hoarding used vehicles. Meanwhile, low interest rates, a strong economic recovery, and fluctuating travel habits have kept consumer demand high.

It’s completely upended the way car dealers do business.

Lee Walls, a salesman at Grainger Honda in Savannah, Georgia, told Insider his dealership would typically have between 300 and 400 new cars either on the lot or on their way there. Now, he’s down to about 60.

These days, most new Hondas destined for Grainger’s showroom are sold before they even hit the lot – and they’re selling at or near MSRP. The dealership has changed its policy to make deposits non-refundable since so many buyers are clamoring for new cars.

Read more: Here’s how EV startups like Rivian are tackling the chip shortage that’s wreaking havoc for major automakers

At Magic City Auto Group’s stores, too, cars are snatched up practically as quickly as manufacturers can ship them over. Margins are up and profits are solid, but the money is short-term, Johnson says.

“We’re selling them faster than we can get them, which in a normal world would sound like a great problem,” he said. But he’d readily give up the extraordinary margins for more volume, which keeps salespeople happier and creates more downstream revenue from service and trade-ins.

Everything is selling

With popular models so expensive and hard to come by, shoppers have been loosening their budgets and pouncing on vehicles they wouldn’t have considered before.

Arizona-based Lifted Trucks – which takes used SUVs and pickups, jacks them up anywhere from two to eight inches, puts new wheels and tires on, and sells them through four locations across the state – has broken a sales record nearly every month since May 2020.

Many of its recent customers weren’t seeking out a lifted pickup, they simply couldn’t find the model they were after anywhere else, Chad Staples, the company’s corporate director of training and recruiting, told Insider.

Pickups sold by Lifted Trucks in Arizona
Lifted Trucks has seen record sales and profits over the last year.

Moreover, vehicles that would’ve languished on Lifted Trucks’ lots in normal times – ones with oddball paint jobs like banana yellow, orange, bright neon green, or Tiffany blue – are selling like hotcakes, Staples said. Desperate buyers are coming from farther away than ever, with one recent customer driving his trade-in from Pennsylvania.

Amid the insanity, margins are up around 30%, Staples said.

Car owners cash in

Dealers aren’t the only ones benefiting from the insatiable appetite for used cars. Used-car owners are cashing in big on rising values.

The average price paid for a trade-in has shot up 75% year-over-year to around $21,200, according to Edmunds. Some car owners stand to make a killing, particularly if they have a vehicle they don’t need. Staples, for his part, said Lifted Trucks has bought back numerous customers’ vehicles for more than it initially sold them for.

Those with leased cars are making out like bandits, too. Peoples’ off-lease vehicles, in many cases, are worth significantly more now than the buyout price they set in their contract years earlier, meaning lessees can essentially flip their leases to another dealer for an instant profit. Johnson, of Magic City, said he helped a recent customer buy out a lease for $40,000, then took the car in on trade for $48,000.

Some people have been making monthly payments and putting miles on cars that aren’t even depreciating in value, Johnson said. “It’s bizarro world,” he said.

New-vehicle supply will only begin to improve toward the end of this year, according to forecaster LMC Automotive, so it could be quite a while before the market evens out. Johnson, for one, believes the pandemic may have changed car buying and selling permanently, as manufacturers realize they can ship out smaller numbers of vehicles with lower incentives.

“I don’t think you’re going to go back to seeing 900 cars on our lot anytime soon,” he said. “The days of coming onto a lot and seeing 50 different Explorers to choose from are far away, if ever.”

Are you a car dealer, owner, or private seller with a story to share about what it’s like to buy and sell cars right now? Contact this reporter at tlevin@insider.com

Read the original article on Business Insider

Tesla shrugs off the global chip shortage to post its most profitable quarter yet

Tesla CEO Elon Musk in a black suit walks on stage in front of an image of a Model Y vehicle
Tesla reported its earnings for the second quarter of 2021 on Monday afternoon.

  • Tesla reported its earnings for the second quarter of 2021 on Monday afternoon.
  • The electric-car maker crushed Wall Street’s expectations for revenue and profit.
  • The company largely escaped the worst effects of a global semiconductor shortage straining the industry.
  • See more stories on Insider’s business page.

