The Monthly Payment Trap: Why Shopping by "What Fits the Budget" Costs You Thousands
Watch in video form on Instagram.
There's a reason dealerships love the question "What kind of monthly payment are you looking for?"
It's not to help you budget. It's because the moment you answer that question, the salesperson is in control of the process. Everything that happens next like the term length, the interest rate, the trade-in value, the add-ons — it all gets quietly engineered around that monthly payment number.
And that's where the trap is.
Why Monthly Payments Feel Like the Right Way to Shop
I get it. Monthly payments are a simple way to understand a car deal. They fit neatly into your budget. You know what's coming out of your account on the first of the month, and that feels like control.
Most people shop this way because it's how everything else in life is priced now: mortgage, streaming subscriptions, phone, and gym. If something costs $900/month and you can afford $900/month, the math checks out. Sounds good on paper.
Here's the problem: a car isn't a subscription. There is way more to a car purchase. It's a large, depreciating asset (or liability?) with total price, term length, and attached interest rate. And when you only look at the monthly payment, you're seeing one of those three variables while the other two are potentially doing some serious damage in the background.
This isn't just a theory but how the Canadian car market has been engineered. As J.D. Power's automotive director told the CBC, dealers are providing financing answers to a "consumer psychology that focuses almost exclusively on the monthly payment, not the sticker price." That psychology is exactly what the whole system runs on.
The Math Bad Dealers Hope You Don't Do
Let's run the numbers from the Instagram Reel, but slower this time.
A $60,000 car at $900/month sounds perfectly reasonable. A lot of buyers in Ontario would hear that and think, yeah, that works. It fits the budget. It's within the range they had in mind.
But stretch that over a 96-month term (which, by the way, is getting increasingly common in Canada) and here's what actually happens:
96 months × $900 = $86,400
That's $26,400 more than the sticker price
Or roughly a 36% markup on what you thought you were paying
On an already depreciating asset!
And that assumes nothing else like extended warranty, paint protection, and gap insurance gets added in. No "dealer admin fee" that somehow appears on the bill of sale. In reality, that $86K number often climbs even higher by the time you sign the final contract..
The monthly payment is one story. The total cost of ownership is another. And the gap between those two stories is where dealers make their margin.
This Isn't Rare. It's becoming the Norm in Canada.
If you think 96-month loans are the Wild West reserved for buyers in over their heads, the data says otherwise.
More than half of new car loans in Canada are now 84 months or longer. And 96-month loans now make up roughly 10% of new car loans in Canada, up from about 2.5% a few years ago.
It gets even crazier when you look at trade-ins. According to Canadian auto loan data, about 30% of Canadians trading in a vehicle owe more than it's worth, with the average negative equity sitting around $6,700 that gets rolled into the next loan. That negative equity doesn't go anywhere. It gets stacked on top of the new car's price, extending terms and interest payments even further.
So when the system defaults to long terms, stretched payments, and rolled-in debt, the monthly payment doesn't just hide the total cost but actively grows it.
How the Trap Gets Set
Here's what typically happens on the showroom floor:
You walk in. You look at a car. Even take it for a spin. Everything looks great.
A salesperson asks what payment you're comfortable with. You say $700. They disappear for a few minutes, come back, and say they can "make it work" at $715.
But what does that number represent? One or more of the following is possible:
Stretched term from 60 to 96 months
Rolled in negative equity from your trade-in into the new loan
Inflated interest rate by a point or two (dealer markup on financing is a real thing)
Add-ons you didn't ask for and packaged them into the payment
Each of those moves individually feels small. Together, they quietly add thousands (sometimes tens of thousands) to what you'll actually pay. And because you were focused on the monthly number, you never noticed.
That's not a dealership being shady. That's a business practice. Technically, all you asked for is a monthly payment to fit your budget. The dealer’s job is to sell cars for a profit. Your job is to know what you're actually buying. Welcome to capitalism, baby!
