Now Arctic Cat

In reply to Tom1200 :

5.4% a year is bad, sure. But not as bad as many other countries have had it. Or as bad as it was in the 70's. 

alfadriver said:

In reply to Tom1200 :

5.4% a year is bad, sure. But not as bad as many other countries have had it. Or as bad as it was in the 70's. 

I recently saw a number that made me kinda shocked...

At 2.3% interest, a $500,000 house was total cost of ownership over 30 years (interest and principle only) was $692,642.  At 5.4%, a $340,000 house TCO over 30 years (P&I Only) is $687,313.   That means that in the past two years, the amount of house someone could buy for the same monthly payment has gone down $160,000.   I think you would struggle to find a decent property up here for $340,000. 

So yeah, I agree that interest percentages used to be much worse, but 8.7% on a 36000 house (to use my parents' first house and 1977 interest rate as an example) is still only a a TCO over 30 years of $100,500.   That's less than purchasing power has changed in the past two!

Just something to keep in mind when comparing interest rates only :) 

ShawnG said:

I'm in most of the local dealerships once a week or so for parts.

The amount of inventory sitting on their floors from all brands is incredible. Surely they can't be moving that much stuff, can they? Do people just have money falling out of their butts?

The prices are nutty too, on all brands. 

There's a Cat in my shop right now. Whoever writes their service manuals can suck it. "Resistance between the two wires should be X" Where might I find the connector? Where on the engine is the temp sender? Parts breakdown just shows the sender, separate from the engine, rather than where it goes. Which connector in the bundle? Why can't you print the resistance / temp chart on the same page as the diagnostic instructions like Polaris does?

I went and looked at a job for some slabs at a dealer and saw the same. Like.......75 snowmobiles minimum in this tiny shop. On shelves, 4 deep and 3 high.

And this is a small shop in an area that they closed 150,000ish acres to snowmobiles in the last few years. It's still popular but I can't imagine selling anywhere near that amount.

Also hilariously after telling me that business was booming and I gave him a figure for about 25 yards of broom finish he told me that he wasnt made of money and sales weren't what he had hoped. This was a conversation that lasted 10min.

Also told me that he expected it to be about $500 and was shocked because " he had a buddy that told him he'd do it for that". Yeah, no and never got done lol

ShawnG said:

...The amount of inventory sitting on their floors from all brands is incredible...

The prices are nutty too, on all brands...

The law of oversupply and under demand. Always a losing proposition.

"I can't afford to discount it, I'll lose too much money." Like keeping inventory isn't losing more money...

alfadriver said:

In reply to Tom1200 :

5.4% a year is bad, sure. But not as bad as many other countries have had it. Or as bad as it was in the 70's. 

An economist once said "when the US gets a cold the world get's the flu".

I can't believe the number of people I see who've been utterly dismissive of inflation..............it's like they are completely ignorant of the financial crisis of the 70s.

We've hit on the multitude of ways that modern business hurts products that are luxury toys. 

Modern business rarely thinks beyond the quarter and current fiscal year. 

Companies used to stow away cash to help weather times like these, but that rarely happens anymore.

Public companies in the modern era use the good times to do stock buybacks to make their share prices look better, rather than keeping the cash for the bad times. 

Private equity rarely does anything remotely good for a business.  

Local Powesports multi line dealer had a 2023 Base KLR Listed for $4,995.

OTD $7,985

NOT

Textron is closing these plants but has enough cash to do a $200M stock buy back.  You know cause it helps the business do things and such. 

Tom1200 said:An economist once said "when the US gets a cold the world get's the flu".

 

I think the expression is, When France Sneezes the whole of Europe catches a cold, which was altered to when America sneezes the world catches a cold.

But in 08 I think the US caught the flu and the rest of the world caught a cold, up here we got the sniffles.

It's different every time, and dependent a lot on the government's policy and preparedness. This time I think you're late to the party. The rest of the world has been feeling it for a couple years now while the US has been rolling along.

And two more US Harley dealers closed in the last two days.

Also, new Side by Sides go for over $30K now. I could get an Elantra N, or a 2-seat side-by-side that I can hardly ride anywhere. The sport catered to the rich for so long that only people with 6-figure trucks  and 7-figure toy haulers can afford the ATVs now. That's great if you can take yearly vacations to the dunes or trails and let all that $$$ sit for 11 months, but most people can't.  Even if you decide to rent, an SxS locally rents for about $500 per day, and you can't rent a snowmobile anywhere, except maybe the UP.  ATVs and Snowmobiles were always luxury items, but now they are in the same class as flying private jets man. 

A few years ago a customer wanted a fancy side-by-side.

We built him a lifted Geo Tracker on 35's that would go anywhere, had power windows, heat, and air conditioning for a lot less than a side-by-side. Plus, he could drive it on the highway.

People complain they're broke but they never look in the garage to see the boat, Harley, 2 jet skis and a pair of quads that are eating all their money in monthly payments. Maybe higher interest rates will smarten people up.

pinchvalve (Forum Supporter) said:

Also, new Side by Sides go for over $30K now. I could get an Elantra N, or a 2-seat side-by-side that I can hardly ride anywhere. The sport catered to the rich for so long that only people with 6-figure trucks  and 7-figure toy haulers can afford the ATVs now. That's great if you can take yearly vacations to the dunes or trails and let all that $$$ sit for 11 months, but most people can't.  Even if you decide to rent, an SxS locally rents for about $500 per day, and you can't rent a snowmobile anywhere, except maybe the UP.  ATVs and Snowmobiles were always luxury items, but now they are in the same class as flying private jets man. 