Tesla on Monday posted its most profitable quarter yet, beating Wall Street’s expectations even as a microchip shortage and other supply-chain troubles complicate car production.

Here are the important numbers:

  • Revenue: $11.958 billion, compared to an expected $11.36 billion
  • Earnings: $1.45 (adjusted) per share, compared to an expected $0.974 per share.

Elon Musk’s automaker reported $1.14 billion in (GAAP) net income, more than double the $438 million it made during the first quarter of 2021.

For the first time, Tesla’s quarterly profits exceeded $1 billion. It’s also the first quarter that Tesla turned a profit even without counting sales of zero-emission credits to other automakers, a revenue source it has historically relied on to stay in the black and which tallied $354 million for the quarter.

Tesla said it was able to grow its operating income mainly by increasing volume and reducing costs. That growth was offset by factors including a $23 million depreciation of its bitcoin holdings.

The company has posted strong sales figures in 2021 even as a global chip shortage hobbles vehicle production worldwide and forces automakers to idle production lines.

“Supply chain challenges, in particular global semiconductor shortages and port congestion, continued to be present in Q2,” the company said. “The Tesla team, including supply chain, software development and our factories, worked extremely hard to keep production running as close to full capacity as possible.”

However, Tesla said it has shifted production of its electric semi-truck to 2022 due to “global supply chain challenges” and to focus on ramping up production at upcoming factories in Berlin and Austin. The company said it expects to start production at both plants in 2021. The Berlin facility was supposed to open July 1, but bureaucratic hurdles and environmental concerns have delayed those plans indefinitely.

The electric automaker delivered 201,250 cars during the second quarter, smashing the 184,800-vehicle record it set during the previous three months. That put Tesla on the path toward selling more than 800,000 vehicles in 2021, a significant increase over the 500,000 it sold in 2020.

Shares moved higher by about 1.5% in late trading Monday following the release.

Read the original article on Business Insider

The 10 longest range electric cars you can buy in the US

Tesla Model Y crossover
Tesla reigns supreme when it comes to range.

  • Range anxiety is one of the biggest hurdles facing widespread adoption of electric vehicles.
  • Many EVs on the US market can go well over 200 miles on a charge.
  • But Tesla is still the brand to beat when it comes to range.
  • See more stories on Insider’s business page.

Range anxiety is almost always cited as one of the biggest hurdles to widespread adoption of electric vehicles.

Today, most people would rather own a car that they can drive vast distances and fill up with dinosaur goo in a matter of minutes over a battery-powered vehicle with limited range and a slower charge.

But the fear of running low on electrons without a plug nearby may soon be a thing of the past.

Battery technology is improving quickly, and there are several electric cars on the US market that can travel well over 200 miles between charges – plenty for most short or medium-length trips. The best of the best can go more than 300.

Here are the 10 longest-range EVs you can buy in the US today.

10. Kia Niro EV – 239 miles

2020 Kia Niro EV.
2020 Kia Niro EV.

Starting at $39,000, Kia’s electric crossover offers solid range for less than the price of the average new car in the US. Plus, when you factor in the $7,500 federal EV tax credit, the Niro becomes even more of a bargain. There’s also a fancier trim on offer for around $45,000.

9. Chevrolet Bolt EUV – 247 miles

EMBARGO 2/14/2022 4PM ET 2022 Chevrolet BoltEUV 010
2022 Chevrolet Bolt EUV.

For 2022, Chevrolet launched a compact crossover version of the Bolt EV – the Bolt EUV, standing for “electric utility vehicle.” The $33,995 EUV is a bit bigger and rides a bit taller than its cousin, giving it a slightly shorter range.

8. Hyundai Kona Electric – 258 miles

Hyundai Kona Electric
Hyundai Kona Electric.

The 2021 Kona Electric retails for $37,390 and puts out 201 horsepower. It’s built on the same platform as the Kia Niro. An Ultimate trim is available for around $46,000.