What Term Length Actually Costs You
Most buyers don't realize how aggressively a longer loan term compounds against them. Canadian auto loan rates in 2026 generally sit between 5.99% and 9.99% for prime borrowers, and longer terms almost always carry higher rates than shorter ones. Lenders price for risk, and a 96-month loan on a depreciating asset is riskier than a 48-month one.
Let’s put some numbers to it. A $40,000 vehicle at 5.5% over five years costs about $543 a month and roughly $6,780 in total interest. Stretch the same purchase over 84 months at a higher rate and the interest pile nearly doubles, often exceeding $12,000. By lowering the monthly payment the buyer will pay thousands extra to do it. As NerdWallet Canada puts it, a longer term can mean lower monthly payments, but you pay more in interest, and your car winds up costing you more than you expected.
That's what the monthly payment obscures. You're not saving money; you're rearranging when you pay it — and actually paying more overall for the privilege.
The Smarter Move: Out-the-Door (“OTD”) Price First
Here's what I tell every buyer I work with: agree on the OTD price before you talk about financing.
It means the full, all-in cost of the car:
Vehicle price
Freight
PDI
Admin fees
Taxes
Everything else. One number to drive away with the car and no surprises.
Once you have that number locked in, financing becomes what it should have been all along: math. You already know the grand total you're paying. Now it's just a question of how you want to pay it. Term length, interest rate, down payment, whatever structure works for you.
The reason this flips the deal in your favor is simple: the dealer can't use the monthly payment to hide anything anymore. Every variable is on the table. You can compare financing offers from your bank or credit union against what the dealer's offering. You can decide whether stretching the term is actually worth it (usually it isn't as it comes with higher interest rate). You're negotiating with full information instead of vibes.
What "Out-the-Door Price First" Actually Looks Like in Practice
A few specifics, because this is where most buyers get fuzzy:
1. Ask for the total price in writing. Not a payment. Not a range. The complete out-the-door number, itemized. If a salesperson resists, that means ether they are not confident you are a serious buyer or there is something to hide.
2. Know the invoice price before you walk in. There's a gap between what a dealer pays for a car and what they're trying to sell it to you for. Closing that gap is the entire point of negotiation, and you can't do it if you don't know where the floor is.
3. Treat the trade-in as a separate negotiation. Don't let them blend it into the deal from the beginning. Get the OTD price on the new car first, then negotiate the trade-in value, then talk financing. Three separate conversations. You'll also want to remember the trade-in tax savings. In Ontario, for example, you only pay 13% HST on the difference between the new car price and your trade-in value, which can be worth thousands on its own.
You'll also want to factor in the trade-in tax savings — which in Ontario are actually written into how HST is calculated. When you trade in at a dealer, you only pay 13% HST on the difference between the new car's price and your trade-in value. On a $40,000 car with a $10,000 trade-in, that means you pay HST on $30,000 instead of $40,000 — a tax savings of about $1,300 right off the top. Sell that same car privately and that saving disappears. Worth pricing in before you decide which route to take.
4. Shop your own financing. Get pre-approved at your bank or credit union before you go anywhere near a dealership. Now when they offer you a rate, you have something to compare it to. Sometimes theirs is better. Often it isn't.
5. Then, and only then, look at the monthly payment. At this point the monthly payment isn't a negotiating tool anymore. It's just the output of a math equation and each input has been controlled by you.
Why This One Shift Changes Everything
The monthly payment trap isn't about being bad at math. Plenty of smart, financially literate people fall into it, because the modern world is designed to keep you thinking in the monthly terms. Dealerships love to structure the conversation around payments because payments obscure the full picture.
But the moment you flip the order — price first, financing second — you stop being a payment shopper and start being a smart buyer. And smart buyers get better deals. Every time.
A small tip like this is the kind of thing that changes the entire shape of a deal in your favor. And not with the old-fashioned thinking of how you need to be clever or aggressive, but with walking in knowing which number actually mattered.
