When did Cad Motor Div. give up, "Standard of the World" ?

[Jeff Rosansky CLC #28373]

The definition of success......
I think it is when you see a car go down the road while walking the dog and you stop just to see it drive by. Or you see a car up ahead and you speed up to get closer just so you can be sure it really is what you think it is.... and you stay on the road 1 more exit just so you can watch it drive. Or you pull into a parking lot and there is 1 car parked at the end of the lot and you swing around just to see it from all angles............ that is the definition of success.
If a car isn't special enough (or so common) that you don't all that then it really cant be a success..... and if they are so easy to attain, so commonplace that their owners dont take the time to park it at the end of the lot, then it isnt special.
Jeff

[Eric DeVirgilis CLC# 8621]

Not necessarily but it's also more than just about interest rates.  It's about pricing and/or it’s about better lease deals thanks to better residuals and how Cadillac and others are incentivizing and subsidizing leasing and/or it’s about longer and longer term financing and/or it’s about easy credit or some combination of all of this.

Many people that would've never been able to get into a new Cadillac (or Mercedes or......) in times past are doing so today thanks to one or more of the above.   Cadillac is supposed to be a luxury car but it's not the luxury it used to be again because of one or more of the above.

Sure, cars on average are lasting longer and longer and the average age of cars on the road has been going up for decades and decades and decades.  Those 11.4 year old cars may be on their second, third or fourth owner.  So?

This is getting a bit ridiculous.

If the average car is 11.4 years old, chances are it resides with a household of average income. 11.4 years is a far cry from a new car, let alone a Cadillac. 

Where is the evidence of the masses buying new Cadillacs coming from? I have seen none.

I also think you are woefully underestimating the impact of low interest rates.

[Big Apple Caddy]

I really don't know why Cadillac abandoned RWD V-8  full size luxury for so long

One reason they abandoned RWD V8 full-size cars is because they weren't selling for the brand.  The last full-size RWD V8 Cadillac sedan (1993-96 Fleetwood) was outsold by the FWD DeVille/60 during that same period by more than 5 to 1.

or even bothered making small tiny FWD's (ATS)

The ATS is RWD.

[Big Apple Caddy]

If a car isn't special enough (or so common) that you don't all that then it really cant be a success..... and if they are so easy to attain, so commonplace that their owners dont take the time to park it at the end of the lot, then it isnt special.

I don't think the problem for Cadillac right now is that they are too common.   Sales are lower today than many years in the past.   It's the "attainability" part compared to times past that to me makes the brand less special.  To be fair, it's not all Cadillac’s fault nor is this issue exclusive to Cadillac.  The market and financing, leasing, credit terms have made luxury brands more easily attainable and Cadillac simply wanted to remain price/payment competitive.  As attainable as Cadillacs have become, luxury buyers unfortunately are largely choosing one of the many (and also easily attainable) import brands instead.

[Big Apple Caddy]

If the average car is 11.4 years old, chances are it resides with a household of average income. 11.4 years is a far cry from a new car, let alone a Cadillac. 

Maybe, maybe not.  The average age of cars on the road has been on the rise for decades and decades because cars are lasting longer, regardless of interest rates, pricing or whatever.

Where is the evidence of the masses buying new Cadillacs coming from? I have seen none.

Unfortunately, more people are choosing one of the many import brands.

I also think you are woefully underestimating the impact of low interest rates.

Interest rates can be a factor but it’s even more about longer and longer term financing (which can bring payments down more than lower interest rates), favorable leasing deals and other things discussed here.    Again, ALL of this has made new Cadillacs more easily attainable and therefore less special.

[Eric DeVirgilis CLC# 8621]

Again, ALL of this has made new Cadillacs more easily attainable and therefore less special.

Then everything is less special because nearly every major auto manufacturer is offering similarly flexible financing terms - Mercedes to Kia.

In my book, Cadillac had shed a lot of its luster as a premium automobile decades ago - and it had nothing to do the convenience or affordability of the financing terms it did or did not offer.

[Scot Minesinger]

Tying this all back to the original topic, Cadillac lost the moral right to call itself the standard of the world after 1981 when the 4.1 engine was introduced across the entire Cadillac line as the only gas V-8, and was the majority seller.  Then quality deteriorated (say starting in mid 1970's) and peaked in the early-mid 1980's.  By the time the DeVille line was changed in 1985 and the 4.1 remained in the full size RWD, this was the all time low.  This cleared the way for Lexus, Infinity (introduced in 1988 or so, and an executive of Toyota or Nissan driving a 1985 SDV was probably the inspiration), and huge market gains for MB and BMW. 