Read more: The 5 best companies to bet your career on in the booming electric vehicle industry

7. Chevrolet Bolt EV – 259 miles

EMBARGO 2/14/2022 4PM ET 2022 Chevrolet BoltEV 006
2022 Chevrolet Bolt EV.

Chevy gave the Bolt EV a radical redesign for the 2022 model year, keeping the hatchback’s egg shape but bestowing it with sharper looks all around. The new model has an identical range to its predecessor, but a reduced starting price of $31,995. That makes it one of the cheapest EVs you can buy.

6. Volkswagen ID.4 Pro – 260 miles

Volkswagen ID.4
Volkswagen ID.4.

Volkswagen is trying hard to catch up to Tesla, far and away the dominant force in EVs. And although its rebrand to “Voltswagen” turned out to be a badly timed April Fools’ Day joke, the company is making strides toward that goal. The ID.4, its first US-market EV, launched in early 2020 for $40,000.

5. Ford Mustang Mach-E – 305 miles

Mustang Mach E GT Performance Edition 03
Mustang Mach-E GT Performance Edition.

The Mustang Mach-E came on the scene in late 2020 as Ford’s first EV. Its California Route 1 trim has the most range, while the base Select model delivers 230 miles. Other ranges are available depending on whether customers choose a larger battery or all-wheel drive.

The Mach-E California Route 1 will run you $50,400 to start.

4. Tesla Model Y Long Range – 326 miles

Tesla Model Y.
Tesla Model Y.

The Model Y ranks at the bottom of Tesla’s lineup in terms of range, but it still beats out every other EV on the market. The Long Range model will run you $53,990. As with other Teslas, a pricier high-performance model is available with less range.

3. Tesla Model 3 Long Range – 353 miles

Tesla Model 3_4
Tesla Model 3.

The Long Range Tesla Model 3 delivers more than 350 miles of range for $50,000. The base model, by comparison, delivers 263 miles of range for $10,000 less.

2. Tesla Model X Long Range – 360 miles

2021 Tesla Model X crossover
Tesla Model X.

The $95,000 Model X crossover is Tesla’s second-oldest model behind the Model S. The burly family SUV not only has one of the most impressive ranges in the industry, it also claims to hit 60 mph in 3.8 seconds.

1. Tesla Model S Long Range – 405 miles

Tesla Model S
Tesla Model S.

Tesla’s flagship Model S has been the EV to beat for years. The sleek sedan leads the industry in range, and its most souped-up variant – the Model S Plaid – launched last month as the quickest production car in existence.

A handful of future EVs – notably the Lucid Air sedan – promise to go further than the Model S, but for now, Tesla remains the clear choice if range is your top concern.

Read the original article on Business Insider

2 of Tesla’s most promising rivals keep getting delayed

Lucid Air exterior_8
Lucid’s Air sedan is set to hit streets this year.

  • Lots of startups are aiming to take on Tesla in the ever-growing electric-vehicle space.
  • Rivian and Lucid Motors are two of the most promising contenders.
  • Both have delayed their debut vehicles due to the pandemic but plan to start deliveries in 2021.
  • See more stories on Insider’s business page.

Tesla has reigned supreme as the lord of electric vehicles for years, even as established manufacturers and scrappy startups attempt to come for its crown.

Two of the most promising upstart EV makers – Rivian and Lucid Motors – were on the brink of launching their first vehicles onto the US market this year. But the pandemic had other plans.

Rivian earlier this month told customers who had reserved Launch-Edition models of its adventure-focused SUV and pickup that they’d have to wait a few extra months to take delivery. The R1T truck’s launch was postponed from July to September, while the R1S SUV will now arrive later in the fall, Rivian CEO RJ Scaringe told customers in an email.

“The cascading impacts of the pandemic have had a compounding effect greater than anyone anticipated. Everything from facility construction to equipment installation, to vehicle component supply (especially semiconductors) has been impacted by the pandemic,” he said.

Rivian R1S
The Rivian R1S was delayed to the fall.

Rivian first pushed R1T deliveries by a month in May due to hurdles like shipping delays and the ongoing microchip shortage, a spokesperson said.