If you're about to walk into a dealership and want a second set of eyes before you sign anything, that's exactly what I do. Book a Match Brief — 15 minutes, no cost, no pressure. We'll go through the deal together and make sure the numbers on the page are the numbers you think they are.
Thank you for your attention.
- David
Ad campaign report: Clutching the used car sales
I’ve recently had the ultimate pleasure of wrapping up another project with the awesome team at Clutch. Once again it was refreshing to collaborate with a creative and professional team of individuals who are passionate about the product and definitely know their stuff.
The main goal of this campaign was to bring awareness to the “Sell my car” service and how quick and simple it is. Creativity, naturally, went a long way. I appreciated Clutch giving me the creative freedom and after submitting a range of concepts ranging from selling my car naked (as the infamous billboard ad says) to some more conservative options, we have picked a “Challenge” video direction.
In the past a “Challenge” type of video worked really well for the team and we wanted to explore this direction again. I attempted to reinforce it further with a cool factor of a proper racing simulator and an even cooler factor of a Porsche GT4 at RCLUB. In my opinion, the following elements of the video make it engaging and organically fit the Instagram feed:
Fun introduction with challenge emphasis
Developing storyline and ultimately a reason to keep watching the video and learn the outcome
Engaging cues and sounds along the story progression
Satisfying ending
After a few drafts and great suggestions from the Clutch team, the final product made me happy and proud. No doubt it will drive business results for Clutch and I wish them all the success in the world!
P.S.: If you’d like to collaborate with Carsmenskii on your next social campaign, I will be happy to help your team reach your business goals! Send me an email or let’s have a coffee!
I’ve recently had the ultimate pleasure of wrapping up another project with the awesome team at Clutch. Once again it was refreshing to collaborate with a creative and professional team of individuals who are passionate about the product and definitely know their stuff.
The main goal of this campaign was to bring awareness to the “Sell my car” service and how quick and simple it is. Creativity, naturally, went a long way. I appreciated Clutch giving me the creative freedom and after submitting a range of concepts ranging from selling my car naked (as the infamous billboard ad says) to some more conservative options, we have picked a “Challenge” video direction.
In the past a “Challenge” type of video worked really well for the team and we wanted to explore this direction again. I attempted to reinforce it further with a cool factor of a proper racing simulator and an even cooler factor of a Porsche GT4 at RCLUB. In my opinion, the following elements of the video make it engaging and organically fit the Instagram feed:
Fun introduction with challenge emphasis
Developing storyline and ultimately a reason to keep watching the video and learn the outcome
Engaging cues and sounds along the story progression
Satisfying ending
After a few drafts and great suggestions from the Clutch team, the final product made me happy and proud. No doubt it will drive business results for Clutch and I wish them all the success in the world!
P.S.: If you’d like to collaborate with Carsmenskii on your next social campaign, I will be happy to help your team reach your business goals! Send me an email or let’s have a coffee!
Escaping to a Tiny Home in Cayuga
Last week we traded the constant hum of city life for a peaceful night in a cozy and modern tiny home tucked away in Cayuga. With an hour drive from Toronto, this little escape was perfect for unwinding without venturing too far off the beaten path. And while being tiny, a family of 3 with 2 cats fit perfectly well! Nestled in a serene spot among the farms and being just five minutes away from a charming town of Cayuga with all the essentials—think quaint coffee shops, cozy restaurants, and all the amenities you could need—this tiny home gave us the perfect balance of seclusion and convenience.
Book your stay at the Botanical Oasis and enjoy 5% off mentioning “Carsmenskii” to Dan and JoAnna - the lovely hosts of this perfect getaway spot.
A Modern Sanctuary with a View
The tiny home’s design is nothing short of stunning. Its sleek, modern aesthetic combines minimalist lines with warm, inviting touches, creating an interior that feels both chic and comfortable. Lots of large windows bring the outside in, filling the space with natural light and offering views of the surrounding countryside. The clever use of space makes the home feel much larger than it is, with every nook thoughtfully designed to maximize comfort. You’ll find yourself amazed by how perfectly everything fits and flows, from the cozy loft bed to the compact yet fully equipped kitchen.
