Used car market gets even more bizarre
axios.com
axios.com
I knew it was bad, but I was shocked of how bad it was. I went to multiple mega dealerships with 500-1000 cars that were all spoken for. Most had 0 new cars available.
Used car market is crazy.
I went with a new one because that particular vehicle ended up costing me more monthly than a car payment.
The 2 Toyota and 1 Lexus we own are between 14-11 years old and look and run like they came off the assembly line yesterday (all 3 were bought used). I figure I am still good for another 5 years minimum on all of them.
If you bought a Bubble Taurus in '99 and fed it a new transmission every 100k you'd probably come out the same after adjusting for inflation between then and now.
I deal exclusively in shitboxes that are about 10yr beyond what the demographics most represented. Anyone peddling a "just buy a particular brand and you'll be all set" narrative is just wrong. If you said "be rich enough to do maintenance on the book schedule and not abuse your vehicles" you'd be on to something. There's a reason everyone wants a used grandma car.
Your Toyotas probably have well more than 5 years left in them too. Unless you're someone who replaces cars at 100,000 miles, which a lot of people do.
I usually avoid buying new but used cars are nearly the same price as new (if you can find a dealer that hasn't done ridiculous 'market adjustments').
So we bought new. We had to buy a car that was just off the delivery truck before the dealership had it inspected. The one we'd looked at two days before was long gone and they expected the one we bought to be sold the next day.
My neighbor traded in his truck for more than he paid for it two years ago. It's bonkers.
Mechanics are about to make a killing.
If you are beneficially affected by price changes, then price changes are a result of supply and demand.
The market clearing price has increased, but sellers refuse (or are banned) from increasing their prices. That way leads to queues and shortages.
Of course, in the opposite direction you get inventory piling up (or unemployed people).
Quite rational market adjustments.
However...I did end up going to another dealership that didn't do the adjustments. Since I tend to stick with vendors, especially for large ticket items, I suspect the total lifetime value the first dealership missed out on by tacking on the market adjustment (that they didn't tell us about until we asked -- it wasn't on the sticker), eclipses the extra profit they would have made on that sale, even when adjusting for the time value of money.
If you're a mechanic and already have plenty of business, I imagine it's a tough call: do you jack up your hourly rates and take advantage of the windfall, at the risk of customer loyalty in the future? This insanity will pass, after all.
He's a great guy- if anyone is in Bay Area and needs a good honest mechanic for foreign or domestic, shout out to Jack at Tom and Jacks in San Bruno!
If so, I'm not sure why you'd assume that. It seems more likely to me that the mechanic is simply choosing his work based on personal interest and perhaps profitability. I don't see why we'd ask anything more than that from him.
I feel that the instant knee-jerk accusation of discrimination against someone you never even met says quite a bit about you.
Fairly common for a job that gets charged out at X hours to only need X/2 hours. And then there's work that gets charged at shop mechanic rate but gets partly or completely done by an apprentice/assistant.
But being from the rust belt, I know what you mean about corrosion.
Also the rusty bolt thing is over blown. You learn what you can and can't get away with and stop snapping them pretty quick.
Also the mechanic we're discussing is in CA so it's not like he has that problem.
Obviously everyone wants moneyed customers. The closer you are to the money the more you get.
I'm not saying the primary purpose of his messaging was to tell the poor to screw off, just marveling at the fact that it does nice double duty.
Does anyone?
> oil change on a '15 4Runner owned by some yuppie
Yuppies don’t drive 7 year old cars
Joke.
There was a multi-year period where the demand far exceeded supply, but they didn't seem to adjust their billing rates accordingly.
I never got a clear answer as to why. The one guy I talked to seemed scarred by a very demand-limited market some years prior, so maybe he was fearful of making any changes that might leave him under-employed.
Same thing happened with a flooring guy who could have done $30k worth of work. He kept claiming he'd send us a bid but eventually ghosted us.
Tradespeople can skip doing the hard/less-profitable jobs right now while the market is hot.
I had an aunt where the neighbour's son replaced a section of fence and just said to pay what they felt was reasonable and it was difficult for my aunt to come up with a number. Probably wasted a few hours coming up with that number, ugh.
