Axios- Used car market gets even more bizarre

GON

GON

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The latest: The industry’s key index of used vehicle prices jumped another 9.2% over the span of just a month. That puts the index 38% higher than a year ago — compared to “just” 27% for the same stat in September.



Maybe BITOG members sold their vehicles to Carvana, CarMax, Vroom to soon......????

Unbelievable, what does the "market" know that I obviously don't know. Maybe inflation is coming big and hard and everything is going to rise in price.


https://www.axios.com/used-car-market-prices-dbea46f6-f8b3-42fe-b972-ece6c0f96de1.html
 
I'm just hoping things contract back to "normal" in 3-5 yrs. I'm hoping to replace my Cmax with a used/ off-lease Maverick Hybrid in the >60k mi / $10k range.
 
Everyone is crazy and is buying everything. Every month has been a record breaking sales month at the dealer I work at in every department. I don't mind the paychecks, but I am so tired of being on the phone all the time.

Everything on Facebook Marketplace and Craigslist is junk. I can't believe I got my 94 Explorer for $2500 in July. The availability was bad then, but everything on there now is broken or trashed.
 
I bought a 2019 VW Jetta SE stickered for right at 23k for 18,800. Has 26k miles on it now and Cravana offered 22,400 today. Crazy times.
 
I’ve debated selling our Grand Caravan, “giving” the truck to my wife and finding a cheap-ish TDI to drive to and from work…. Cheap-ish gets you a beater with a heater (and that’s iffy) though it seems.
 
Wrenchturner44 said:
Gon, Look at some of the lease assumption prices on this site if you really want to make your head spin.

https://www.leasetrader.com/
Click to expand...
WT,

Thanks for posting that site, never knew a market existed like that.

I am shocked to see how many people are paying 800+ a month for a vehicle lease. Saw a bunch over $1,000 a month, an some at $2,000 a month.

There is a world out there I am not tracking. I would cry with a $400 a month car payment. But our family only buys used cars.... and that strategy doesn't seem so good today.

If I had to buy a vehicle today--- it would be a basic NEW Honda or Toyota sedan. Get the lowest price one I could find. If one could be found.
 
01rangerxl said:
Everyone is crazy and is buying everything. Every month has been a record breaking sales month at the dealer I work at in every department. I don't mind the paychecks, but I am so tired of being on the phone all the time.

Everything on Facebook Marketplace and Craigslist is junk. I can't believe I got my 94 Explorer for $2500 in July. The availability was bad then, but everything on there now is broken or trashed.
Click to expand...
That’s the problem; there is money to found everywhere in the system but there is no value to be found or it’s simply out of wack

Just like you’ve said, there are junk cars out there not worthwhile ones consideration unless it’s overpriced yet people are buying it; some people are in need of cars and that’s OK

I work at a loan department at a local CU and I’ve seen them all; many buys these days include cars than been in accidents or just being overpriced; my 08Mazda6 with 251k miles would go easily $ 2500 maybe more perhaps but on the other hand I’d get simply a junk in the market these days; that’s why I don’t play in these markets
 
GON said:
Unbelievable, what does the "market" know that I obviously don't know. Maybe inflation is coming big and hard and everything is going to rise in price.
Click to expand...

I think it's a "Perfect Storm".

The bug, chips, and other shortages have decimated new vehicle production, driving up the prices to list and above. Pushes buyers into the used car market.

More people chasing fewer vehicles because of reduced trade-ins.

Then add a healthy amount of inflation on top of that. Significant inflation, IMO isn't coming, it's here. And will continue.

YMMV.
 
All I can only think of one other time in my life that I saw something similar to what is happening to today's car market.....only it was kind of the reverse of what is happening now.

In the mid 70's with the oil embargo, and gas shortages, you could not give away the big land yachts of the day. Everyone wanted to trade their big cars for smaller fuel efficient one. Big cars were on lots everywhere, both new and used. Prices for small cars skyrocketed. Honda Civics were selling at sticker price, the first time ever I heard of a dealer / manufacturer being able to do that.

GON, I am with you. I would be sweating bullets if I was paying some of those posted car payment prices....plus remember these are leases so they don't even own anything at the end....can you say "bend over"?
 