I dunno, bro.  You can get a lightly used YXZ for under 10k that will deliver 99% of the experience as a 30k RZR and is actually more enjoyable anywhere but the dunes or wide open dirt roads.

And if you want to stomp a mudhole in an RZR you can turbo your YXZ.

Same idea as my previous post, the pointy end of development hasnt really moved the needle much in the last 5 years.  Color changes, maybe a shock revalve or different wheels, but not much that the average dude will see.  

ShawnG said:

 Maybe higher interest rates will smarten people up.

Sure, that's going to happen.

It's funny how everyone's freaking out about these high interest rates. Historically they're not bad, but people have short memories and all they remember now is 1.2% mortgages and think that's normal. If that ever comes back it means we're in serious trouble.

I have a friend who runs a dealership. When asked a little while back how business was, he said, you can't give away a used sled right now. His latest promotion?. BOGO used snowmobiles.

In reply to Peabody :

Yup. when we had our mortgage it was 3.4 and I thought it was a good deal. Low rates just punish savers. 

I'm glad we cashed out though. Yeah, I live in the middle of nowhere but home is where you make it and I don't have to give the bank their $2000 every month.

Peabody said:

ShawnG said:

 Maybe higher interest rates will smarten people up.

Sure, that's going to happen.

It's funny how everyone's freaking out about these high interest rates. Historically they're not bad, but people have short memories and all they remember now is 1.2% mortgages and think that's normal. If that ever comes back it means we're in serious trouble.

I have a friend who runs a dealership. When asked a little while back how business was, he said, you can't give away a used sled right now. Guess what his latest promotion is. BOGO used snowmobiles.

My father in law always brings up the fact that their first mortgage was something like 16%.  Granted, that was on a $50k house, but your point remains-  we've been spoiled by good-to-excellent interest rates for a very long time. 

In reply to ShawnG :

The lowest mortgage rate we ever had was around 5%, and we were thrilled with that.

I just looked up current rates, and they were all under 5%

In reply to Peabody :

I bought my first home in 1983 in Tillsonburg. I don't recall the mortgage interest rate, but I do recall getting CDs at the bank for 1.5% monthly, and figuring I was still losing spending power because the dividends were taxable  and inflation was high. From 1977 to 1982 inflation was between 8% and 12.5%. If you live long enough you'll see these cycles multiple times.

My father recently found paperwork for when he bought a used '77 Buick Century in the very early '80s, and it was financed at a 25% interest rate. He was like "Wow, I don't even remember blinking at that interest rate back then."

In reply to DeadSkunk (Warren) :

I bet T-burg was cheap then.

I remember seeing ads in the paper for homes up this way and thinking, wow it must really be a horrible place if the homes are that cheap. We were young and stupid, and living in Burlington, completely out of touch. I wish we'd moved here sooner.

I looked for Arctic Cats on Marketplace yesterday and found a dealer with a 2024 listed for almost $17K. Now, I grew up in Quebec when Ski-Doos first appeared and my uncles all had machines. These guys were truck drivers, plumbers,millwrights....not wealthy, but they could buy a sled for cash, no loans. A 1968 Ski-Doo was a far simpler machine than any modern one, and I suspect took less work hours to pay for than today. Today's machine are like comparing a new Corvette to my father's '63 Comet, and priced accordingly.

In reply to Peabody :

In 1983 , when I was house shopping, the tobacco industry was down-sizing, so there were lots of houses on the market. I moved there from Toronto so everything looked like a bargain. I was single and the real estate agent showed me four bedroom homes, with finished basements and pools for $120K. I bought a nice ranch for $73,000 with $50,000 down. Paid off the house in 5 years. Life was damned good for the next decade.

In 1987 we scored a 30 year fixed loan at 9%. 

People were cheering us on asking how we got a loan under 10% as it was a shock to see a rate that low.......

When we bought our first house in 91 the rates we something like 7 1/2 down from 9%. So yeah it's cyclical.

The point here is we are in a down cycle and as such people don't have money for toys. while we were in a up cycle various manufacturers went upmarket with their products. Loads of add ons because that's what people wanted. 

Anytime there is a sudden down turn people get caught out; in 08 Vegas was hit really hard with the housing crunch. I knew at least a dozen people working in various trades making well over six figures and they'd all thought it would last forever.

Humans are optimists and behave accordingly. Very few people think about how things can go off the rails...............including CEOs.

Getting back to the motor sports aspect of this thread........ I see so many young guys now completely not interested in cars or anything mechanical. Some in their low 20s that have never even gotten a driver's license. They Uber/Lyft if they actually need to go physically somewhere.  Their jobs are done from home in the IT field. No car payment, no car insurance, no worries. They hang out with their friends on line.  I have a friend whose son bought bit coin at $300 per coin (not sure if that's the correct terminology) back in the beginning. He bought 22 coins over time which are now worth approx 2 million dollars. He's 40 now and never leaves his house and just games all day long. Ok, that's a massive exception and rarity but my point is it's a new world........ how we grew up is changing. And as EV's become more popular what about starter, spark plugs, exhaust systems, radiator manufacturers etc. going to do? You have to change or go extinct. 

In reply to Feedyurhed :

You have a good point.  

I had to ride my bike to the library to get info for reports, we didn't have a computer.  I had to ride my bike to Dairy Queen, nobody delivered drinks to me.  I delivered newspapers on my bicycle, now the news is in my hand.

I had to repair my bike when I broke it. I had to learn mechanics if I wanted to go somewhere. Bikes then turned into cars and we all ditched our bicycles one day before our 16th birthday - beater cars cost $300-$500.