I can't be alone in never buying a car that has this feature.
[1] https://www.latimes.com/world-nation/story/2021-11-09/congre...
See e.g. https://www.cdc.gov/injury/features/global-road-safety/index.... From the first few paragraphs:
Road traffic crashes are a leading cause of death in the United States for people aged 1–54
More than half of those killed are pedestrians, motorcyclists, or cyclists.
If someone wants to do some old school driving in 2040, go have fun on a private racetrack or whatever. You can even ignore speed limits.
Projecting 6 different insta feeds on the walls and floor and ceiling will be so freeing for our kids. They can save up for a Meta subscription with GTA GFE. Just like driving in a real car with a real girlfriend, but better.
I'd still like driverless cars, but privacy and freedom of movement rights protections need to be thought about.
The problems you mention are real, but a driverless car doesn't change much. Havoc due to hacking is already possible today, with OTA software updates for cars. Tracking is also possible with cell phones. Driverless car software could be like GPS updates today: Some corporation provides a yearly update and that's it.
But it's still legal to buy and drive a car from the 80s that can't be hacked.
Looking ahead, my concern is that we'll begin to see laws that restrict human controlled vehicles from autonomous lanes and eventually whole roads. This would take a lot of burden off the manufacturers. If cars can use a common protocol to communicate across brands, you don't even need traffic lights or turn signals; you don't even need to stop at intersections. Cars can just slow down or speed up by a tiny bit in coordination with other traffic. At that point it will be impossible for a human to drive at all.
It's impossible to separate increasing vehicle autonomy from increased government control. Once there's an ability to make any car pull over to the side remotely, knowing who is in it and where it's going, all freedom of movement and therefore all human autonomy exists completely at the whim of government. That level of control will be abused sooner rather than later, if not in America then certainly in authoritarian states.
Full self driving is an authoritarian trap.
To me this is an extremely dystopian outcome, but it's inexorably where we're going once we have full self-driving. And the Tesla fans, not to mention people who are like "oh humans shouldn't even be allowed to drive! Too dangerous!" will be living in this and looking back wistfully at the days when you could make eye contact with a driver and know whether it was safe to cross the street.
My guess is we'll establish a maximum speed allowed to drive for humans, say 30km/h up to 50km/h. Speeds above this are reserved for robotic drivers, outside inhabited zones. Some of these roads are vehicle only, like we have E- routes in the EU or I-routes in the US. Here, non human traffic is forbidden. Then there are the secondary routes, where high speed should be robot-only and robots have to take care for other traffic. Roads can have markings adapted for easy optical recognition, but driverless cars are required to drive safely without them.
Eye contact with a driver does not at all make it safe to cross a street, as current death toll proves.
You're right, the bicyclists will likely ruin the possibility of total automation for the self-driving fans. I hadn't thought about that. Two clashing visions of a testicle-less utopia. Both entirely devoted to their vision of different worlds in which no one dares take a big machine themselves and drive it down a road without permission.
If it comes to the point where you cannot drive your own car on the highway without computers in it, then you have no freedom of mobility. Your most basic right as a human is gone and your children will grow up in a world where they don't know they have a natural right to go places without asking permission. The only people who will go wherever they please without asking permission will be the people who sold you that technology and who captured the regulatory process to make it required by law.
Autopiloted cars are just investor marketing.
This reminds me of how only rich people could afford to fly places in the 1940s; then the upper-middle class could afford airline vacations in the 60s-80s; then by the 2000s, it was available to everyone so everyone had to be treated like scum/cattle, and once again if you wanted to take a nice vacation you had to be rich and buy first class tickets, or rent a jet.
So your ideal vision for 2040 is that everyone is herded everywhere and no one gets to experience even a fleeting sense of freedom on the road, except the extremely rich who can afford cars that aren't road-legal and can only go to racetracks? Or maybe large private land holdings?
Because currently, we still live in a society where the average person can experience a modicum of freedom - mobility, autonomy, and privacy - by getting in their car and driving it without help from a computer or monitoring from the government. I think that's worth preserving. A generation that grows up without ever feeling that freedom will be way too easy to control.
