Used Cars Prices Falling…. Finally

Overall I consider this great news. Now just to time it with an interest rate drop before prices go back the other way.


https://www.forbes.com/sites/jonathanponciano/2023/01/09/used-car-prices-post-biggest-drop-on-record-and-have-much-further-to-fall/

 

I hope that’s true but not seeing how? Any Toyota hybrid or popular model has a 6-9 month wait at dealers near me. Used are selling at near new prices only because they are available. Toyota at least is nowhere near able to keep up with demand. I know you can get RAMs if that’s what you want. Anything popular is unobtanium.

 

Gonna be rough in 12 months when people are $30k underwater.

 

It’s regional. In SW Florida a lot of lots that were empty are full again. Also more people are behind on car payments since 2009. We’ve been in a recession, it’s about to get real this year. Tech is already laying off like crazy. Cars are getting repo’d at high rates. Interest rates are insane, price will have to come down or the industry will stagnate.

 

Absolutely. It’s going to get bad. Those with “recession proof” jobs will be in a good position if they are in the market.

 

it's the "perfect storm"

https://www.zerohedge.com/economics...ford-their-car-payments-during-peak-financial

 

One of my favorite web sites right there! Totally agree... the perfect financial storm is coming! Everyone ready?!

 

I’m in the market for a used Toyota. Camry, Avalon, anything i4 or V6 non turbo and non hybrid.
When would be an ideal time to snag something up? I do have access to Mannheim and one other auction locally but I’d rather not use those connections unless absolutely necessary.

 

Indeed. I did a thesis paper in 2011, I think it was, based on the factors/causes leading to the 2008 crash/bailouts. So many lessons we 'learned' in 2008....that we promptly forgot not even 15 years later.

 

No one knows the future, but the economic indicators are showing that there is a significant downturn expected in the economy. No one knows how bad; however, there are more than the usual number of doomsday folks out there now. If it were me and I needed a car, I'd wait until prices dropped to a point where you can pay cash for a vehicle and not incur anymore debt.

 

Covid really did a number on our country.

And all the money the government (both Parties and Presidents) printed and handed out in the name of "Covid relief" is a big reason why inflation took off. And a big reason why everybody (including companies) took that free money and spent like crazy, helping to create shortages....and thus further fueling inflation.

Ideally, when the next pandemic comes, the government should mostly keep the checkbook closed.

High interest rates should bring the auto world back to some state of sanity.

On a related note, are all the manufacturers rushing to build and sell electric vehicles because of actual consumer demand? Are they chasing another industry fad?? Or are they just doing what the governments of the world are telling them to do??? With obvious practicality issues and high purchasing costs, I don't see EV's flying off the shelf.

(Personally I don't know anyone who drives an EV, or even anyone wanting to drive one...)

ToolCat

 

Obviously what I say is anecdotal...but I think it's the latter two (chasing a fad + doing what the gov't says). I know more than a few who drive hybrids, and I think *hybrids* are a great idea, for many reasons...but EVs are another matter completely.

It's 15 degrees outside now; and I've watched multiple people pull trailers and the like with hay, horses, livestock, etc. That's pretty much the WORST use case for an EV. Granted, that's not what they're being made for...but there's a difference between what they're made for and what pro-EV fanboys seem to think. I know a few who have adamantly argued a farm is the BEST use case for an EV.

 

I tend to agree with you both on this, feels like a fad + gov't funded push for EV. Celebrities are being paid "pushed" to advertise these like crazy, during the Bengals / Chiefs game last night I saw Kevin Bacon advertising for a new Hyundai EV. I hope the market direction "recalibrates" itself soon. EV has its benefits for certain crowds, but not completely practical for most applications.

 

EV trucks can't do truck things
EV cars are great for city folk.
and

Don't race my wife and expect to win, regardless of what you are driving.

and
car pricing/inventory is about to do some very weird things.
the Gov will step in in ways I can't imagine...to help.

 

Reminds me of what Ronald Reagan said the 9 most terrifying words in the English language were. "I"m from the government and I'm here to help." LOL

 

I have a sister living in the Bay area that bought a Tesla. She charges it for free where she works and lives close enough that she doesn't need to top off at home. Then Covid hit and she works remote. The Tesla takes up space in the garage and their Tundra resides outside in the driveway.

 

I think you hit the nail right on the head when you stated "government funded push."

If they got their way and we had nothing but EVs, where is all the power going to come from to charge them? The power infrastructure we currently have (or for the next 40 years) can't supply the required power for charging, yet alone closure of energy generation. Forget about the environment issues when considering the destruction of the environment to mine the rare earth. There's an agenda going on there folks... perhaps more control.

Okay, time to take off the tin foil hat for the day!


Are we hijacking this thread?

 

Up until recently our electric company was offering incentives to by energy efficient appliances and LED bulbs. Why? To reduce the load on the already taxed grid and make way for the closing of coal fired powerplants.

 

Column shifters are phasing out for a reason. There is likely a programmable agenda for those push-button, electric shifters: R, N, D.


... Had a foil hat flair up, lol!

 

Rob us blind and make your money but eventually you have to pay for it. Dealers are holding on to the “supply” issue narrative as long as possible because it’s profitable.

Eventually they have to wake up and realize it’s over. They took advantage of consumers and really deserve what’s coming. It’s kind of like stocks in that yea you get a big run up and make a lot of money but a huge downturn is also most certain to follow.

The market has to come back into a reasonable balance. It has started the last few months but the next few should be very interesting. Income tax season will be a small breath for them that could delay it a little bit.

Tesla just drastically cut new prices.

The major catalyst is Carvana filing for bankruptcy, if it comes.

I feel the worst for people who bought in the last year or so and who are going upside now because they overpaid. As with any market unfortunately you have to have that final wave of suckers who really get screwed.

 

Imagine the connection it takes to run the Mega chargers for the Tesla semi's....

 

this...all the folks that are upside down is staggering.

 

Imagine you bought a brand new Tesla 3 weeks ago. Then two days later Elon drops prices 10-15k. You paid full price for the car and lost $10k or more in equity overnight. Brutal. You are and your bank are now far upside down on a brand new car.

I saw used Teslas prices cut by the same amount. The dealers who took them in as trade are now upside down as well.

The real slap in the face comes over the next 18 months when these people go to trade in because they need out. The dealer/bank won’t absorb the negative equity into a new loan. It just compounds the problem. The owner doesn’t have several thousand in cash to buy them out of the hole. They will be turned away and told they are stuck with the car until the repo man shows up. It really is sad as some of these dealers took advantage of people knowing they were setting them up for this.

You sell cars long enough you know the upturn doesn’t last forever yet you still sell to your customers like prices will never come back down and they are getting a great deal. Pathetic

 

Indeed. Back to the topic. It will be nice to see things hopefully regulate and get back to normal within the vehicle markets. That and other markets as well.

 

Tesla, IMHO, merely marked to market.

all of the other cars are about to suffer the same fate.

EX:
https://www.autospies.com/news/index.aspx?submissionid=114171

 

I mean to Elons credit, if huge price slashes are needed, I would at least want to be first to do it. He is smart enough to know little benefit in holding out like others will. He might also care about the "little man" a little more.

 

Yeah man, I chose to fly for an low cost carrier for job security during economic downturns. When other majors start sending people home with furloughs, usually the low cost carriers guys keep their jobs and paychecks coming.

 

I can confirm the used market is soft as hell right now, for better or worse!

 

I think this is the new normal. Inflation and new truck prices brought used prices up and they won’t go back down. Everything used is going to be priced off what a new truck cost, not what the used truck sold for when it was new. Interest rates going down isn’t going to lower prices either.