Starry Nights and Quiet Mornings
One of the most magical moments during our stay came as the sun had dipped below the horizon. With no city lights around us, the sky came alive with stars, twinkling brighter than we have seen in a while... It’s the kind of night sky that feels like a blanket of glitter overhead, perfect for stargazing from the tiny home’s outdoor deck with essential fire pit. Armed with a blanket and a glass of wine we settled in to watch the night unfold above—a peaceful escape that for a brief moment made us forget the city even exists.
Meet the Locals: Goats and Chickens!
Adding a touch of rural charm, within its lot the Botanical Oasis hides a friendly petting zoo that’s home to playful goats - Theodore and Giddeon - and a variety of chickens & roosters. We even found a mama cat with a fresh litter of kittens! These adorable animals bring a whimsical, family-friendly vibe to the stay, making it especially fun for kids or anyone who loves a bit of animal interaction. Our son was over the moon greeting the animals in the morning and visiting them again throughout the day. It’s a simple joy that brings you closer to nature and adds a touch of fun to your stay.
Rev Up at Toronto Motorsports Park
For those of us who crave a bit of adrenaline, the location couldn’t be better. Just across the Grand River is the Toronto Motorsports Park racetrack, the infamous place for open lapping and organized events where you can catch the excitement of high-speed action. Whether you’re a seasoned time attacker, a motorsport enthusiast, or just curious to see what the buzz is all about, the track offers an electrifying contrast to the otherwise tranquil setting of the tiny home. Spend your day watching cars tear down the track, then retreat to your quiet haven to wind down under the stars—a perfect blend of thrill and chill.
Close to Small-Town Charm
When you’re ready to explore, the nearby downtown of Cayuga offers a charming escape in its own right. Enjoy a leisurely stroll through streets lined with locally owned shops, grab a latte at a quaint café, or sit down for a delicious meal at one of the local restaurants. The town’s friendly atmosphere makes every visit feel like a warm welcome, and with everything just five minutes away, you get the best of both worlds: the peace of the countryside and the convenience of a small-town experience.
The Perfect Getaway
A night in this tiny home in Cayuga is more than just a place to stay; it’s an experience that blends modern comfort, rural charm, and a dash of adventure. Whether you’re looking to relax, reconnect with nature, or add a little excitement to your getaway, this tiny home has it all. So pack your bags, leave the city behind, and discover the simple joys of a night away in Cayuga—it’s the perfect escape that’s closer than you think!
P.S.: You can also get 5% off your next booking by mentioning Carsmenskii! Here is the booking link.
The Thrill of Being Part of Toronto’s Coolest Car Club
There's something undeniably special about being part of a car club, especially in a vibrant and diverse city like Toronto. It’s one thing to imagine the rumble engines echoing off the towering skyline and the flash of chrome under city lights… However, the community’s camaraderie that comes from a shared passion for all things automotive is way more. And that’s what I get from being part of RCLUB: here it isn’t just about owning a cool (not necessarily expensive) car; it’s about joining a community of like-minded enthusiasts who live and breathe cars, just like you. All while having tons of fun with a packed calendar of events like F1 Screenings, Mechanical classes, and wine nights.
Why Did I Join a Car Club in the first place?
Joining a car club for me has been like unlocking a secret level of car culture that I had seen from the outside. You get to rub shoulders with gearheads who have been in the industry for decades, learn tips and tricks from seasoned pros, and gain access to seriously cool private and public events. From spirited drives on winding Muskoka roads to late-night wrenching sessions during the thick of the winter season, every event is an opportunity to learn, connect, and have a blast.