Maybe driving your own car will seem anachronistic like, say, writing in full sentences without emojis. But if you think about what we'd be losing, as a personal experience of having the privilege to take yourself anywhere on your own recognizance, it seems like a massive step backwards to deprive humans of that. And it sounds like imprisonment.
No thanks.
I'd rather we do away with the car is freedom trope. Most cars arent even useful, just signals to your nieghbours and friends that you are, in fact, balling. No thanks. Uber had the right idea. Don't own it, go where you want and pay up. Should be cheap when it's automated. Don't like that then take public transport...and if you can - just walk. What happened to just walking?
Right...you can't because our spaces are designed for car travel, not people. Do you see my point?
Did you drive 100+ miles, one way, for epic parties when you were in high school? I did. That's how rural Arkansas works.
My first tech job required me to go 130 miles one way for months before I could afford my own place and move closer. How would I have done that with your rules?!
Or a train.
Also, those cellular modems in cars tend to use older technology (this is fairly standard for the auto industry in general since there is such a long regulatory approval process for anything). My 2018 model year car will no longer be able to communicate remotely in January 2022 because the cellular network is being deprecated.
But I won't buy a car where those things are integrated and can't be turned off. Several people here seem to assume that I don't understand that almost all cars from the past decade have this capability.
It's one reason I drive a car from 1980, with basically no electronics whatsoever. (Other reasons being: it's more fun, it's simple to repair, and it will still run after an EMP).
If you prefer older cars that's fine, but there's an easy workaround if the issue really is whether or not there's a cellular modem. I've done this before on multiple vehicles and it won't void the warranty for anything other than parts you want to disable already.
My GF has a 2008 Lexus with a GPS/nav that is definitely not Android. All the maps are onboard on a drive. She actually can't update her maps anymore because the physical ROMs or whatever stopped being produced a few years ago. I'm assuming that newer cars just download their maps from (somewhere? Is this connectivity part of what's sold as a "navigation package"?)
There are other reasons I'm not a fan of newer cars (auto-braking, too much fly-by-wire stability/antilock/nonsense pushing your pedals when you don't want them pushed, and "hill hold"). But disabling the tracking stuff would make it more palatable.
Ironically, my radar detector knows exactly where I am and communicates with a network all the time when it's plugged in. But that's for my own joy =D
Any vehicle sold with telematics available not only has GPS, but that telematics system is feeding the manufacturer data from the vehicle, including your location.
This happens whether you're subscribing to the telematics service or not. It's always on. Some vehicles do it multiple times an hour or more.
It's very interesting, because this situation mirrors what economists predict about minimum wages:
Employees take their compensation as a mixed basket of wages and non-monetary perks (like nicer working conditions or opportunities for learning and advancement). Different people like different baskets. Minimum wage laws make some of these baskets illegal.
So orthodox economics predicts that increases in minimum wage leads, amongst other things, to deteriorating working conditions.
Now the situation here is reversed: there's effectively a wage ceiling when service shops are unwilling to raise prices. But they can still raise compensation, by improving working conditions.
Something similar-ish happens with very high marginal tax rates: eg the US used to have crazy high marginal tax rates after WW2 that essentially amounted to salary caps. Cue companies finding all kinds of fringe benefits that were taxed less, like health insurance.
I've never heard that take before, but it's a fascinating idea.
Unfortunately, I think the problem we've run into in the U.S. is that minimum wage jobs have already hit rock bottom working conditions. Raising the minimum wage is the only thing left to improve conditions for those stuck in them.
What I think would actually happen is (perhaps some job losses, but) more jobs being pushed underground and laws skirted.
I'm not against minimum wages or increasing it as such, but if the lowest paid workers are in such dire conditions, the fundamental problem seems to be that they have insufficient bargaining power. A huge issue has to be illegal immigrant population that largely competes for low wage positions -- I've heard it's estimated about 15 million but could be as high as double that. Absolutely staggering numbers in either case and being concentrated in the supply of low skill labor it hits the most disadvantaged Americans including minorities hardest unfortunately. I know it's verboten to speak about now, but even champions of labor and the disadvantaged such as Sanders talked about the problem before Trump sent everyone off the rails (and/or the corporatists completed their capture of the left-wing side of politics).