Wrenchturner44 said:
All I can only think of one other time in my life that I saw something similar to what is happening to today's car market.....only it was kind of the reverse of what is happening now.

In the mid 70's with the oil embargo, and gas shortages, you could not give away the big land yachts of the day. Everyone wanted to trade their big cars for smaller fuel efficient one. Big cars were on lots everywhere, both new and used. Prices for small cars skyrocketed. Honda Civics were selling at sticker price, the first time ever I heard of a dealer / manufacturer being able to do that.

GON, I am with you. I would be sweating bullets if I was paying some of those posted car payment prices....plus remember these are leases so they don't even own anything at the end....can you say "bend over"?
Click to expand...

Many times, people that lease do not care about owning anything at the end. They just want to drive a car for 3 years, and then get something different. So they are used to having a perpetual car payment. Buying makes sense for people that plan on keeping a car for several years.

Even if you look at something "common" like a Ford Explorer XLT. Current lease deal is $397/mo with $3700 down. The Ford finance deal is $575/mo, $3700 down, 1.9% for 60 months.

The person leasing pays $19,187 over the course of 39mo (monthly payments + down payment)

The person buying is paying $38,204 over the course of 60mo (monthly payments + down payment). At the end, they have something they own that might be worth $20-$22K. At that point in time they end up having spent $16.2K-$18.2K.

Both driver's spent about the same during the time they were financially obligated. The lessee is already 2 years in to their next lease by the time the traditional buyer is paying off their loan. If the buyer immediately trades, they probably should just lease. If the buyer keeps their vehicle until it implodes, they ultimately got the most for their money. The lessee is always driving a vehicle with a warranty, whereas the buyer subjects themselves to the prospect of expensive repairs as the car ages. It all works out in the end.
 
The current fiasco is definitely putting an end to my life long addiction to getting a different vehicle every 2-3yrs. There's no way I'd willingly jump into today's market unless I absolutely had to.

To me, what's almost worse is if you need work done to your used vehicle. Not only are shops understaffed, they're doing big high dollar jobs and quoting high on everything. Plus they're weeks out on appointments.
 
Last edited:
JTK said:
To me, what's almost worse is if you need work done to your used vehicle. Not only are shops understaffed, they're doing big high dollar jobs and quoting high on everything. Plus they're weeks out on appointments.
Click to expand...
Needed to get an alignment at the local Firestone. They were booked a week out. When did those places starting get so busy?!?!
 
I don't think much of this is quite as big a problem if you already own a car and therefore can sell it and kind of break even in this craziness. Kind of like real estate - you have your ridiculously overvalued home, and you're looking to buy a ridiculously overvalued home, BUT it's a wash when you sell and buy.

But if you're NOT in this predicament^^^?? Yeah, I wouldn't want to be buying a car, or a house right now.
 
Oh no! Prices are high and inventory is low - quick lets buy something!
This is the thought of so many consumers currently. Whether TP, meat, or vehicles. American consumers are not the best at planning for the long term, so it just drives the cycle to be even worse.
 
From a supply chain perspective, there is a massive amount of inflation working its way through. Most inflation to this point has been demand driven, but it's about to be cost driven. Raw materials continue to get harder to get and some are doubling in price every 1-2 months.
 
"Market analysts" are saying the automobile market won't normalize until mid-2023. We shall see. One thing is for sure: "Normal" will not be what normal used to mean in the before times.

Working in the IT industry, we have been given some crazy lead times for products. Anywhere from 6-8 months. However, some products for which we were told 6-8 months actually came through in only two, so there is a ton of uncertainty. We set client expectations, and then surprise them if products show up sooner than expected.
 
The Critic said:
Needed to get an alignment at the local Firestone. They were booked a week out. When did those places starting get so busy?!?!
Click to expand...

At least locally, this past spring, and it really hasn't let up.

Because of a fire that melted our internet and opened another dimension or something, I am now selling parts from our service drive which is just lovely. Every morning when I come in it's just packed with cars. Despite the entrance being packed with cars, people are baffled when the writers tell them it may be a couple hours if they want to wait on an oil change. It's pretty much like this daily.

The very reputable tire/alignment/suspension shop across the street is so packed there's never any room in their parking lot. If we have a car there and it's ready, they will bring it to us just to clear up their lot.

It's really the absolute craziest I have ever seen it and has been for months.
 
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