The Community Vibe
The definite best part of being in RCLUB is the community. It’s not just about the cars—although, let’s be real, the cars are amazing. It’s about the people. There’s a sense of belonging that comes with being around others who share your passion. Whether it’s grabbing coffee at with a random member, swapping stories about your the mod or addition to the garage, or cruising through the streets during a group drive, you quickly realize that these aren’t just fellow club members—they’re friends who get why you spend your weekends under the hood.
The Clubhouse
The second best part for me is the Clubhouse itself. There is a wide variety of car groups out there, but only select few got a place they call home. And let me tell you, RCLUB has quite a spot. It’s a dream come true for a car enthusiast and the coolest bit is that the clubhouse comes with the “garage” section - 2 lifts with fully stocked toolboxes, a proper wash bay, and a parts ordering shelf… There’s also a state-of-the-art sim cave that may or may not have inspired me to build my own sim… And most importantly, the main section is this awesome blend of coffee shop, bar, co-working space, and car exhibition. It is normal to see guests come in and be star struck by the vision.
Access to Exclusive Events
From private track days to invite-only dinners, being in a car club opens doors to experiences that go far beyond the usual car meets. Imagine tearing up the track at Canadian Tire Motorsport Park, feeling the adrenaline rush as you push you and your car to its limits. Or picture yourself at an exclusive car movie preview downtown… These aren’t just events; they’re memories in the making!
The Cars, Of Course
The variety of cars you’ll encounter is mind-blowing. From restored classics that look like they’ve rolled straight out of a time machine to heavily modified track beasts that turn heads wherever they go, there’s no shortage of inspiration. Whether you’re into JDM legends, European exotics, or good old American muscle, there’s a place for you. And if you’re the kind of person who loves talking shop, there’s no better place to find yourself deep in conversation about best turbo kit, vintage Saab mechanic connection, and everything in between.
Making the Most of the Scene
Toronto’s car club scene is thriving, and there’s no shortage of ways to get involved. The key is finding the right club that matches your vibe. Whether you’re looking for a laid-back group that meets for coffee and cruises or a more hardcore crew that’s all about track days and performance upgrades, there’s something for everyone. So, go experiment and find your tribe!
If you want to learn more about RCLUB, I am super happy to give you a tour, since I am actually their brand ambassador. You can find my availability for that by following this link.
On Car Dealer Satisfaction
Car dealer satisfaction is a big deal 🚗
Most often it's a hit or miss, and while individual dealer experience varies, it's often up to the car brand to establish an appropriate framework of excellence.
It's great to see Lexus & MINI taking the crown in 2022, according to J.D. Power Customer Service Index study.
Car Brands 🤗 NFTs
As promised by Gary Vaynerchuk, whether you like it or not, the NFTs are creeping into our lives and taking every mainstream company one by one 👾
So what is the “Automotive” way of implementing NFTs?
Look no further than recent announcement by Acura: First 500 people who order the new Integra will receive an NFT designed by Andreas Wannerstedt upon delivery of their car.
Mind you, this is not the first time automakers are venturing into the digital space. It was done before with:
While the resale value of the NFT itself is speculative, it serves as a proof-of-concept as more and more automakers give their customers an artsy #NFT receipt with the purchase of a new car to display in their shiny digital wallets.
Winds of (online) change 💨
The way we are purchasing cars is changing 💰
By now an interesting shift occurred in the new car purchase behaviour. And you’ve experienced it if you’ve bought a new car recently. You either:
1) Paid significantly over MSRP for the car available on the lot right now
2) Paid slightly over MSRP and waited anywhere between 3-12 months for delivery.
Research backs this anecdotal evidence:
82% of new cars sold over MSRP in 2022, while only 3% did in 2021, and mere 0.3% in early 2020.
Dealers just don’t have inventory anymore.
What opportunity does this behaviour change present? Manufacturers are in the prime spot to transform the dealers into “experience & delivery shops” and shift to online sales model.
Manufacturers certainly have been experimenting, within the law framework limitations.
Even further, the majority of car buyers don’t care that much about the options on their car. They want the best value for the best possible monthly payment.