No, that's just one outcome. I already described another outcome higher up the comment tree: reduction in non-wage benefits.
In practice, you would probably see some combination of outcomes.
> A huge issue has to be illegal immigrant population that largely competes for low wage positions -- I've heard it's estimated about 15 million but could be as high as double that.
The demand curve for labour seems to be nearly horizontal, ie in the longer run more or less labour supplied (almost) doesn't change its price.
> [...] but even champions of labor and the disadvantaged such as Sanders talked about the problem [...]
Are you suggesting that those people who are desperate enough to become nearly right-less illegal immigrants do not count as labour or as disadvantaged?
(I can very well believe that Sanders doesn't care about them, of course.)
I was not replying to you. I asked the posted who claimed that benefits had already hit a floor. I was responding to his supposition.
> Are you suggesting that those people who are desperate enough to become nearly right-less illegal immigrants do not count as labour or as disadvantaged?
No I'm not suggesting that. Seems pretty accusatory and not really in good faith, unless you can explain how on earth I might have been reasonably misinterpreted as suggesting it.
You can advocate for and advance your own interests or the interests of your voters and constituents first without being subject to these stupid witch hunts. Everybody does it, even you. I don't go around accusing you of not caring about poor people or refugees because you have failed to sell all your belongings and donate your wealth to the less fortunate as well as your income except that which you need to barely keep yourself alive.
We are talking about wages in the USA, and massive downward pressure on low skilled labor comes from illegal immigrant workers. If you can't cope with this or debate it rationally then that's your problem not mine.
Only, that's not true.
Have you seen working conditions in poorer parts of world, or in previous decades when the US was comparatively poorer?
What makes you think 2021 US is 'rock bottom'?
> Raising the minimum wage is the only thing left to improve conditions for those stuck in them.
Well, here again orthodox economics suggest other avenues: decrease taxation on labour, support increased competition between employers for labour (eg by allowing easier access by foreign companies, by making formation of capital easier, etc).
A really big deal in the US would be to 'decriminalize' construction of new housing. That by itself would open up oodles of blue collar job opportunities to compete with existing employers, and it would also decrease what everyone (including workers) has to pay afford a place to stay.
Also, they have used this era to weed out the pain-in-the-ass customers.
I'd imagine it's probably a bit of a mixed bag for mechanics, depending on what sort of vehicles they specialize in, where they're located, etc.
I had only done light maintenance/upgrade work on my cars prior to the pandemic. In the last year I've replaced a rear main seal, front + rear rotors + pads on all my cars, new control arms, shocks, and struts on a sedan, a ton of electrical work, cold air upgrades, every single fluid drained and filled, etc. DIY content on YouTube is getting to the point where a middle schooler can fab a car from scratch given enough time and motivation. YMMV (literally).
I remind myself of the the 5-digit savings whenever I'm in line at Harbor Freight... which is often.
Of course a professional will accomplish tasks faster than a DIY'er checking YouTube.
But, as OP says, there's savings AND personal satisfaction involved. Why is time-efficiency the metric you're weighting in value?
If a pro mechanic would charge me $100/hr times the book time of 1.3 hours to change pads on my car and I take 3 hours to do it, I saved $130, not $300.
For simple jobs, I can usually match or slightly beat the book rate. Because I don’t have a lift, a lot of undercar work takes me loads longer.
When confidence in repairability is low and stakes are high, it probably makes sense to opt for a shop.
Shops make sure this doesn't happen by lazily hitting that bolt with an impact gun. Might never come off again.
It's always something!
Was fine until oil pressure built up and the sprayed all over the engine bay.
Probably dirtier than yours. Originally thought “must be a plastic fire somewhere”. Oops.
As for fluids, I've done oil and automatic transmission changes. I haven't tried brake fluid or coolant though.
I used a 2"x4" wooden beam. Felt a lot safer.