Read more: Rivian-rival Lucid’s CEO thinks the EV industry is due for a brutal shakeout because startups are missing one key ingredient

Similarly, Lucid in February delayed the launch of its debut luxury sedan – the Air – to the second half of 2021. Customers were supposed to receive their cars in the spring. In a letter, Lucid CEO Peter Rawlinson chalked up the delay to the pandemic’s impact on the startup’s testing activities, supply chain, and its preparations for sales and service.

That was the second time Lucid shifted its plans due to the pandemic; the startup first planned to start producing the Air in late 2020.

With a claimed range of more than 500 miles and a starting price of around $77,000, the Air is set to give the Tesla Model S a run for its money when it hits streets – on paper, at least. Tesla has led the industry in range for ages with its 400-plus-mile Model S.

Rivian R1T
Rivian says customers will start receiving their R1T pickups in September.

Lucid and Rivian represent two of the EV startups furthest along in their development. Both have operational factories, showrooms, and heaps of binding preorders, which can’t be said of most new companies trying to replicate Tesla’s success. Rivian has amassed several billion in funding from investors like Amazon and Ford. Lucid is preparing to go public through a reverse merger in a deal that will give it $4.5 billion in fresh funding.

Although Lucid is on track to start shipping cars this year, the pandemic has made the final stretch more difficult, Rawlinson told Insider. Lucid has run up against quality issues with some of its suppliers – problems that, under normal circumstances, would’ve been addressed long ago with trips to suppliers. The pandemic ruled that out.

But Rawlinson wants to get every detail spot on, and that’s why he pushed the Air’s launch.

“This is a one-shot deal to get it right. Why don’t we go really conservative?” he told Insider.

Read the original article on Business Insider

Tesla wants owners to pay $1,500 for hardware they thought they already had

A white Tesla Model S is pictured at a Tesla facility in Littleton, Colorado.
One long-time Tesla owner felt like the company is “screwing over its earliest supporters.”

  • Tesla launched a subscription option for its Full Self-Driving driver-assistance feature.
  • Tesla said in 2016 that all cars moving forward would have the hardware for Full Self-Driving.
  • But some owners are being asked to pay $1,500 to upgrade their cars’ computers.
  • See more stories on Insider’s business page.

Tesla launched a long-awaited subscription option for its Full Self-Driving feature this month, slashing the system’s cost from a hefty $10,000 one-time payment to $199 per month.

The subscription, which Elon Musk had been promising for months, is huge for some Tesla owners as it allows them to test out Full Self-Driving without blowing the college fund. Moreover, buyers can cancel at any time if they don’t think the feature – which automates some driving tasks but doesn’t make cars autonomous – is worth the cost.

But there’s an expensive catch that’s peeving some long-time Tesla owners.

People who bought their Tesla before the middle of 2019 need to fork over $1,500 to upgrade their vehicle’s computer if they want to subscribe. That directly contradicts the automaker’s 2016 announcement that all vehicles built from that point on would come equipped with the hardware to run Full Self-Driving.

“It feels like Tesla is screwing over its earliest supporters,” Arjun, who bought a Model 3 when it launched in 2018 and described himself as a “long-time Tesla supporter, stockholder, and fan,” told Insider. “We are not asking for a quick buck or a discount, we are just asking for the hardware we were told came preinstalled on our vehicles.”

Arjun, who asked that Insider not use his full name, said it was a “huge selling point” that his Model 3 came with Full Self-Driving hardware, given that he intended to purchase the software at some point down the line. He called Tesla’s move a “blatant bait and switch.”

Read more: Read the $1 million-penalty contract Elon Musk’s tunnel company used to keep its tech secret

Other Tesla owners in similar situations aired their grievances on social media.

“Would be nice to get a cheaper installation or something, considering we were helping them when dying was a real possibility for Tesla. However, I expect nothing,” one Reddit user said.

“I have a 2018 M3 and I’m furious,” another person said, referring to the Model 3 sedan. “I’d love to see some legal action taken.”