If all we had to choose was one of three packages, the colour of the car, and maybe wheels, why do we even need to go to a dealer?
It’s going to be a wild ride! 🤠
In the car market? Get ready for a wild couple years!🎢
Right when we thought the nightmarishly expensive 2021 car market is done for good, we are due for what looks like an even worse 2022 and maybe even 2023.
Today and tomorrow the scary Chip Shortage is still the name of the game and while the reasons are slightly different, the outcome is the same.
Just look at the recent headlines 📰
Carscoops.com: "Porsche Reportedly Pausing Production Of All Models"
Bloomberg News: "VW Warns of Output Cuts Amid Tensions Over Electric Shift"
What about Electric cars? Ohh boy ⚡️
The Verge: "Electric car prices could go up even as fuel prices soar"
Quartz: Surging nickel prices are bad news for electric car manufacturers"
The Verdict?
• If you can, keep your current car for another 2-3 years and pray to car gods that it treats you well.
• If your lease is coming off, consider keeping your car or selling it (it's worth more than you think).
• If you are in the market for a new car, Good Luck!
Porsche 911: The Exception.
A new car rolls off the dealer lot and it instantly loses 20% of its value - that's the sentiment in the car industry.
And truth be spoken, this statement is often true, especially for mainstream luxury brands like Audi, Mercedes-Benz, and BMW.
However, there are exceptions. Here's Porsche 911: The Exceptional Car.
For example, try to guess the what someone paid for a 6,000-mile fairly-common 2017 Carrera 4S coupe with original MSRP of $127,000 when new (answer below).
.
.
.
$125k
Or how about not-so-common 230-mile 2021 Turbo S that retailed for $236,000?
.
.
.
$265k
And don’t even mention the GT range cars… They go for way above MSRP.
Reason why is pretty simple. To channel the inner ECO100 prof:
"Market, Demand & Supply, the Invisible Hand."
In other words, demand for 911s is sky high, especially with the shortages in the market and waitlists for the desirable models. However, 911 has always been a staple of holding value due to the timeless design and amazing driving behaviour.
So hats off to Porsche. They are winning this one!
The Z is back in business!
This time it’s simply called Nissan Z.
After years of speculation and uncertainty, we finally have a confirmation. The new Z car is officially a go and will arrive to your local dealerships in early 2022.
Japanese sportscar enthusiasts actually have it amazing these days. There are plenty of rather affordable and iconic options. Some of them are Toyota Supra & 86, Acura Integra, and now - Nissan Z.
With the new Z, Nissan is promising a great package:
400HP 350 lb-ft Twin-Turbo 3.0L V6 that we know from Infiniti Q60 Red Sport.
Choice between 6sp manual and “new” 9sp Automatic with paddle shifters and rev-matching.
Rear-wheel Drive with Limited-Slip-Differential..
Retro-inspired design that blends Zs across decades.
Starting price at around $40,000.
Inside you see a rather familiar layout, very close to the one in 370Z. It doesn’t mess with the established formula, but instead adds a more premium feel with some tech updates.
You see a digital driver cluster, clean-integrated 12.3 -inch display, a “Real” handbrake, great-looking steering wheel and analog gauges. They are:
Boost
Voltmeter
Turbine “tachometer”
You’ll be able to choose from 3 specs for now. On top of the food chain is the fully-loaded “Proto Spec” which doubles as the launch edition and looks almost identical to the Proto Z Concept. In the middle sits “Performance” with luxury interior & sporty performance updates. The entry level is called simply “Sport”.
Something tells me that by calling it just Z and not something like 400Z, Nissan wanted to give us the final product of the lineup, the last masterpiece that captures the essence of Z cars.
In any way we’ll be looking forward to seeing it rolling on the streets, especially in the yellow paint glory!
Epic Games X Cars
10 years ago, who would have predicted a partnership between video game developer like Epic Games and established manufacturers like BMW, GMC, and Ferrari?
Yet, here is an excellent example of a technology that enables cost-saving during development AND personalization opportunity for the car owner.