Coolant is typically pretty easy and the intervals are longer, although I end up sticky with glycol every time I do a flush. If you ever decide to tackle the brakes, I picked up a $10 vacuum hand pump on Amazon that saved me from jury-rigging a 2liter bleeder bottle and finding someone to pump the brakes for me. Highly recommend.
Normal market: “this product costs $2.60.”
‘Wasn’t it like, $2.10 a week ago?’
“Yes it was.”
Cars:
“This car is $26k. Oh, also you have to pay a $2k market adjustment, because man things are just crazy.”
That is, in normal markets, you just raise the price, you don’t need to refer to an explicit “market adjustment”, especially not as a random addon.
So you instead write it as $35K and tack on “market adjustment” or “additional dealer profit” or whatever else of $2K.
Normal market car pricing: "This car costs $26k. Oh also, we are giving $2k off because man we have so many of these. And so does the dealer in the next county over. Please buy from us. Today."
This is normal because discounts motivate buying behaviors, not because car manufacturers are laughably bad at setting MSRP. But also, it's critical for prices to be flexible regionally, and faster than the manufacturer can declare what the fair price should be.
Saturn famously tried non negotiable national sticker pricing. Just like Sears tried having no sales whatsoever. Both had to revert to standard pricing behavior.
My point? In a normal market, the sticker price is not the price.
And it’s not fair to advertise one price and add on a market adjustment when someone asks to buy it.
Sold my 2018 Toyota Tacoma pickup to Carmax for over $32K. I probably paid more than that a few years ago when I bought it new, but I thought it would have depreciated much more than that.
It's nice on the selling end.
It seems like the dealers who didn't make these 'adjustments' are leaving money on the table?
> Mechanics are about to make a killing.
Well, we often hear exhortations to reduce-reuse-recycle. Here, the market is sending a price signal exactly along these lines, and people react appropriately.
>It seems like the dealers who didn't make these 'adjustments' are leaving money on the table?
I believe their behavior is somewhat constrained by the manufacturers, who have slightly different sales goals in mind. They take a longer view, where new car sales are more than a sale, it represents a chance to upgrade the customer in a couple of years.
Dealerships, on the other hand, often take a very short-sighted view of customers.
We have now had 4 calls from the dealership where we bought it offering to buy it back for thousands of dollars more than we paid this spring. So far their best offer was $6500 more than what we paid.
It's outrageous.
Wow. That would be tempting. I'd probably take an offer like that and just use Uber for trips for a couple of years until all of this blows over.
In America how do you get the spec and colour you want if they've already made the car?
And don't you object to buying something that's been sitting around outside for a while with lots of people getting in and out of it?
If you have the desire for a specific color/options and it’s not on the lot, the dealer will either get one from another dealer or order you one from the automaker.
Until there's a shortage of something you want, which in turn drives up the price - then it's a scam?
https://www.yahoo.com/now/ally-financial-ally-beats-q3-12451...
If only all the small US banks and credit unions held off on their (~2005) indirect lending strategy and saved it for now, it might have actually been profitable!
The bank only loses if you default early in your loan, and the price of the collateral collapses.
It'll be interesting to see what this does to the credit quality of future borrowers, which is the only leverage the bank has. Secured loans on appreciating assets mean that at some point, the bank has an incentive to write loans that they know are not going to be repaid, because they buy only part of the asset, receive a stream of cash payments for it, and then get the full asset anyway when the borrower defaults. It's like a call option that you get paid for instead of paying for.
Come to think of it, I wonder if this is why we got NINJA loans with the 05-07 housing bubble. Once housing prices started going up consistently enough, it becomes profitable to write loans to borrowers that you know are going to default, because you can take the house and enjoy the asset appreciation while getting a nice stream of cash flows in the process.
Not the way it works, for two main reasons. First, people who owe less than the house is worth are generally not foreclosed on - in the worst case they just sell and keep whatever equity they get away with. Second, legally the bank can't keep any surplus. If they foreclose on your house, they have to sell it at auction and keep only up to the amount you owed. They would have to give you any excess. At least for houses, banks aren't allowed to profit from foreclosures.
I assume the details depend on whatever the fine print on your mortgage says?
