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Sean O'Leary, general manager of Gregg Young Buick GMC, says current shortages are "testing everyone."
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Want to Buy a New Car? Demand, Prices Remain High
BY STEVE DINNEN
I I was speaking with Sean O’Leary about the current (disheveled) state of the automobile sales business when a truck pulled into the Indianola dealership he manages with some good news – two new cars to drop off. That gave a 50% boost to the number of new vehicles he has to spread around a visibly thinned lot at Gregg Young Buick GMC. O’Leary now has on offer half a dozen vehicles – though one of the new arrivals was pre-sold. He’s at around 1/15th his normal inventory level.
Welcome to pandemic-wrought, chip-stiffed America – the transportation sector. Parts shortages, largely in semiconductor chips used to power automobiles, have curtailed assembly lines to the point that there simply aren’t enough cars to go around. If you’re thinking of wrapping a new car in a big bow for Christmas, you might need to hunt far and wide to find what you want. A spot check of some local dealers requires a little extra attention to detail. In a rundown of its 2022 model year inventory, Karl Chevrolet in Ankeny, for instance, lists 119 cars and trucks for sale. But only 19 of them are actually at the Ankeny lot; the rest are “in transit” or at other company stores.
And the price? With inventories so low, Detroit has little incentive to offer sales inducements. Dealer discounts of thousands of dollars have now faded to hundreds, or just disappeared. MSRP, Manufacturer’s Suggested Retail Price, or the sticker price, is pretty much what you’ll pay.
O’Leary’s dealership is abiding by MSRP. Not everyone is. He showed a photo of one GMC Sierra – not one of his – whose list price of $54,995 got boosted by the dealer to $56,320. In an extreme case, in California, O’Leary spotted a Toyota RAV4 SUV that carried a dealer-added $40,000 surcharge, taking it to more than $90,000.
“It’s testing everyone,” O’Leary said of the current shortage. “Both the consumer and the dealer.”
The shortage of new cars has led to increased demand – and pricing – for used vehicles. O’Leary said some auto dealers won’t sell a new car unless the client has a used car to trade in. Some late-model vehicles are selling for nearly new car prices.
If you really want a new car, and have a good used car, you can dive into a vehicular arbitrage game of sorts by selling the now over-valued used car and grabbing the new car at an MSRP that hasn’t escalated as much. Happy hunting.
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Cyber security attacks have become more prevalent in this digital age. Here are some best practices companies should include to protect their data and employees.
... Read more »
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Changes May Be Coming to the 'Back Door' Roth IRA
BY STEVE DINNEN
Congress could soon close the door on the “back door” Roth IRA. Legislation to this effect already has passed the House of Representatives, by way of the Build Back Better bill. Its fate now hinges on what the Senate decides.
Roth IRAs are a great way to accumulate wealth for retirement, since earnings are tax free. The knock on Roth IRAs, however, is that they aren’t available to high-income earners. You are locked out of a contribution if your 2021 Modified Adjusted Gross Income exceeds $140,000 for a single filer, or $208,000 for married filing jointly. (Roth IRAs have another shortfall in that they cap contributions at a puny $6,000, or $7,000 over age 50).
The back door Roth is an end run around this income cap. You simply open a traditional IRA, using non-deductible money, and then convert it to a Roth (paying any applicable taxes, one time). The House is onto this gambit, though, and proposes to end it. We’ll know soon enough whether the Senate concurs.
Also up for debate is a House-proposed clampdown on conversions of the workplace Roth 401(k). It’s an even sweeter deal than the individual Roth conversion because it doesn’t have income caps and allows for much higher contributions. Some of these clampdown features start next year; others, not until 2032 (yes, you're reading that right – 10 years from now).
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The 10 Most Expensive Zip Codes in the United States
BY NICOLAS VEGA FOR CNBC.COM
For the fifth straight year, Atherton, California’s 94027 has kept the title of most expensive ZIP code in the United States.
With a median sale price of $7.47 million, the Bay Area suburb is far and away the priciest place to live in the country in 2021, according to data from Property Shark, which analyzed residential transactions in the U.S. between Jan. 1, 2021 and Oct. 22, 2021.
Atherton, which is home to NBA champion Steph Curry and former Google CEO Eric Schmidt, saw its median sale value climb 7% year-over-year, Property Shark reports. That figure is about $2 million higher than runner-up Boston, whose 02199 ZIP code had a median sale value of $5.5 million over the past 11 months.
The 10 priciest ZIP codes all had median sale values of at least $4 million, with six located in California. In fact, of the 127 most expensive ZIP codes in Property Shark’s ranking, 70% are located in the Golden State, while 17 are in New York. READ MORE.
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Retirement Account Balances Reach a Record High
BY PAUL BRANDUS FOR MARKETWATCH
Here’s some really good news: More Americans have a cool $1 million or more in their retirement accounts than ever before. That’s according to the latest data from Fidelity Investments.
The Boston-based investment giant says the number of 401(k) accounts with seven-figure balances swelled 84% in the 12 months ended June 30 to 412,000, while the number of seven-figure IRAs jumped more than 64% to 341,600.
Together, the number of accounts with $1 million or more grew 74.5%, but it’s not clear how many individuals this represents, since investors can have multiple accounts.
While terrific news, it shouldn’t come as a surprise: The stock market has been soaring. The S&P 500—the widely-watched investment benchmark—has nearly doubled since the March 2020 pandemic low. Think about that: If you had put money into an index fund that mirrors the S&P, you’d have doubled your money in a year and a half without breaking a sweat. READ MORE.
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