Some also lamented that in order to subscribe they have to buy Autopilot, a the company’s driver-assistance system that used to cost $3,000 but became standard on all Teslas in 2019.

Tesla didn’t return a request for comment.

When Tesla launched its latest-generation Full Self-Driving computer in 2019, it began offering free upgrades to owners who had paid full fare for the feature. But those who held out for the subscription are on their own.

Tesla has a shaky history of not delivering on its automated-driving tech. Musk has been saying since at least 2016 that full autonomy is right around the corner. He promised that by 2020, owners would be able to generate passive income by turning their cars into robotaxis.

But Full Self-Driving is still far from living up to its branding. The most advanced beta version of the software – currently in the hands of a couple thousand Tesla owners – requires full driver attention and still has major flaws.

Arjun says Tesla should cover the hardware upgrade costs for vehicles that Tesla claimed had the right computers to begin with.

“I love my Model 3 and continue to believe in the tech behind Tesla, but they’re no longer a start up and they have to behave like a company who stands behind their word,” he said. “I believe Tesla should waive the fee/absorb the cost, and then I’d be happy to try out the service. Until then, I’ll stay on my obsolete hardware.”

Read the original article on Business Insider

You can now buy Audi’s $100,000 electric super sedan – check out the E-Tron GT

Audi E-Tron GT electric sedan.
The Audi E-Tron GT takes direct aim at Tesla’s sportiest Model S.

  • Audi has launched the E-Tron GT, its $100,000 flagship electric sedan.
  • Its sportiest version, the $140,000 RS, claims 590 horsepower and a 0-60-mph time of 3.1 seconds.
  • The E-Tron GT is now available to configure on Audi’s website.
  • Visit the Business section of Insider for more stories.

Audi has launched the E-Tron GT, a high-end sport sedan that’s a sibling to the Porsche Taycan and takes aim at the Tesla Model S.

The E-Tron GT, revealed through in February, hit the market on Tuesday, Audi said. It starts at just shy of $100,000 for the base model, with another trim level retailing for around $107,000.

The top-of-the-line, high-performance RS model will cost $139,900, $10,000 more than Tesla’s sportiest sedan, the Model S Plaid. The RS E-Tron GT, we found out in May, is an absolute hoot to drive.

Audi E-Tron GT electric sport sedan.
2022 Audi E-Tron GT.

Although the E-Tron GT doesn’t promise quite the same extreme performance as the Plaid, it’s certainly not lacking on that front. It shares its underpinnings with the Porsche Taycan, as both brands fall under the Volkswagen umbrella.

Powered by two motors – one at each axle – the standard model puts out a combined 469 horsepower and 464 lb-ft of torque, by Audi’s estimation. The company says it can hit 60 mph in 3.9 seconds, on its way to a top speed of 152 mph.

The RS version steps things up a notch with a more powerful rear motor that boosts total output to 590 horsepower and 612 lb-ft of torque. The RS goes from 0-60 in 3.1 seconds and has a top speed of 155 mph, Audi claims. The RS accelerates quicker than the V10-powered Audi R8 sports car, the company notes.

Audi E-Tron GT electric sport sedan.
2022 Audi E-Tron GT.

As for range, Audi says the E-Tron GT can travel 238 miles on a charge, while the RS model can go 232 miles. Using DC fast charging, the car can add 62.1 miles of range in five minutes or recharge from 5% to 80% battery in a little over 22 minutes, according to Audi. Tesla, for comparison, doesn’t sell a Model S with less than 390 miles of estimated range.

Read more: A wave of consolidation is coming for the electric-vehicle startup game in 2021, an industry insider says

The E-Tron GT gets a leather-free interior as standard, featuring recycled and synthetic materials instead – although buyers can add leather as an option. It comes equipped with a 12.3-inch display for the instrument cluster and a 10.1-inch main touchscreen, a bit more restrained than Tesla’s 17-inch center screen.

Audi E-Tron GT electric sport sedan interior.
2022 Audi E-Tron GT.

Notable options include four-wheel steering, upgraded headlights, a head-up display, massaging seats, adaptive air suspension, and a carbon-fiber roof for the RS model.