Seems a bit roundabout. If they want to bet on appreciating assets, they can just buy those assets directly?
> Come to think of it, I wonder if this is why we got NINJA loans with the 05-07 housing bubble.
There was no housing bubble. Only a big housing 'burst'.
See eg https://www.idiosyncraticwhisk.com/p/a-slide-deck-on-bubble-... (and if you are really interested, I can give you some better material.)
Long story short, pay your bill.
Is this why some people stick insist on making payments by sending cheques through the post?
Yes. And for the appreciation to persist, the supply chain issue wouldn't just have to persist, but get worse.
Current prices reflect expected supply chain issues. That's both prices for new and used cars.
That's because in whole-sale you typically have something like 90 days to pay your bills. But Amazon sells its inventory on to retail customers (who up front) before those 90 days are up.
Now, if I describe it as 'negative working capital' it sounds like some desirable thing. But the flip side is that you can also describe it more mundanely as: Amazon gets loans from its suppliers.
What makes you think so? If you offer attractive enough terms, you can get financing from your suppliers just fine.
And what makes you think Amazon, Carrefour or Walmart etc have monopsony power?
From my perspective it's pretty crazy, the car appears neglected with a very rough exterior... it doesn't scream "buy me, you won't regret it". People are behaving desperately.
But yeah, occasionally it's a gearhead who wants to do something like that - it's the exception though. Those instances we end up talking shop, and that's kind of always been a thing (I've driven Miatas for over a decade, this is my third).
The ~recent thing is the parents harassing me, it's like they can't find cheap first cars for their newly licensed children.
Back in 2016, 3k was a clean sub 100k mi Miata
Today, hard to find a reasonable one.
For example my GPU used is seemly now more valuable than I paid for it new, I will soon attempt to sell it.
Meanwhile new GPUs area crazy expensive too, people like to blame miners but even GPUs terrible for mining are crazy expensive, I actually then considered mining to pay a new GPU, only to find out that mining is not being too profitable either, the most profitable GPU I could find visiting mining calculators would be whatever one in my country would take me 2 YEARS to pay off, so I doubt miners are actually that hot for GPUs...
I also need a SSD ( don't have any, I still use HDDs), found out my mobo has poor suport for one.
Calculated price for new computer assembled from parts, found out it is not even POSSIBLE to build one, a lot of parts are 100% out of stock, for example every single website I entered has mobos with AMD X570 chipsets sold out, sound cards, even crap 5 USD ones to plug on USB? sold out. SSDs bigger than 500gb? Sold out. GPUs? Mostly sold out excepting really crap ones (those tiny boards that fit in a 1x slot) or really good ones (those that cost as much as a motorcycle).
CPUs? A bunch of them sold out too, one I actually saw with plenty of stock is EPYC 7742 that has the same price as a SUV here O.o (I am not even sure what someone would use that CPU for... seriously what you do with 128 threads???)
Also my wife wanted a TV (we didn't had one, we were using a borrowed one). We visited a lot of stores before we found one in stock, and when we found it and purchased it, it triggered multiple stores from the same franchise to start to angrily message each other arguing about who should have the last pieces in their storefront...
FWIW, I just extended the lease on my Leaf for the 2nd 6-month term because there is simply no new Leaf in stock anywhere within 100 miles of Seattle; at this rate, I might as well buy it out (even though when I got, I negotiated for a great monthly rate and didn't care about the residual).
You'd have to look at the actual discounts they give: if they are small enough, they might just be equivalent to those flyers you mentioned.
(Though in a well functioning market, we shouldn't see empty shelves. We should just see higher prices. And if you raise prices enough, you can just drop them a bit for a promotion.)
You can find tons of similar models like my PC for sale on ebay for dirty cheap and they are perfectly acceptable for home use.
No, they will not sip power like an M1 or pair well with a RTX 3090 but they will do everything else just fine.
That said, I think it's only because the demand hasn't reached this low yet. But there's still a fair amount of supply left and it's a mixed blessing that the last few years hasn't seen drastic CPU performance gains that hasn't yet been stripped away by software, so anything even a decade old could be suitable, depending on your use case.
