Why not drop price of Air instead of "Air Credit" on invoice?

[JoshG]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

 

[JGard18]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

Agreed. This also means my yearly excise tax is more because they base it on MSRP for new cars

 

[JoshG]

Agreed. This also means my yearly excise tax is more because they base it on MSRP for new cars

OMG you're right... i completely forgot that this is killing us on registration fees as well, especially here in CA.
Come on Lucid... help us out here!

 

[Halodde]

I'm guessing it looks better on the books. It sucks for the buyers but not the shareholders

 

[kopik]

I think removing credit or rebate is much easier and is more palatable for people than abruptly increasing the car price. I'm sure they want to keep that option available if demand increases...

 

[JoshG]

I think removing credit or rebate is much easier and is more palatable for people than abruptly increasing the car price. I'm sure they want to keep that option available if demand increases...

Yeah... Tesla doesn't seem bothered by this. Have you seen the people who chart the MSRP changes Tesla has made over the past few years? Bounces all over the place, sometimes up then down then up again in the span of 2 weeks.

 

[Leftlane]

Would also hurt residuals if they just lower the price versus offering “credits”.

 

[jbed]

Would also hurt residuals if they just lower the price versus offering “credits”.

This - Net net makes leases cheaper by paying down the capitalized cost but keeping residual higher.

 

[kopik]

Yeah... Tesla doesn't seem bothered by this. Have you seen the people who chart the MSRP changes Tesla has made over the past few years? Bounces all over the place, sometimes up then down then up again in the span of 2 weeks.

Yep, Tesla's CEO is well known for always making the right and rational decisions...

 

[Spaceiscoolright]

Yep, Tesla's CEO is well known for always making the right and rational decisions...

This made me chuckle

 

[illopp00]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

This will kill resale when you drop MSRP (much more of an issue for their leasing and customers), and its common practice to discount instead of changing market price. I don't think the insurance argument is valid since there is no data that it is significantly more expensive to insure than other cars in its class and price range.

 

[Batteryman]

Confirmed with my insurance company that a big factor in insurance rate is the actual MSRP of the vehicle (not the price paid). So when Lucid keeps the MSRP high but then just "discounts" them by putting in a credit in the invoice, it's really hurting us all when it comes to insurance rate we're paying.

Any idea why the company chooses to do this? Other companies (Tesla for sure) just change the MSRP whenever (and as often as) they want... Tesla has sometimes adjusted prices on certain models just weeks after a previous price change!

Just curious why Lucid wouldn't just lower the MSRP on the Air since they seem now to always have $10k-$20k of "Air Credit" being applied.

I expect once Lucid gets fully established and EV's rule the world, they don't want to be seen as increasing the price. And you always feel good when you buy something " on sale ". It helps keep the luxury vibe.

 

[JoshG]

This will kill resale when you drop MSRP (much more of an issue for their leasing and customers), and its common practice to discount instead of changing market price. I don't think the insurance argument is valid since there is no data that it is significantly more expensive to insure than other cars in its class and price range.

The insurance (and registration) issues are definitely valid... doesn't matter if it's higher or lower than some other car, it's true that insurance is definitely higher on a given Lucid car with MSRP=$100k but sold with a $20k discount than it is on a $80k MSRP car.
Not sure what the difference is on the resale side... if the car is available at $80k when new (via either pricing method), then wouldn't the resale value of used or lease-end cars end up roughly the same?

 

[borski]

Not sure what the difference is on the resale side... if the car is available at $80k when new (via either pricing method), then wouldn't the resale value of used or lease-end cars end up roughly the same?

No. Because discounts are seen as temporary, resale value is usually off the MSRP, but of course subject to the market.

I sold my Mazda and Kia at a premium, above what it *should* have been worth, because the market demanded it. But if I buy a car at 25k with a 35k MSRP, I can absolutely still sell it for 27k a year later if the discounts are gone, as long as the *current* price of a new car is 35k again.

It’s all about the difference from the new buy price *at the time you sell it*, which is why dropping the MSRP would be a negative for resale (since it would be hard to raise again without upsetting people).

Your point about reg and insurance is also valid though. Two sides of the same coin, and yeah, pros/cons.