Fun & Arbitrage in Car markets, Round 2

Joined
Dec 17, 2011
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395
Location
Northern NJ
I posted my experience of being able to 'arbitrage' these car markets by selling my 1 year old 2020 Mustang GT. Purchased a bit below 32k, 7k off list in Sep. 2020. Sold to Vroom Nov '21 at 40k, simultaneously ordered a 2022, 2k cash in my pocket even after fees and largese to NJ in sales tax... My brother sold the 2018 Mazda 3 he bought new for 19k to Carvana for 23.5k. He didn't a full round trip arbitrage, as he replaced with a used E-golf.

We did one more nearly pure arbitrage yesterday. A few weeks back, Vroom bid 48.7k on my mom's 2021 Telluride.. she paid MSRP (47.6) in August 2020. Freshened up bids yesterday AM... Vroom down to 47.0. Carvana 46.x. A few bidders 45ish. Cargurus - $50.7k !!! Sold. They list cars like this into the mid 50s on car sellling websites. (used 1-2yr old Telluride, top trim SX AWDs)

Then the hard side - the replacement. The car market is broken in multiple ways, but one is that no manufacturers seem to restrict customer sold orders from appearing as inventory out there, and secondly, dealers almost never list cars with their 'market adjustment' so it genuinely appears that they are offering cars at MSRP. So it looks like there are plenty of Tellys out there but invariably they are customer sold and/or with a 5-10k markup that wasn't shown in the search. So for a number hours, I'm getting nowhere. We're pretty much resigned to an ordered car, and a local NJ dealer is MSRP with only $400 doc fee. Probably be a '23. Ok, I make one more call on the favorite color truck I see out there - 'Yes, customer car, it's gone. But I just got a cancellation, it's a Sangria red on Black SX AWD.' I almost said I'll decide in 5min and call back. I decide to confer with mom for 30 sec... "we'll take it'. He then tells me he sent out 30 emails on the availability of this truck right before I called in.

MSRP 46.9k. medium doc fee of about $600. Only thing it has the original didn't is the Nightfall package. Cash out of a few hundred bucks going from 20mo old and 22,500 miles to brand new. Going to VA for in on Thursday. Cargurus comes for the pickup a week from Saturday. Apparently cargurus isn't a direct buyer/seller like Vroom and Carvana. The purchase is by one of their affiliated dealers - we'll see if the mailed paperwork is in the name of the buying dealer direct. Fun !
 

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Do used car buyers just assume used cars are less and don't even bother to price out a new car? Even before all this craziness I never found a 2-3 year old car to be a good value to buy used, there just wasn't enough of a discount off new...but to pay more for a used car than a new one? :oops:
 
What do you think will happen if you sell your car to Vroom, get a check and before the check clears, they declare bankruptcy?
Vrooms stock, VRM is down 86% YTD as of this post.
 
I posted my experience of being able to 'arbitrage' these car markets by selling my 1 year old 2020 Mustang GT. Purchased a bit below 32k, 7k off list in Sep. 2020. Sold to Vroom Nov '21 at 40k, simultaneously ordered a 2022, 2k cash in my pocket even after fees and largese to NJ in sales tax... My brother sold the 2018 Mazda 3 he bought new for 19k to Carvana for 23.5k. He didn't a full round trip arbitrage, as he replaced with a used E-golf.

We did one more nearly pure arbitrage yesterday. A few weeks back, Vroom bid 48.7k on my mom's 2021 Telluride.. she paid MSRP (47.6) in August 2020. Freshened up bids yesterday AM... Vroom down to 47.0. Carvana 46.x. A few bidders 45ish. Cargurus - $50.7k !!! Sold. They list cars like this into the mid 50s on car sellling websites. (used 1-2yr old Telluride, top trim SX AWDs)

Then the hard side - the replacement. The car market is broken in multiple ways, but one is that no manufacturers seem to restrict customer sold orders from appearing as inventory out there, and secondly, dealers almost never list cars with their 'market adjustment' so it genuinely appears that they are offering cars at MSRP. So it looks like there are plenty of Tellys out there but invariably they are customer sold and/or with a 5-10k markup that wasn't shown in the search. So for a number hours, I'm getting nowhere. We're pretty much resigned to an ordered car, and a local NJ dealer is MSRP with only $400 doc fee. Probably be a '23. Ok, I make one more call on the favorite color truck I see out there - 'Yes, customer car, it's gone. But I just got a cancellation, it's a Sangria red on Black SX AWD.' I almost said I'll decide in 5min and call back. I decide to confer with mom for 30 sec... "we'll take it'. He then tells me he sent out 30 emails on the availability of this truck right before I called in.

MSRP 46.9k. medium doc fee of about $600. Only thing it has the original didn't is the Nightfall package. Cash out of a few hundred bucks going from 20mo old and 22,500 miles to brand new. Going to VA for in on Thursday. Cargurus comes for the pickup a week from Saturday. Apparently cargurus isn't a direct buyer/seller like Vroom and Carvana. The purchase is by one of their affiliated dealers - we'll see if the mailed paperwork is in the name of the buying dealer direct. Fun !
So basically you got very lucky on an replacement. And probably couldn't repeat the scenario.
 
Do used car buyers just assume used cars are less and don't even bother to price out a new car? Even before all this craziness I never found a 2-3 year old car to be a good value to buy used, there just wasn't enough of a discount off new...but to pay more for a used car than a new one? :oops:

Not enough new vehicles to support demand. I think Toyota said demand is there for selling 1 million more new cars this year than they can currently produce.
 
Yes, very fortunate on the replacement. Otherwise we would have waited 5-6mo for the ordered MSRP car from NJ dealer.
 
Yes, very fortunate on the replacement. Otherwise we would have waited 5-6mo for the ordered MSRP car from NJ dealer.

Yea-not everybody could sell a vehicle and wait months for a replacement. We couldn't at my house without major inconveniences.
 
The car market is nuts right now.
Because of it, I fix a lot more cars in the garage I run than I normally would.
I hope I can get a couple more years out of my beater G5 to let the market settle before I have to replace it.
 
More detail on best back up bidders to cargurus 50.7k:

Vroom 47.0
Carvana 46.7
KBB instant offer 46.7
 
Here's a few pictures from pickup Thursday and reading the old one for CarGurus/CarOffer Pickup this morning.

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67362258353--650BE87D-F1B8-489D-B8BE-51BC339C3A9A.jpg
 
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