There is now some pricing overlap that never used to be there.
Some normal cars, especially ones in high demand like the Kia Telluride, are quite marked up. Here's an almost-new Telluride listed for $46,990, but if you look at the window sticker, the MSRP when new was $35,770. https://www.carvana.com/vehicle/1936818
One the other hand, the Mercedes GLC isn't at the top of most people's lists. Here's an almost-new one listed for $49,990. According to the window sticker, original MSRP was $51,125. https://www.carvana.com/vehicle/2059912
MSRPs $15k apart, but now listed for a just a $3k difference.
You may do best with some anecdotal evidence, however.
I moved from the city to the country this year and needed to buy a 2nd car to get me to/from the train station once work went back in person. We were targeted for an October return, so my plan was to buy a cheap used car starting around July. I quickly found that cheap used cars don't exist, but certainly the ones that were the least overpriced were luxury makes, which I associated with concerns over long-term reliability - but I now think that was incorrect.
Once I gave up on used cars, I started looking at new cars. "Normal" dealerships were an incredible pain, especially once they found out that I was not going to trade in the car I arrived in. They all wanted high prices above sticker price, long waits, all sorts of games with add-on packages, etc. The two closest dealerships to me were Mercedes and Audi, and when I went to them I found no games, no markups, no giant crush of buyers clogging everything up, etc. I ended up with an Audi Q5 at ~$2k below sticker price (~$46k), the same price range I was being quoted for a Honda Ridgeline (well over sticker - and not even the top model).
In normal times it probably would have been $5k below sticker, but whatever. The return to office got delayed again - maybe early 2022 - so it now just sits in the garage getting dusty. Still has the new car smell.
VW will be looking at the shortages and making the calculation that they are better off putting limited resources (chips) into Porsches rather than Skodas.
I have a feeling that this particular shitshow is still in Act I. Nobody at my company is ordering any new 911s, considering that the brokers have jacked up the prices of $50 FPGAs to $750.
do I have news for you :-)
https://www.youtube.com/watch?v=JNkwv0SHEEs
https://www.youtube.com/watch?v=0DTibY2dDN0
TLDR maybe 2 cars per dealer allocated to the end of the year
I suspect that it's a function of shortages. When there are not enough goods to go around at the high end, some fraction of those buyers get displaced to the next tier down. They keep their high-end incomes and ability to pay, though, and bid against each other so that the next tier of goods becomes almost as expensive.
Well over a year ago, I started checking KBB.com values to either trade it in or sell it. Back then, trade was close to $12k, and private party was a bit over $13k.
I've checked several times since then, and the price has basically grown and grown. As of today, it's showing $18k trade-in and $18.5k private party.
As little as I drive, I'm very tempted to sell. But at the same time, I could drive this car for the next 10 years easily. With remote work being a permanent fixture for me, I don't really need the car, but I'm still a bit emotionally attached to it. But am I more emotionally attached than I would be to $18,000?
I am curious, though, how well KBB aligns with real world transactions and what dealers are willing to pay. (It's always been a hassle negotiating dealers to give you anywhere close to KBB trade-in values.)
(Though I have an irrational desire to eventually get a truck to help with my chores around the property. But no rush on that.)
We decided to actually get rid of it last weekend and KBB said $6500-$7500 for trade-in. There were some cosmetic issues with it so figured we'd be on the low end. Not wanting to deal with posting it to craigslist and coordinate visits, we asked if the dealership would purchase it. They offered us $6k so reasonably close.
If you're in a dry climate, it'll last a very long time as long as you keep up on maintenance.
I have a 2018 Mazda3T Sedan with really low miles (thanks COVID) and they're offering me more than the MSRP when I bought it three years ago.
This is key, otherwise you should save your time, private sales are the way to go in the current market for higher milage vehicles
So yes it’s nuts.
Normally that would be a poor investment because same-car prices steadily trend downward. But if the market changed such that used car prices were increasing - say, due to a shortage of new car availability - then would some investors be inclined to start hoarding used cars?
Hoarding used cars for a slightly long time will have them deteriorate somewhat. Some will have small issues, some might have bigger. Theoretical value might be higher, but when selling time comes the practical value might be a disappointment. Getting them ready for sale will have costs.
