The used car market is tough. I need to change my approach.

[69GTX]

I think many retail markets including used cars, homes, collectibles, etc. will get much tougher through 2028-2033.
The great inflationary market of 1955-2033 is winding down. Lots of markets have to shrink. The old "norms" may not work like they used to. There may not be enough room for all the "dealers" to participate. I recall the 1990-1996 and 1974-1982 down turns where it
became very difficult to sell "things." I knew a lot of dealers that had to fold up and go to work for larger dealers until the storm ended. Many others just changed careers. I'm not surprised times are getting rough in the car business after all the easy money that was generally available from 2003-2008....and then again from 2013-2024.

 

[50yr Street Mech]

Hmmm...I figured withe the insanely high cost of new cars, used cars, ( pre-owned or whatever), would be booming now. I figured wrong, obviously. Don't sell anything from the big three. All junk. Try to sell as many Honda's / Acura's / Toyota's / Lexus as you can get your hands on. Most people know they are quite reliable, and come with ample amount of bells and whistles.

 

[rstcso]

You're probably aware of Brandon, "We sell cars for $5000 and under." This video he posted yesterday sums up what you're seeing.

 

[dnewton3]

They limit the number of characters I can use on the titles but I'm going to start with the models first. Good idea.

Along the lines of improving your advertisement, I do agree that I want to see the year and model in the ad. So when it comes to the characters in the ad, learn to maximize the info from limited characters. Don't worry about the "make" of the car; most folks know that a Camry is a Toyota, a Taurus is a Ford, a Ram is a Dodge, etc.

Example ...
What you wrote:
"One Owner - Perfect Carfax History - Only 66,000 miles" (54 characters including spaces)

How you can cut that down:
"1 owner, Carfax , 66k miles" (27 characters including spaces. Also, you could eliminate the emoji, and abbreviate miles to mi.)


See the difference?
Character count cut in half, and yet the same info is communicated. You have doubled the available space for more info like model and year. You would now easily have enough room to add "2012 Focus" (or whatever it is), and even more.

 

[SC Maintenance]

Hmmm...I figured withe the insanely high cost of new cars, used cars, ( pre-owned or whatever), would be booming now. I figured wrong, obviously. Don't sell anything from the big three. All junk. Try to sell as many Honda's / Acura's / Toyota's / Lexus as you can get your hands on. Most people know they are quite reliable, and come with ample amount of bells and whistles.

For lots of people its easier to come up with $600 a month instead of $5000 all at once. Its how they manage to stay poor.

 

[rstcso]

Don't worry about the "make" of the car; most folks know that a Camry is a Toyota, a Taurus is a Ford, a Ram is a Dodge, etc.

I wish I had the same level of confidence as you when it comes to the general population, but IMHO, I highly doubt most folks know squat when it comes to cars.

 

[rstcso]

For lots of people its easier to come up with $600 a month instead of $5000 all at once. Its how they manage to stay poor.

Unfortunately, the percentage of people who can afford $600/month is incredibly low right now. $600 can be life-changing for some families. I wish this wasn't true.

 

[HemiBenny]

Uncle Tony (Uncle Tony's Garage) is right; the 3rd-tier buyer is being phased out with these newer cars. By the time the second owner buys it as a certified or low-mileage pre-owned car, they tend to drive it until it's one failed component away from a MAJOR expense. (To diagnose it and repair it, if the parts are available. And, if anyone can diagnose it correctly after so many attempts!)
Almost gone are the days of a young couple, or someone "who's up against it", buying a cheap car that's easily fixed up and kept running. The simple, higher-mileage cars that are still somewhat reliable are quickly aging out.
Cars have become too complicated and expensive to repair for the average person. It also makes it harder for small independent dealers to pay the outrageous prices for them, and then still have to recondition the car. The big dealerships snatch up the front-line ready cars because they have deep pockets. I've seen them pay way more than extra-clean wholesale, well into retail prices for cars at auction!

 

[skyactiv]

I have been a car dealer since 2003. To be brutally blunt, this market has been one of the most challenging I have ever experienced.

Even worse than the last recession.

There have been a variety of factors. Facebook is now charging for ads while providing less reach. Craigslist seems to have lower volume too.

Most wholesale auctions are now hyper competitive because the lack of vehicles from 2021 thru 2023 are pushing everything up except for unpopular models and EVs. When I buy those, they sit.

The retail side of the used car business is consolidating, and the long-term reliability of cars is getting worse. My list of cars I won't buy is longer than it has ever been.

I feel like I'm hitting all the cylinders when it comes to the quality of my vehicles. Even though it takes me more than twice as much time to find those outstanding buys, the value proposition is still exactly where I like it to be.

The market is just dead... and bleeding out.

Usually I do a pretty good job of hitting the sweet spot when it comes to a vehicle's price, the ownership history, and overall market demand. I also advertise in four different markets on Craigslist (Atlanta, Augusta, Birmingham, and Chattanooga) and have about 4,000 followers on Facebook along with nearly 500,000 members at Mileage Impossible.

