Is this the best time to buy the Bimmer?
Yes, according to an article in the Wall Street Journal. In fact, you’d better hurry.
It’s all a matter of the exchange rate between the Euro and the dollar. Though the dollar has been weakening against the Euro – meaning it is worth less in Euros than it was before – the prices of German and other European luxury cars in the States haven’t been increased correspondingly.
That means that profits on European cars sold here have diminished or, in some cases, disappeared. Long-term, it means that there may be more assembly plants built in the United States by European carmakers. But short-term, it means the prices have to go up.
To this point, European car makers have been covering the gap by engaging in currency speculation. Hedging has, in effect, allowed them to lock in an exchange rate. But the opportunities for these deals have diminished as the exchange rate difference has expanded. That’s one of the reasons that BMW plans to double U.S. production in the future.
But, until then, now may be the time to buy. Though prices for American and Japanese autos sold in the U.S. have remained essentially flat for the last few years, prices for European luxury models have risen between 10% and 20%. That’s a fair chunk of change, given the prices at which these cars sell. In the past three years, for example, the price of a Bentley Continental GT jumped $20,000.
It turns out that it is not true that all good things come to he, or she, who waits.
Sometimes, it’s the early bird that gets the cheapest Porsche.