Car dealers just go for fast profit, like they always did.
I was considering getting a new or used pickup in the next year or so, but one of those babies would serve me even better.
I'm not super sure about the used market but these vans have been very in demand for things like camper conversion.
Yeah, you can potentially lose little to none in depreciation (or gain in some situations) selling your car currently. If you have another car or just don't need one, can be quite nice to get great value + reduce your insurance/gas etc. But if you will need another car again in 12 months I think it's a bit unclear whether it's worth it & where the market will be (granted - i'm no market analyst). If it's no issue to wait 24+ months I definitely think it's an amazing time to sell cars that get little use.
Plenty of used cars at normal prices and if you want a new car you can buy a Tesla and get it next month.
That's 15k to 20k for a car that is 11 years old at it's youngest and mileage under 150k is considered "low mileage"
How long can that bubble last? Is it the same globally?
I wonder if the US tax incentives/spending policy this year are increasing demand at the same time supply is short?
When the drivetrain cost drops well under ICE (pre-inflation, which should happen with Tesla in about a year depending on 4680 production) and charging takes off, ICEs will look completely noncompetitive.
If solid state batteries become feasible and/or LFP hits the magic density number of around 200-250 wh/kg? Look out. The bottom is going to fall out.
I'm guessing its subpar battery range doesn't do wonders for values.
In USA, it is common to have hundreds, if not thousands via floor financing - too bad for FIAT. If they could've held on they probably would be having a good year.
I've seen the trend of cheaper to buy a new car then a used one for 1-3yr old models for a while but now it has fully encompassed the whole market it's bizarre. 10yr old cars selling for 50% still. With high usage, 100k+ on odometer in miles.
I'm still confused if it's a sign of inflation/weak money or just true demand.
Where are all these cars going?
https://www.bls.gov/cpi/factsheets/used-cars-and-trucks.htm
There are different CPIs and debate over accuracy.
Why does everyone suddenly need a car? Cheap credit is definitely at least in part fueling it.
It's probably like with any other market - low end is super volatile, higher end much less so.
It's 2.5 years but I only need it a year. They suggested I bring it back in then and they'd likely buy it back off me if things don't improve.
I’m sure this isn’t the full explanation, but the IRS is so messed up this year that this is tax refund season. I didn’t get my refund until a month ago, and my accountant says many others have waited this long.
It all makes sense when you realize that luxury car brand economics apply to pretty much every Toyota (other than arguably whatever their most subcompact hatch offering of the year is) because that's who their buyer demographics are.
And of course that's exactly what happened.
tangentially; I have always seen the premium for a nice car to be a really low value at normal income levels.
I bought a fairly well used 2006 Honda in Jan of 2020 for $5k. After denting the rear fender badly and putting 20k miles on it, it’s worth $7-8k.
A vehicle like that has never appreciated like that. Cash for Clunkers had an impact on availability of $1000 beaters, but nothing like what we’re seeing now.
It's more important to simply just have a car, than it is to have a car for a very specific price.
It's the same reason why people would pay $12 at an airport for what they could get in bulk for $0.50
That is, not in servicing loan payments, but actually buying cars.
Inflation is weighted for this reason.
The average family isn’t but a whole new (used, but new to them) car every month. The percentage of people actually buying cars right now is a small fraction of the population. For everyone else, the price they bought their car was set when they bought it, and inflation has no affect on their loan payments.
Have fun with that everyone!
If you accept the thesis we're in a bubble that will deflate, soon cars will be worth even less than they were during the run-up, so the difference will go from positive to deeply negative in a hurry.
For many people a car is a productive asset. As in, they need it to do their jobs. Even if it's just to commute to work.
So 'overpaying' for a car now might still be the right thing to do, even if you know full well that it's gonna lose a lot of value in a year or less.
What would sink GDP more: one year of no new cars, or one year of no new phones? Which would have the greater domino effect on the economy?
Because auto manufacturers are such low margin, they can't buy chips reserved by monopoly businesses. But what happens when people can't afford a new phone because they can't get to work?