Audi plans to have 30% of its US lineup be either fully electric or hybrid by 2025. The brand has made headway on that front by launching the E-Tron and E-Tron Sportback crossovers – and in April it revealed its cheapest EV yet, the sub-$45,000 Q4 E-Tron.

Read the original article on Business Insider

From swerving into a median to narrowly missing poles, videos of Tesla’s latest Full Self-Driving update don’t inspire much confidence

The interior of a Tesla driving down the highway
Tesla interior

  • Tesla launched the latest version of its Full Self-Driving beta after a long delay this month.
  • Beta testers immediately started posting clips of the driver-assistance system.
  • The software is impressive and advanced, but still gets drivers into dangerous situations.
  • See more stories on Insider’s business page.

Earlier this month, Tesla rolled out a long-awaited update to its Full Self-Driving software for beta testers. It’s impressive – but it still doesn’t make cars autonomous.

The electric-vehicle maker first beamed out access to the pre-production tech in October, and it’s now in the hands of a couple thousand loyal Tesla owners. It takes Tesla’s existing driver-assistance system, which is mainly suited for predictable highway driving, and adds the ability to automate driving tasks on more complicated non-highway streets.

Videos of the new-and-improved software in action show that it can impressively navigate some tough driving situations, but there are plenty of dangerous flaws and glitches too.

In one clip, a Tesla confidently handles a tight, unmarked road with an oncoming car. The computer does pretty much exactly what a human would do: slow down and pull over to let the oncoming car go first, then pull forward once it’s clear that the other driver is giving right of way.

Another shows the system navigating stop-and-go traffic:

Another shows that it can see stop signs and make turns on dark – albeit empty – city streets, too. Some videos also show cars stopping for pedestrians and other vehicles.

Read more: Fort Lauderdale asked Elon Musk to build a commuter train tunnel. So how did it end up considering a $30 million beach tunnel for Teslas instead?

But the system still struggles with utterly basic driving tasks, putting drivers and bystanders in dicey situations. In one clip documenting a drive in downtown San Francisco, the car drunkenly swerves into a striped median, forcing the driver to take control.

In the same video, the car stumbles through a left turn and nearly oversteers into a parked car.

In a clip set in Chicago, the car slowly creeps through intersections, comes to random stops, and only notices a road closure at the last second. A bunch of orange barricades is something any average human driver would recognize before actually attempting a turn.

All of these dangerous hiccups show just how far Tesla is from replicating human driving. But one particularly alarming clip out of Seattle takes the cake.

In the nighttime video, the beta fails to recognize the massive concrete columns supporting the city’s monorail – and the car nearly steers into them twice in an attempt to change lanes.

If a highly automated car should be able to do one thing, it’s recognizing large stationary objects and avoid them. But it appears that the car had no idea the pillars were even there, judging by the visualization displayed on the center screen.

The people in the car wonder whether the failure is a result of Tesla shifting to a camera-only system that doesn’t use radar. And that’s certainly a possibility. Car companies, Tesla included, have relied on radar for years for features like emergency braking and cruise control. But Tesla in May decided to stop using the sensors and take them out of its future cars.

Tesla has adopted a fast-and-loose approach to its automated-driving tech that other automakers aren’t taking. And safety advocates have taken issue with Tesla’s strategy of having amateur drivers test unproven technology on public roads. Pedestrians, cyclists, and other drivers didn’t sign up to be subjects in this lab experiment, they argue.

But the company is under mounting pressure to deliver a final version of Full Self-Driving to customers, who have shelled out up to $10,000 over the years for the add-on under the promise that it would eventually enable Teslas to drive themselves. It’s increasingly looking like that’s not happening anytime soon.

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How a perfect storm of shortages and rental car chaos sent used-car prices skyrocketing

Cars sit outside a used car dealership with spray paint on the windows advertising the vehicles.
Used car and truck dealers have bought models for more than their original sticker price.

