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

[Michigangster]

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

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.

Very well said.

 

[eljefino]

Last I heard craigslist charges $5 for a car add so there's a lot less scammers on there.

But there are a lot of dealers who write in the same "dealer gibberish" I'm trying to talk OP out of.

"LOADED 2018 Mercury Retroencabulator CLEAN CARFAX SE HABLA ESPANOL CLEAN CLEAN CLEAN LOW LOW MILES AC AUTOMATIC ONE OWNER $2500 DOWN WE FINANCE EVERYBODY!!"

If I'm looking for a $4k car, I know I'm taking a gamble. I want that $4k to be spent on "all car", not $2k on a car and $2k on dealer markup, as I the customer perceive the situation to be.

OP should advertise like a "normie" then when the buyer comes over and looks, say, "Yeah, I work at a dealer, but I really like THIS car, and it's been my take-home car", make a personal connection. "You buy it from me and there'll be no paperwork fees, but if you want financing, come into the office, we can hook you up." OP should NOT present themselves as an expert, because the timid buyer will assume they're in the low-information seat of the deal.

 

[Brons2]

That is utterly insane.
From this example, I'd have to say that Ford's market decline is deserved, although GM and whatever the other major pickup seller is calling itself these days are probably no better.
What's going to happen when these trucks are ten to fifteen years old and are on their second or third owners?
I can guarantee that nobody will stop using a running truck.
Maybe run some direct wiring from the battery with a switch for the lights?
Practically irreparable required lighting should be taken as a violation of FMVSS and should therefore not be allowed on any street vehicle offered for sale.

Someone will probably sell some chinesium replacement on Amazon that's reasonable by that point.

Of course, if you have to program it, you still haven't really gotten away from the problem. We need Right to Repair. Software tools should be easily available for these things.

 

[fdcg27]

Someone will probably sell some chinesium replacement on Amazon that's reasonable by that point.

Of course, if you have to program it, you still haven't really gotten away from the problem. We need Right to Repair. Software tools should be easily available for these things.

I would imagine that the aftermarket will come up with workarounds.
Still, It is hard for me to wrap my head around so much complexity being applied to what should be a dirt simple part.
Bad enough when the industry began making lighting units as one piece with no replaceable lens.

 

[50yr Street Mech]

I miss the days of buying a roll of yellow or red lens repair tape. Now, with all these new fangled computerized tailights, a drop of water gets in, and you're in a hole for 5k !!!!!! I had a great system. A cracked red tailight lens with an incandescent bulb inside that lasted years, (you could even tell when it was going to burn out, it would turn black ). Clean the lens with some windex, cut the tape to size, and stick it on. Then, I would go over it with clear packing tape to keep it from peeling off. The whole job took 10 minutes, and $ 3 bucks in tape. Passed inspection every time,,,, and never got pulled over by a cop for a bad tail light.

 

[zzyzzx]

Software tools should be easily available for these things.

Forscan already exists. Too bad non-Fords mostly don't have an equivalent.

 

[duck__dodgers]

you're biggest competition is Uber, friend....unless you are in a very rural area.

All the mandatory costs (insurance, plates, etc) is pushing people out of the market. even if it is something small as <10%, that is enough to break down the old ecosystem that made money.

No good advice, except batten the hatches and be nimble.

"own nothing and be happy", bro

 

[fdcg27]

Having had recent experience with the OP, I can say that he is honest and straightforward to deal with.
That alone has enormous value in the cesspool that the used car market can be.
In team with Steve, I did find that the auction market at the moment is nothing like it used to be. There are few "deals" to be found. Things would have been easier if I hadn't decided on a rather obscure vehicle, a '14-'15 Mazda5.
Having said that, I did find the vehicle I was looking for locally and the little country used car place I bought it from was also perfectly straightforward and accommodating to deal with, to the extent of handing me the keys and telling me to meet them at the gas station next door after telling me to drive it as much as I liked so they could put $15.00 in it so that I could take a proper test drive, which I did.
Got them to go $800.00 under their asking, which was reasonable given the overall condition of the vehicle and given that nothing decent now is cheap.

 

[fdcg27]

you're biggest competition is Uber, friend....unless you are in a very rural area.

All the mandatory costs (insurance, plates, etc) is pushing people out of the market. even if it is something small as <10%, that is enough to break down the old ecosystem that made money.

No good advice, except batten the hatches and be nimble.

"own nothing and be happy", bro

If you can live with the incredible lack of convenience involved in relying upon the crapshoots that are Uber and Lyft for routine local travel as well as the need to get a rental whenever you want to go out of town, then I suppose that might work. I doubt it would save you any money, though, unless you have what you need within walking or biking distance and spend most of your days at home.
Car ownership is more a necessity than a luxury for most of us.