There is a missing ingredient somewhere. Maybe my model mix is wrong. Maybe my online presentation needs a different approach. Fewer words. More videos. It's like I built a baseball team filled with excellent players, but now attendance is down and the usual media marketing isn't working.

I'm looking for a discussion of ideas. What works in your market. What I may want to try with mine. This is what I have online right now. Feel free to brainstorm ideas.

What do you mean by the retail side of the used car business is consolidating? Conglomerates like AutoNation, Carvana, Carmax and dealer groups that own lots of new car dealers like Sonic, Hendrick, Lithia..?

 

[macarose]

What do you mean by the retail side of the used car business is consolidating? Conglomerates like AutoNation, Carvana, Carmax and dealer groups that own lots of new car dealers like Sonic, Hendrick, Lithia..?

Yes. The big retailers are getting more dominant.

 

[BigCahuna]

This post has alot of truths to it. Just the other day my wife and I were out for a ride. I've been telling her I'd like to get a pick up and ditch the Equinox while it's still in good shape. We stopped at a used car lot with several out there. There was no years listed, no price listed, no info at all anywhere on the trucks. my wife said she noticed they have been on the lot for a while. I guess they can't be bothered printing up sheet telling a prospective buyer,anything about what their trying to sell. Wouldn't you think a used car dealer would be doing/using every trick in the book to move some metal?.,,

 

[terry274]

I would stop the ALL CAPS in the title. It SCREAMS dealer. I know you are a dealer, but the all caps is a deterrent for some people to click your posting.

 

[rstcso]

This post has alot of truths to it. Just the other day my wife and I were out for a ride. I've been telling her I'd like to get a pick up and ditch the Equinox while it's still in good shape. We stopped at a used car lot with several out there. There was no years listed, no price listed, no info at all anywhere on the trucks. my wife said she noticed they have been on the lot for a while. I guess they can't be bothered printing up sheet telling a prospective buyer,anything about what their trying to sell. Wouldn't you think a used car dealer would be doing/using every trick in the book to move some metal?.,,

Some are not willing to put anything in writing and let the salesperson make it up as they go. To my knowledge, there's no law on used cars having to disclose anything on vehicles, unlike new cars.

 

[thastinger]

Do the cars you're selling meet the demographic of the local population?
Cheaper vehicles like those you posted used to fly off the shelves but only around the time that school and college started back up.

 

[Hohn]

Uncle Tony (Uncle Tony's Garage) is right; the 3rd-tier buyer is being phased out with these newer cars. By the time the second owner buys it as a certified or low-mileage pre-owned car, they tend to drive it until it's one failed component away from a MAJOR expense. (To diagnose it and repair it, if the parts are available. And, if anyone can diagnose it correctly after so many attempts!)
Almost gone are the days of a young couple, or someone "who's up against it", buying a cheap car that's easily fixed up and kept running. The simple, higher-mileage cars that are still somewhat reliable are quickly aging out.
Cars have become too complicated and expensive to repair for the average person. It also makes it harder for small independent dealers to pay the outrageous prices for them, and then still have to recondition the car. The big dealerships snatch up the front-line ready cars because they have deep pockets. I've seen them pay way more than extra-clean wholesale, well into retail prices for cars at auction!

I love UTG. I think he's bang on.

To the OP, this is a huge question deserving of a very thick book to explore it. But since I'm not an author and can't write that book, I'll try to distill what I'm seeing:

1) The pressure for profitability at large automakers has caused them to push leases and financing. You and I think the the market is about the cars. But for the OEMs, the cars are only made so that they can sell leases and loans. In other words, they are in the business of manufacturing collateral. We know this is the case because dealers always want to know whether you intend to finance or not, so they don't give you too good of a price without the compensatory finance profit.

From here

...the general market in 2021 saw 9% of buyers paying cash, 20% leasing, and 70% taking out a loan...

Old data, but is the car market meaningfully different now? 90% of all new car sales are leases and financing.

2) Building a quality car has a poor ROI. In other words, engineered obsolescence is still a thing.

3) The government is aiding and abetting the OEMs by always adding new mandates that a simply built, affordable car can never meet. It's quite possible to make a supremely affordable basic vehicle. But it's not legal to sell in the USA. Do you as a consumer want a simple, no-frills vehicle? It's not just that the OEMs don't want to make one. It's that it's ILLEGAL for them to try to sell you one. Cash for Clunkers was a disaster, and any economist who believes it's somehow a net benefit to turn a perfectly good machine into one that doesn't work needs to go back to middle school and learn what the word "economy" means.

4) Carmakers are prioritizing short term over long term. OEMs are squeezing out smaller dealerships that spent decades building relationships and have sold cars to 2 or 3 generations. No, the OEMs would much rather give a vehicle to a Lithia type of mega-chain that's all about VOLUME VOLUME VOLUME. Just sell. The small dealers can't compete with large ones, and the large ones make more money for the OEMs.