  • Used-car prices have skyrocketed over the last year.
  • A supply crunch in new cars is spurring demand for used models.
  • Prices may not return to normal for at least a year, one expert told Insider.
  • See more stories on Insider’s business page.

If you’re looking to get a sweet deal on a used car to take advantage of the warm summer weather, it’s not going to happen.

The market for secondhand cars is absurdly and unprecedentedly hot right now. Used vehicles went for a whopping 40% more in June than they did before the pandemic in February of 2020, according to data from JPMorgan.

The average nine-year-old car changed hands for $13,250 in June, according to automotive research site Edmunds. That’s a 30% hike over the same month in 2020, while a five-year-old vehicle will run you a staggering $24,000 – up more than $6,000 from a year ago.

The insanity all comes down to simple economics: demand for used cars far outweighs their supply, pushing prices higher and higher. But the reasons for scant inventories and such high interest in used cars get a bit more complicated.

Why are used cars so expensive right now?

The market for used cars is deeply intertwined with the market for new ones, says Kayla Reynolds, an analyst at Cox Automotive. The latter is going through a rough patch, and those troubles are trickling down into the used market.

A devastating shortage of microchips – which are necessary for all manner of critical electrical components – is slowing car production worldwide, choking the supply of new models and driving their prices skyward. High dealer markups and a lack of options are forcing more buyers to shop secondhand, chipping away at used-car inventories, Reynolds said.

To put the magnitude of this shortage into perspective, new-car inventory in the US was down 54% in June as compared to the same month in 2019, according to Cox. Dealer incentives have plummeted and transaction prices for new cars have hit all-time highs as a result.

That’s bringing a whole new set of customers to the used market, people who were prepared to spend serious money on a brand-new set of wheels and are, in turn, driving up used-car prices, says Ivan Drury, senior manager of insights at Edmunds.

Read more: Meet 9 former Tesla execs who left Elon Musk to become power players at rivals like Apple and Rivian

A drop in new cars rolling off assembly lines has upended the flow of vehicles to and from rental agencies, which are typically a major source of used inventory. Rental companies, which sold off cars en masse during the pandemic, usually buy some 2 million new cars every year and turn them over every 1-2 years, Drury said.

With travel surging back, they’ve resorted to snatching up used cars – and they’re not giving them up.

Moreover, with new-car prices through the roof, people are holding onto their aging vehicles longer instead of trading them in, cutting off the flow of cars onto the used market. For the same reason, they’re opting to buy their leased vehicles at the end of the term, rather than swap them in for a new lease.

When will the madness end?

There is good news. Prices seem to have peaked in May and are heading back to Earth.

Between May and June, wholesale car prices declined for the first time since December, suggesting that demand and supply are on a path toward some kind of equilibrium, Cox’s Reynolds said.

She expects that retail prices will soon follow, and that shoppers will start to notice prices on car lots gradually dropping by the fall. The pandemic-induced car-buying frenzy tapering off partially explains the shift, she said.

But the supply crunch brought on by the chip shortage isn’t going away anytime soon, meaning it could be quite a while before shoppers see used-car prices they’re accustomed to. Even once new models are back in stock, the secondhand market won’t snap back to normal overnight, Drury said.

His advice to car buyers: “I’d say give it at least six months. And in all honesty, if you can hold off for an entire year, you’re better off with that.”

Are you a car dealer, buyer, or private seller with a story to share about what it’s like to buy and sell cars in this red-hot market? Contact this reporter at tlevin@insider.com

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A supply crunch has sent used car prices sky high. These 16 models are now worth more used than new

2020 Kia Telluride.
A new Kia Telluride costs close to $4,000 less than a used one – if you can find one.

  • Car dealers are facing a supply crunch that’s caused used car prices to go through the roof.
  • Some 2019 and 2020 cars are cheaper to buy new right now, according to a study from iSeeCars.
  • The Kia Telluride now costs $3,564 more to buy used than new.
  • See more stories on Insider’s business page.

Skipping a brand-new car for one that’s lightly used has always been the most wallet-friendly way of going about things. Not anymore.

