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Anyone Buying Big Ticket Items Because They're Concerned About Tariffs?
True confession. Just purchased a new Honda Accord Hybrid. Joked to the salesman that I thought I’d buy it “before Trump puts a 20 or 30% tariff on Japanese imports.” (However, I learned later it was actually assembled in Ohio and contains more than 50% U.S. and Canadian parts.)
Nice car. Rated 47 mpg. Actually getting near 49 in mixed highway & city driving. Future inflation was another consideration. Kind of like buying a “hedge” against unexpected fuel price increases.
Been thinking about a 60" + inch TV. I think it's possible those screens will be 30-50% higher in a month or two. Been thinking Samsung... hey, I thought S. Korea was our friend!!! Ok, now it's N. Korea. Got it.
Today many electronic components in computers, TV, dishwashers, laundry washers and many more, are made in China. Used to be Taiwan, Malaysia and Indonesia.
Thr tariffs will only drive up the cost of consumer products and thereby the inflation will shoot past the Fed target by year end. Think it is time to pick up TIPs and TIP funds? See how fiscal policy and investment are all intertwined.
@Sven- Already our Dear Leader is shaking his fist at the fellow who he just appointed to run the Fed, for raising interest rates. Lets see now: Dear Leader causes inflation with tariffs, then blames Fed for trying to keep inflation in check. The man is a simplistic moron.
Also he called EU and China for manipulating their currencies and this directly affect every investor's mutual funds. So it is unrealistic to separate fiscal policy from investment. I read every annual reports and (good) fund managers talk about the every same thing we are discussing here, perhaps in milder terms. Andrew Foster of Seafarer funds is a great example. Carl Koufman of Osterweis Strategic Income is the other.
@hank. We have the same car, last year's model. Honda sedan sales have been reported disappointing despite the very high ratings of their cars. Americans prefer pick-ups and SUVs, but tariffs can't possibly spur sales.
I can't time purchases of big-ticket items any more than I can time the market. To wit: during the hottest weather of the year our second-floor AC failed. Due to the ages of the unit and the furnace, we are now the proud owners of a spanking new system that can be controlled from my phone. Recent WSVIX sale proceeds found a new home before any interest could accrue on them. Some timing.
One really can't time BT purchases too well. Our eight year old desktop had been making noises for some time and recently failed to boot multiple times. A file system check found several bad blocks. It was about time anyway, so we'll have two desktops until the old one dies for good.
Ordered the replacement tonight. BofA rejected the charge (their fraud detection system is absurdly aggressive and obnoxious). Will charge again tomorrow.
(Dell's "Cyber July" promotion, through July 22, takes about $100 off machines between about $800 and $1300 list, with bigger cuts on some items - in case you're in the market.)
I bought a 2018 Honda Civic last month. I needed a new one, last one is 15 years old. It was either this year or next, but I got a good deal, I think. I was aware of the possible impending tariff, but it was just a small portion of the reason. I would have bought a new 2019 right away if a tariff was announced. Mine was made in Toronto I believe, and they've really changed in 15 years.
Youngstown, OH is the major US manufacturing site for Honda. Both of our Civic and Odyssey were made there. I believe Canadian Honda cars are made in Alliston, Ontario. It is crazy that the Accord was voted the best passenger car in 2018, but that did not help the sale. Everyone seem to want SUVs.
It does seem odd. I’ve always had a pickup as a second vehicle. I haul dirt and firewood, pull out old fence posts from the ground & use the tailgate as a workbench. Damn handy. But love a car for ease of driving, parking , ride, handling, covered trunk, fuel economy etc. Suspect consumer attitudes will change if fuel gets to $5-$6 in the next few years. Buying habits have always followed fuel prices up and down in the past.