Usually the great cars are not sales successes.  That is why the RWD 1993-1996 Fleetwoods were outsold by the full size FWD.  Often that is the case the top offering elevates the brand and many people buy lower end to be associated with the top prestige offering.  You know the RWD 1993-1996 Fleetwoods were better than the full size FWD offerings at the time, because of all the closed Cadillacs made between 1993 and 1996 the Fleetwood RWD are more desirable than FWD 6 to 1 now.

I sure Cadillac regains the honor to accurately use that sales phrase again.  Now is an exciting time for me and others that are near the top of their earning potential, and should have a nice choice of new cars over the next decade.  Whereas in 1982 through say 2002, the selections of new cars I would want are extremely few.

[dochawk]

Interest rates can be a factor but it’s even more about longer and longer term financing (which can bring payments down more than lower interest rates),

That is only the case, however, when interest rates are low, as they are today.

When rates are low enough that most of the first payment is interest, extending the term drops the payment significantly.  When rates are high, and most of the first payment is interest,, the difference in payment between a 5 and 7 year loan isn't much.

[Big Apple Caddy]

Then everything is less special because nearly every major auto manufacturer is offering similarly flexible financing terms - Mercedes to Kia.

I sort of said that on this very thread three days ago when I wrote, "Owning a new Cadillac, Lincoln, Mercedes and the like isn't as special as it used to be......"  Obviously because this is a Cadillac forum, the focus has been more on Cadillac.

However, I would say it's a bigger negative for Cadillac and the like than Kia and the like because part of a luxury car’s appeal is (was) its "specialness" where Kia Fortes, Honda Civics, Toyota Corollas, etc. weren’t really special to begin with so potentially being less special is far less meaningful or impactful.

[Big Apple Caddy]

That is only the case, however, when interest rates are low, as they are today.

When rates are low enough that most of the first payment is interest, extending the term drops the payment significantly.  When rates are high, and most of the first payment is interest,, the difference in payment between a 5 and 7 year loan isn't much.

Loan examples:
$30,000 48 month loan at 0% interest is $625/month
$30,000 84 month loan at 6% interest is $438/month

Despite the 6% higher interest rate, the second loan results in a 30% lower monthly payment.  That's what I meant by the availability of longer term financing can make a car more attainable than even low interest rates.

[Eric DeVirgilis CLC# 8621]

Loan examples:
$30,000 48 month loan at 0% interest is $625/month
$30,000 84 month loan at 6% interest is $438/month

Despite the 6% higher interest rate, the second loan results in a 30% lower monthly payment.  That's what I meant by the availability of longer term financing can make a car more attainable than even low interest rates.

First of all, there is no such thing as a free lunch. So called "0% interest" is calculated into the purchase price of the car.  Nobody in their right mind is indifferent between the option of receiving $30,000 today and $30,000 received over a period of years. Period.

Secondly, financing arms of automakers are far more willing to extend repayment terms into 5, 6 or 7 years when prevailing interest rates are low - because it diminishes the implicit cost of doing so. Were the prime rate to suddenly jump to 10% tomorrow such financing terms would come to an abrupt halt (and pretty much everything else, for that matter).

However, I would say it's a bigger negative for Cadillac and the like than Kia and the like because part of a luxury car’s appeal is (was) its "specialness" where Kia Fortes, Honda Civics, Toyota Corollas, etc. weren’t really special to begin with so potentially being less special is far less meaningful or impactful.

A new Cadillac is out of reach for the average car buyer just as it had been for many decades.

Maybe - and that is a BIG maybe - 10% more buyers might be able to afford the payments on a new Cadillac than would otherwise be the case as a result of the financing terms currently available - and that would be making the heroic assumption that all 10% had the credit rating in order to qualify to do so - hardly diminishes the prestige that goes with owning a new luxury car - Cadillac or otherwise.

I think you are overthinking this issue by far.

[dochawk]