 

[duck__dodgers]

>>>Car ownership is more a necessity than a luxury for most of us.

not looking for a flame fight on July 4 eve over mobility economics of all things with someone who isn't in the loop about anti-WEF sarcasm, lol.....

yes, no S!!! having a car is a necessity. but for the bottom 15, 20%....getting robbed by BHPH, being unfamiliar with auto maintenance, DMV fees, $$$$ for even el-cheapo insurance, Uber is the lesser evil.

and once that market goes Uber, that pulls a chunk of aggregate demand and even affects used car dealers at the top of the food chain like Autonation or Carmax.

And if you're on a vacation, in a parking-unfriendly city, Uber-Lyft pays for itself in the time saved. I spent a whole week in Miami relying on Uber. and it was worth it. no counter time wasted, no $50/day parking, no walking 4000 feet from the parking lot to the stadium gates.

https://www.youtube.com/results?search_query=own+nothing+be+happy+wef

 

[fdcg27]

>>>Car ownership is more a necessity than a luxury for most of us.

not looking for a flame fight on July 4 eve over mobility economics of all things with someone who isn't in the loop about anti-WEF sarcasm, lol.....

yes, no S!!! having a car is a necessity. but for the bottom 15, 20%....getting robbed by BHPH, being unfamiliar with auto maintenance, DMV fees, $$$$ for even el-cheapo insurance, Uber is the lesser evil.

and once that market goes Uber, that pulls a chunk of aggregate demand and even affects used car dealers at the top of the food chain like Autonation or Carmax.

And if you're on a vacation, in a parking-unfriendly city, Uber-Lyft pays for itself in the time saved. I spent a whole week in Miami relying on Uber. and it was worth it. no counter time wasted, no $50/day parking, no walking 4000 feet from the parking lot to the stadium gates.

https://www.youtube.com/results?search_query=own+nothing+be+happy+wef

Well, since the bottom 15-20% probably can't even keep a credit card, Uber and Lyft are probably off the table for them.
While vacationing?
Heck yeah!
In most of Europe they have no parking in cities but they do have Bolt. Cheap, easy and quick.
When traveling outside the US, we rarely rent a car. More trouble than it's worth.

 

[HemiBenny]

New month, new price update. That same part is now $2477.82

Wow! A $313.00 price increase on their already absurdly overpriced part is unacceptable. They really should be ashamed of themselves. Some engineers and corporate types need a kick in the 's !
I only say that because they sure seem to enjoy doing it to the consumer.

 

[50yr Street Mech]

Bet that part is made out of the country and getting slammed with tariffs. Ford should eat the price increase, and manufacture it in USA.

 

[AdmiralYoda]

I didn't read all the responses but I've got some thoughts as I'm looking for a car to replace my wife's that just got totaled.

• Most people hate dealing with private party. Craigslist and FB are so full of scammers that I'd rather not even bother. You may be a dealer but your ads and pictures make it look like you are a private party flipping cars. Mostly the residential pictures in the background.
• Many people don't have $8,000+ cash to plop down on a used vehicle purchase. Most don't want to deal with a bank to try and get a loan and go back and forth between a private party and the bank to get a payment issued. So most people who need to borrow just figure they'll go to a dealership and get a loan

I'm searching on Carfax, Edmunds, autotrader, etc. looking for a 2017+ GMC Acadia right now. I list by price, filter on mileage....and scroll right past the pictures of ones that look like somebody took in their backyard. I don't want to deal with private party. The point is...even if it was a dealer I'm not even clicking.

 

[50yr Street Mech]

I purchased only 2 new vehicles in my life from a dealer. Never again. By the time you're done with taxes, title, tags, registration, inspection,, etc,,,,,you're in a hole for another couple grand, easy. Went back to private sales, saved all that $$$ on the nonsense, and lowered the bill of sale to skimp on taxes. Yes, if you're not mechanically inclined, and don't know what you're looking at, you have no choice in the matter but to use a dealer and get some kind of warranty. BUT, that's why a purchaser would usually bring along a " mechanic" with them to go over the car. I've done it hundreds of times. I've green lighted and red lighted cars for family and friends. But, I understand that a lot of people don't have access to a " mechanic"....and they are at the mercy of the dealer.

 

[willbur]

Year, Make, Model, Miles, Price in the title. Maybe a descriptive word or two. Buyers can see that it's white, silver, etc. You say Carfax on request then include it in the ad, unnecessary sentence. Not sure if promoting your automotive writing adds or detracts from selling a low priced used car? Most just aren't going to be interested. Maybe use text hyperlinks instead of the 100 character links? Also a dealer taking photos on a random residential street might raise flags for some people. The infamous car flipper Atikovi was given much grief for it. A photo of a clean engine bay will mean something to some, little to others. Maybe find someplace with a less busy background? End of a parking lot with trees for background? Details don't matter much when times are good but when sales are hard everything matters. Being a dealer could you include an inexpensive 1 year warranty as a hook? No idea what the cost would be. Best of luck finding something that works.

Is Atikovi still around? Interesting and entertaining guy

 

[tbm5690]

Is Atikovi still around? Interesting and entertaining guy

Last login was August of last year.