From the customer perspective, we will see the first official application of Unreal-powered user interface in the 2022 GMC Hummer EV. While it sounds like extra Bells and Whistles on paper, this will offer Hummer drivers great joy, shape the overall pleasant experience, and might even be a differentiator between Hummer and Tesla's Cybertruck.
Even during car purchasing process, this technology offers high-quality graphics for the customer to experience the chosen vehicle with all selected options. Pair it with a VR headset, and you don't even need to step into a traditional dealership...
Moreover, manufacturers like Mercedes and BMW are able to combine VR and Unreal capabilities to discuss and finalize potential designs before lifting a jug of clay, saving tons of money and time in the process.
I certainly wouldn't have predicted this world when playing my NFS back in the day, but here we are!
Aston x Benz
Here is an interesting one: Mercedes-Benz x Aston Martin ⚡️
Aston Martin have been struggling for a few years, proving that producing appealing & high-performing supercars is not enough. Now, their long-term future may be secured with recently enhanced Mercedes-Benz partnership, even though it comes at a high price, including giving up to 20% of the company.
This way, Aston get access to Mercedes' hybrid & electric tech, saving on their R&D costs significantly. The catch is that the agreement is valid until 2027, giving them not that much time to capitalize on it.
Aston Martin are saying new hybrids & EVs are already coming in 2023, and hopefully the company can survive on profitable DBX SUV sales until then!
Making cars is hard. Making electric cars from scratch is even harder...
VW = Nokia of cars?
VW ending up like Nokia or Blackberry? That’s possible says the Big VW Boss Herbert Diess. Let's look further into this statement.
It is true that no auto manufacturer can sleep well these days, as we are experiencing a tremendous technological shift and maybe even a change in the way we perceive cars and their function in our daily lives.
The list of challenges resulting in disruption is long - Autonomous driving / EVs & Hydrogen / in-car tech & entertainment – among all others. On top of that it seems like we are slowly moving to extended Work from Home periods with smaller consumer spending as we foray into an economic slowdown.
Too big to fail? I don’t think so. A company making billions today is not guaranteed a bright future in as little time as 10 years. Plus, larger conglomerates have a disadvantage, in my opinion, being highly bureaucratic in nature and having key decisions take forever. My prediction is that one or more of the top 5 companies that we all know and love today will either close or be acquired.
Toyota? GM? VW? Only time will tell…
Computing is the new horsepower
Automotive computing power is replacing horsepower, according to Audi boss Markus Duesmann, and I couldn't agree more!
As engine power, handling, and "premium" feel are becoming more cost-efficient and common, luxury brands must differentiate themselves using advanced tech.
This is especially vital with electric cars, which have instant available acceleration power and superior handling due to low centre of gravity.
Premium vehicles of tomorrow will have the highest computing capability for advanced software as well as some sort of autonomous capability - exactly the reason why Tesla has seen extraordinary gains.
Great reason to love automotive space - innovation never stops and established brands see a need to be more fluid!
Electric car strategies
Pretty impressed with VW and what they have been able to achieve since Dieselgate.
They put all their money into a dedicated electric car VW Group MEB platform and it will pay off! In general, a dedicated platform for electric cars is an expensive investment and you need to sell a lot of cars to make profit on it. I think they will because the platform will be used on everything from Audi Q4 e-tron to I.D. Buzz to I.D. Buggy.
Today a sexy Cupra El-Born was released showing what the brand can do against Model 3.
500km of range is all you will ever need with fast charging and charger network available across Europe anyway.
Now contrast that with BMW Group strategy.
The brand decided to stick electric motors and batteries into existing model platforms - i4, iX3, iNext. It is cheaper to implement and allows for additional flexibility when customer demand changes from gas to electric to gas or hydrogen (?).
In the end, we will see who is right.
What works for VW is the range of models the platform can be used on. In BMW’s defense, they are protected against demand shifts.
Fun indeed!
-David