In the strange and sometimes utterly backward-seeming times we’re living in, it’s actually cheaper to buy some cars new rather than second hand. A recent study from automotive research site iSeeCars.com identified 16 such vehicles, some of which cost thousands more to buy used.

The pandemic has led to a diminished supply of cars and an outsize demand for them, the result being that used vehicle prices are through the roof. Amid financial uncertainty, people have been hanging onto their cars longer, choking one of the key pipelines of used cars to dealers. Meanwhile, an ongoing shortage of microchips has hampered car production globally and slashed the supply of new models.

The result, according to iSeeCars.com’s analysis of some 470,000 2019- and 2020-model-year cars listed for sale in June, is that the gap between used- and new-car prices have shrunk considerably in recent months. In early November, the average lightly used car cost nearly 11% less than its new counterpart. In June, that gap closed to just over 3%.

Some especially popular models – ones that are hard to find new right now – cost thousands more than their MSRP on the second-hand market. See the list of 16 vehicles below:

1. Kia Telluride

2020 Kia Telluride_13
2020 Kia Telluride.

  • Average price new: $44,166
  • Average price used: $47,730
  • Difference: 8.1%; $3,564

2. GMC Sierra 1500

2020 GMC Sierra Denali
GMC Sierra Denali.

  • Average price new: $54,205
  • Average price used: $57,671
  • Difference: 6.4%; $3,466

3. Toyota Tacoma

Toyota Tacoma
The Toyota Tacoma.

  • Average price new: $37,902
  • Average price used: $39,857
  • Difference: 5.2%; $1,955

4. Mercedes-Benz G-Class

mercedes-benz g wagen g550
The Mercedes-Benz G550.

  • Average price new: $182,631
  • Average price used: $190,078
  • Difference: 4.1%; $7,447

5. Toyota Rav4 Hybrid

Toyota RAV4 hybrid
Toyota Rav4 Hybrid.

  • Average price new: $34,995
  • Average price used: $36,352
  • Difference: 3.9%; $1,357

6. Toyota Tundra

 2020 Toyota Tundra
2020 Toyota Tundra.

  • Average price new: $49,643
  • Average price used: $51,474
  • Difference: 3.7%; $1,831

7. Dodge Challenger

2020 Dodge Challenger sports car
2020 Dodge Challenger R/T Scat Pack.

  • Average price new: $39,375
  • Average price used: $40,764
  • Difference: 3.5%; $1,388

8. Toyota 4Runner

2019 Toyota 4Runner
Toyota 4Runner.

  • Average price new: $45,382
  • Average price used: $46,867
  • Difference: 3.3%; $1,485

9. Hyundai Palisade

2020 Hyundai Palisade.
2020 Hyundai Palisade.

  • Average price new: $44,063
  • Average price used: $45,356
  • Difference: 2.9%; $1,293

10. Tesla Model 3

tesla model 3
Tesla Model 3.

  • Average price new: $44,409
  • Average price used: $45,677
  • Difference: 2.9%; $1,268

11. Honda Civic

2019 Honda Civic Sedan Touring
2019 Honda Civic Sedan Touring.

  • Average price new: $26,331
  • Average price used: $27,058
  • Difference: 2.8%; $727

12. Dodge Charger

Dodge Charger
Dodge Charger.

  • Average price new: $38,977
  • Average price used: $39,874
  • Difference: 2.3%; $897

13. Honda Odyssey

2019 Honda Odyssey
Honda Odyssey.

  • Average price new: $37,612
  • Average price used: $38,048
  • Difference: 1.2%; $435

14. Kia Rio

2020 Kia Rio subcompact sedan.
2020 Kia Rio.

  • Average price new: $17,346
  • Average price used: $17,472
  • Difference: 0.7%; $127

15. Subaru Crosstrek

2020 Subaru Crosstrek Premium
2020 Subaru Crosstrek Premium.

  • Average price new: $29,474
  • Average price used: $29,642
  • Difference: 0.6%; $168

16. Subaru WRX

Subaru WRX
Subaru WRX.

  • Average price new: $34,487
  • Average price used: $34,568
  • Difference: 0.2%; $81
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