Here's a table for $30k


         0.00%     3.00%     6.00%     9.00%    12.00%    15.00%    18.00%    21.00%   24.00%    27.00%    30.00%
24 $1,250.00 $1,289.44 $1,329.62 $1,370.54 $1,412.20 $1,454.60 $1,497.72 $1,541.57 $1,586.13 $1,631.41 $1,677.38
36   $833.33   $872.44   $912.66   $953.99   $996.43 $1,039.96 $1,084.57 $1,130.25 $1,176.99 $1,224.76 $1,273.55
48   $625.00   $664.03   $704.55   $746.55   $790.02   $834.92   $881.25   $928.97   $978.06 $1,028.47 $1,080.18
60   $500.00   $539.06   $579.98   $622.75   $667.33   $713.70   $761.80   $811.60   $863.04   $916.06   $970.60
72   $416.67   $455.81   $497.19   $540.77   $586.51   $634.35   $684.23   $736.08   $789.80   $845.32   $902.52
84   $357.14   $396.40   $438.26   $482.67   $529.58   $578.90   $630.54   $684.37   $740.27   $798.13   $857.79
96   $312.50   $351.89   $394.24   $439.51   $487.59   $538.36   $591.70   $647.43   $705.39   $765.41   $827.30
108   $277.78   $317.31   $360.17   $406.29   $455.53   $507.73   $562.71   $620.25   $680.13   $742.12   $806.00
120   $250.00   $289.68   $333.06   $380.03   $430.41   $484.00   $540.56   $599.80   $661.44   $725.22   $790.85

The higher the interest rate, the less difference extending the term makes.

6% is "low" by historic standards.  12% is "high".  24%-30% is either "Bad credit" or "1970s"

[Big Apple Caddy]

First of all, there is no such thing as a free lunch. So called "0% interest" is calculated into the purchase price of the car.  Nobody in their right mind is indifferent between the option of receiving $30,000 today and $30,000 received over a period of years. Period.

Obviouosly I was using 0% to show that even the lowest interest rate still resulted in a higher payment when longer loan terms are available.   We can also use 6% versus 12% or whatever.

Loan examples:
$30,000 48 month loan at 6% interest is $705/month
$30,000 84 month loan at 12% interest is $530/month

Once again, longer term financing even at the much higher interest rate gives a lower monthly payment or can allow people to get much more car (loan) for the same monthly payment or somewhere in-between.

Secondly, financing arms of automakers are far more willing to extend repayment terms into 5, 6 or 7 years when prevailing interest rates are low - because it diminishes the implicit cost of doing so. Were the prime rate to suddenly jump to 10% tomorrow such financing terms would come to an abrupt halt (and pretty much everything else, for that matter).

Not necessarily and sometimes it’s been the opposite as higher interest rates have also brought on the need for and availability of longer (than prior) term financing in order to try to keep payments acceptable/affordable for customers at least during that period of high interest rates.

A new Cadillac is out of reach for the average car buyer just as it had been for many decades.

Maybe - and that is a BIG maybe - 10% more buyers might be able to afford the payments on a new Cadillac than would otherwise be the case as a result of the financing terms currently available - and that would be making the heroic assumption that all 10% had the credit rating in order to qualify to do so - hardly diminishes the prestige that goes with owning a new luxury car - Cadillac or otherwise.

I think you are overthinking this issue by far.

The average new car loan today is over $30,000.  A new Cadillac today can be had for under $28,000, already less than the average new car loan even without factoring in a down payment.  Leasing can also make Cadilllacs even more attainable payment-wise.   New Cadillacs these days are just too attainable and that makes them less special.

[Eric DeVirgilis CLC# 8621]

The average new car loan today is over $30,000.  A new Cadillac today can be had for under $28,000, already less than the average new car loan even without factoring in a down payment.  Leasing can also make Cadilllacs even more attainable payment-wise.   New Cadillacs these days are just too attainable and that makes them less special.

The lowest priced new Cadillac model today is the ATS of which there are 32 sub models with MSRP ranging from $33,215 to $62,665 and only two have a base MSRP of under $40,000.

Next on the ladder is the CTS line beginning with the base 4 cyl with MSRP of $45,560 up to $87,465 (w/o options) for the AWD Platinum V6. (26 models)

XTS (9 models)  $45,295 - $73,320 (base MSRP) 

ELR (2) $65,000 - $66,295

SRX (7) $37,605 - $51,730 (1 under $40,000)

Escalade (16) $72,970 - $94,950.

So because just 3 models out of 92 have base MSRP of under $40,000 and because the payments on those three cars are similar to the average new car payment today is the basis of your argument of how attainable a new Cadillac is?

Ya okay. 

Incidentally, the fact that Mercedes Benz has been used as taxi cabs in Germany for decades hasn't seemed to have done much to sully Mercedes' image as a prestige automobile either, for whatever it may be worth.

That is all I have to say on this insipid subject.

[Scot Minesinger]

On the leases and economics start another post. 

[Big Apple Caddy]

That is all I have to say on this insipid subject.

Great and I will simply end with this, the fact that new Cadillacs these days can be had for less than the average price of a new car or can be had for less than the average loan on a new car makes them less special.   Cadillac used to be a lot better than this below average territory even at the lower/entry end.