Most egregious was the OEM response to COVID. When the supply shortage drive up prices on dealer lots, greedy dealerships made hay while the covid sun was shining. The OEMs resented all that profit going to dealers instead of themselves, so they got in on the act and cranked up prices to the dealerships. (FORD was especially bad about this). In a market where just-in-time delivery is the norm, this kind of disruption takes forever to clear.

Think of it this way-- how bad is the pileup on the interstate when there are cars bumper to bumper at 90mph vs having lots of space between vehicles at slower speeds? The car market during COVID was basically a 50 car pileup from going bumper to bumper much too fast. And it's fun and exciting until someone gets cut off and the ripple takes a LONG time to dissipate.

I don't think the car market will heal from Covid until closer to 2028.

~~~~~~~~


Personally, I intend to buy only used cars and only ones that have been in production for several years essentially unchanged. Buying older and well-used means I get the chance to see exactly what issue particular vehicles have (and they all have something) and figure out what shortcomings I can manage and live with.

On my old ram, it was VP44 injection pumps and lift pumps as the known problem. On my van, it turned out to be PCV and VCM issues. On my IS250 it was GDI carboning. On my GX460, it's cooling system problems and sometimes transmission failure. On my Accord, it's fuel dilution and head gasket problems.

Forewarned is forearmed.

 

[Nukeman7]

Here is my take for what it is worth. Looking at your Craigslist postings, I feel that too much of your ads are focused on your bio and dealership instead of the vehicles themselves. The disclosure of extensive service history records and low annual mileage of certain vehicles will only appeal to a limited demographic (e.g., stereotypical BITOG members, gear heads, and mostly male buyers). I would focus on the more generic selling points like: rust free, great heat and A/C, reliable powertrain, good mpg, leak-free, etc., that the non-mechanically inclined customer would understand.

Also, the buying public is inherently leery of used car salespeople, whether deserved or not. As such, you should de-emphasize your dealer background and clearly disclose an OTD price, even if you have to bake-in any current fees.

 

[Owen Lucas]

My list of cars I won't buy is longer than it has ever been.

I'm curious, what are the top 3 that you won't buy?

 

[Capt W]

I think a lot of this market talk is highly sensationalized (often to garner You Tube clicks) and people tend to repeat the gloom and doom assessments ad nauseam. For individual buyers, there are plenty of good cars out there for decent money. In many cases, the so-called crummy economy offers an opportunity for cash buyers, as sellers in need of cash are often desperate to unload.

Most people on a budget do not understand the difference between a quality used car and a junker. They just want a cheap car for $500 and when it blows up they buy another.

This is absolutely a key point. People should educate themselves on rock-solid used cars instead of simply looking for "cheap." Such cars may not be sexy, but with care will be stone-cold reliable. For example, a 20-year-old Buick with the 3800 V-6 will tend to go on and on and on. Ditto for a Ford Taurus/Mercury Sable with the 3.0L Vulcan V-6. Compare these to almost any Hyundai/Kia, which are basically Bic lighters on wheels.

Buyers must also be willing to look outside their respective areas to nab bargains. A one-way plane ride and three-day drive home can be well worth the time and effort.

 

[Ranger83]

You have a web page and FaceBook profile? Your name is common on FaceBook, don’t find a MarkeyPlace profile.

FWIW recently listed my 2006 Sprinter on FB and CL. Got 27 total inquiries on FaceBook and multiple offers and visits. Sold in two days.

Craigslist, only got three inquiries, all three by phone, none well qualified. One was the typical “I’ll give you half price, right now” low baller.

In Massachusetts dealer sales have different requirements and if you sell more than four cars a year, you’re a dealer. Tons of people are selling 10 or more cars a year but say they are not dealers, trying to avoid their responsibilities.

Telling the story about you and your approach might be worthwhile. Guys like Doug Demuro (5 million YouTube subscribers), VINWiki (2.1 million), “Chevy Dude” (500,000) and “Car Wizard” (1.2 million) have generated huge followings.

 

[ecotourist]

When buying an out of warranty used car the main concern is getting stuck with a clunker, something with hidden defects that make it unreliable, useless and essentially worthless.

When I bought my first real car (a 3 year old '65 Comet for about $1200) the dealer offered a xx days 50/50 warranty. If there was something wrong with the car during that period they would fix it and I got to pay only half of the (presumably full retail) bill. That was at least some comfort.

It was a good car initially and there was nothing to repair. And that's all any buyer can hope for.

If you're selling good used cars, a 50/50 warranty would give customers some confidence that they are in fact "good used cars". And if there is a defect you don't know about, it'll cost both of you a bit - which is only fair. No one is going to harass you over imaginary defects when there is a significant cost attached.