Was getting the pickup worked on at an area dealership last week and went “exploring” in his showroom. The Chrysler portion had no cars in the showroom or on the lot - only trucks and SUVs. The GM part had one Impala (top of the line) and a couple Malibus. Loads of trucks. Asked them why SUVs were so hot. The salesman claimed it’s because the aging boomers need a higher seat to be able to get in and out easily. News to me! Maybe boomers need to get in better shape. -
* Added - Do folks even consider the cost of insurance when shopping for a new vehicle? You can buy a pretty decent new car for around $25,000 (give or take). Add $10,000 more for a spiffed-up SUV. A full-sized 4X4 truck often runs $60,000 or more. That’s a lot of metal to have to insure.
salesman claimed it’s because us boomers need a higher seat to be able getting in and out easily. News to me!
SUVs are actually harder to get in-and-out, and I am 6'4". Last time I rented a Chevy Tahoe SUVs for a day while my Odyssey was having a major tune-up. The interior space was 40% smaller than that of the minivan and poor gas milage (~10 miles per gallon while the Odyssey uses 25 miles per gallon). In Europe you won't find many SUVs with their high gas prices. The roads are narrow and few "free" parking in big cities. We are spoiled in the States.
I had a Saturn sedan in the mid-90s, then went to the Explorer, Acura MDX ('05 great model, kept it for 9 years), and then a BMW x3 SUV which I despised due to an unremovable dead pedal footrest on the left side that jammed my foot - I actually had pinky hammertoe surgery b/c of it. So I dumped the x3 and went for a 340GT (hatchback) ... not only does it get better MPG but it's got as much room as my old x3, better driver 'fit' for me foot-wise, and some insane open-road horsepower. Other than the '05 MDX (which I do miss for several reasons) this is the best vehicle I've owned so far.
Not sure why SUVs are cramped relative to minivans. My neighbor leased a Hummer and the center console took up much of the space in the middle. Certainly not a family-oriented vehicles. Sorry to hear BMW SUVs did not fit your need. I understand that their maintenance is pretty steep, ~2X of typical vehicles.
Comments
I bought big ticket work-related items last Dec to get in ahead of the tax law changes regarding unreimbursable biz expenses.
I don't have any BTIs that I need to get at the moment. *fingers crossed* Hopefully I won't either.
Nice car. Rated 47 mpg. Actually getting near 49 in mixed highway & city driving. Future inflation was another consideration. Kind of like buying a “hedge” against unexpected fuel price increases.
@MikeM,
https://www.quora.com/In-1984-why-does-the-enemy-and-ally-always-change-from-Eurasia-to-Eastasia-and-back-again-every-four-years
Thr tariffs will only drive up the cost of consumer products and thereby the inflation will shoot past the Fed target by year end. Think it is time to pick up TIPs and TIP funds? See how fiscal policy and investment are all intertwined.
Russia? Never! (That might be because they have nothing there to manipulate,)
I can't time purchases of big-ticket items any more than I can time the market. To wit: during the hottest weather of the year our second-floor AC failed. Due to the ages of the unit and the furnace, we are now the proud owners of a spanking new system that can be controlled from my phone. Recent WSVIX sale proceeds found a new home before any interest could accrue on them. Some timing.
One really can't time BT purchases too well. Our eight year old desktop had been making noises for some time and recently failed to boot multiple times. A file system check found several bad blocks. It was about time anyway, so we'll have two desktops until the old one dies for good.
Ordered the replacement tonight. BofA rejected the charge (their fraud detection system is absurdly aggressive and obnoxious). Will charge again tomorrow.
(Dell's "Cyber July" promotion, through July 22, takes about $100 off machines between about $800 and $1300 list, with bigger cuts on some items - in case you're in the market.)
Mine was made in Toronto I believe, and they've really changed in 15 years.
Was getting the pickup worked on at an area dealership last week and went “exploring” in his showroom. The Chrysler portion had no cars in the showroom or on the lot - only trucks and SUVs. The GM part had one Impala (top of the line) and a couple Malibus. Loads of trucks. Asked them why SUVs were so hot. The salesman claimed it’s because the aging boomers need a higher seat to be able to get in and out easily. News to me! Maybe boomers need to get in better shape.
-
* Added - Do folks even consider the cost of insurance when shopping for a new vehicle? You can buy a pretty decent new car for around $25,000 (give or take). Add $10,000 more for a spiffed-up SUV. A full-sized 4X4 truck often runs $60,000 or more. That’s a lot of metal to have to insure.