used car price so high
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Originally Posted By: ram_man
So in a bloated market how do you guys decide what to pay for a car. Since kbb seems to be consistently pretty low.
Actually, it's not a bloated market. The demand for used cars exceeds the supply, so it's a seller's market. The seller's can pick and choose who they want to sell their car to, which for the most part is whoever will pay the most.
Anyhow, it's tough to say what the right price is for a used car because it varies from car to car and buyer to buyer. Basically once you find a car that you want you need to research other cars in your area that are similar, if not identical, and compare mileage, condition, price, etc.
Actually, the very first thing you need to do is decide on one or two models of car, and choose wisely, and study them until you know everything about them. The pros, the cons, whys and wherefores, and the going rate for them. I think it's critical that you be more concerned with buying the right model of car first and then concentrate on price.
A mistake many people make is buying whatever strikes their fancy whenever they need a car. It's best to pick a model of car and stick with it. Although, with a wife and all, it's easier said than done. Luckily my wife knows I'm right…about cars.
I've been buying full-size Fords for about 15 years now. Crown Vic, Grand Marquis and Town Cars, a.k.a. Panthers. I know the market for them, I know the strengths and weaknesses from year to year, there are still a ton of them out there (and they're plentiful in junkyards), I can go to most any real parts store and get parts easily for them, I do all my own work on them so I know them inside out and if I get stumped there are a few, very active forums dedicated to Panthers with many enthusiast members where I can get answers. Insurance is cheap and they’ll drive away from most accidents. I could go on, but you get the idea.
There are still some bargains on older Crown Vics that are being retired out of police departments. They'll typically have 100,000 miles on them, but that's just getting broke in for a Panther. Cab companies buy most of the old police cars, at 100,000 miles and put another 200,000 on them, routinely. They could pick any car on the road for a cab, but they pick Panthers for a reason. They just don't breakdown and even if you tried, it's tough to kill them through normal usage.
Now, the gas mileage isn't great, but it isn't awful either. I get 25 mpg on the highway in the Town Car, where it racks up 80% of it’s miles.
I’ve been fortunate enough to buy them at 30,000 to 50,000 miles and three or four years old, although, that is pretty much coming to an end because Ford hasn’t made them for a few years now. Except for the old police cars, most of them have been owned by someone in their 60s or 70s and are fairly low mileage, and prices are usually fair because who wants to be seen in old fogey car ? I don’t give a hoot, because for me, there probably isn’t a car with a cheaper overall cost of ownership than a Panther. And performance is pretty darn good. With a few simple and relatively inexpensive mods they’re a lot of fun on the twisty back roads and the highway.
So, that's the key for me with buying a used car. You want something that is rock solid reliable, that you can drive for years at minimal overall cost and that you know well. Now, maybe a Panther isn’t right for you, but there are other older cars that are similar to the Panthers in terms of durability. Buick LeSabres from the '90s to early-'00s, were a rock solid car and there are still some out there. S-10s from the mid-'90's to about '04 are great vehicles, and again, they’re still plentiful.
If you buy the right kind of vehicle (see above) you can overpay a bit and still come out way ahead in the long run, and that's what counts.
Oh, and don’t be bashful about getting creative in your search. Talk to the used car manager at the new car dealers and tell them what car you’re interested in buying and ask them to call you when one comes in and they’re not going to keep it. You can get a good deal that way. If you’re a church goer ask around at your church, see if you can put a note on the bulletin board or an ad in their Sunday circular. Put up notes in the grocery stores, auto parts stores, etc. If someone is thinking about trading in their car for a new one people will often ask their mechanic whether the new one they’re considering is any good, or will their get their old one checked out. So ask around at repair shops. Leave no stone unturned. You’ll be surprised how many people will help you if you just ask them to.
So in a bloated market how do you guys decide what to pay for a car. Since kbb seems to be consistently pretty low.
Actually, it's not a bloated market. The demand for used cars exceeds the supply, so it's a seller's market. The seller's can pick and choose who they want to sell their car to, which for the most part is whoever will pay the most.
Anyhow, it's tough to say what the right price is for a used car because it varies from car to car and buyer to buyer. Basically once you find a car that you want you need to research other cars in your area that are similar, if not identical, and compare mileage, condition, price, etc.
Actually, the very first thing you need to do is decide on one or two models of car, and choose wisely, and study them until you know everything about them. The pros, the cons, whys and wherefores, and the going rate for them. I think it's critical that you be more concerned with buying the right model of car first and then concentrate on price.
A mistake many people make is buying whatever strikes their fancy whenever they need a car. It's best to pick a model of car and stick with it. Although, with a wife and all, it's easier said than done. Luckily my wife knows I'm right…about cars.
I've been buying full-size Fords for about 15 years now. Crown Vic, Grand Marquis and Town Cars, a.k.a. Panthers. I know the market for them, I know the strengths and weaknesses from year to year, there are still a ton of them out there (and they're plentiful in junkyards), I can go to most any real parts store and get parts easily for them, I do all my own work on them so I know them inside out and if I get stumped there are a few, very active forums dedicated to Panthers with many enthusiast members where I can get answers. Insurance is cheap and they’ll drive away from most accidents. I could go on, but you get the idea.
There are still some bargains on older Crown Vics that are being retired out of police departments. They'll typically have 100,000 miles on them, but that's just getting broke in for a Panther. Cab companies buy most of the old police cars, at 100,000 miles and put another 200,000 on them, routinely. They could pick any car on the road for a cab, but they pick Panthers for a reason. They just don't breakdown and even if you tried, it's tough to kill them through normal usage.
Now, the gas mileage isn't great, but it isn't awful either. I get 25 mpg on the highway in the Town Car, where it racks up 80% of it’s miles.
I’ve been fortunate enough to buy them at 30,000 to 50,000 miles and three or four years old, although, that is pretty much coming to an end because Ford hasn’t made them for a few years now. Except for the old police cars, most of them have been owned by someone in their 60s or 70s and are fairly low mileage, and prices are usually fair because who wants to be seen in old fogey car ? I don’t give a hoot, because for me, there probably isn’t a car with a cheaper overall cost of ownership than a Panther. And performance is pretty darn good. With a few simple and relatively inexpensive mods they’re a lot of fun on the twisty back roads and the highway.
So, that's the key for me with buying a used car. You want something that is rock solid reliable, that you can drive for years at minimal overall cost and that you know well. Now, maybe a Panther isn’t right for you, but there are other older cars that are similar to the Panthers in terms of durability. Buick LeSabres from the '90s to early-'00s, were a rock solid car and there are still some out there. S-10s from the mid-'90's to about '04 are great vehicles, and again, they’re still plentiful.
If you buy the right kind of vehicle (see above) you can overpay a bit and still come out way ahead in the long run, and that's what counts.
Oh, and don’t be bashful about getting creative in your search. Talk to the used car manager at the new car dealers and tell them what car you’re interested in buying and ask them to call you when one comes in and they’re not going to keep it. You can get a good deal that way. If you’re a church goer ask around at your church, see if you can put a note on the bulletin board or an ad in their Sunday circular. Put up notes in the grocery stores, auto parts stores, etc. If someone is thinking about trading in their car for a new one people will often ask their mechanic whether the new one they’re considering is any good, or will their get their old one checked out. So ask around at repair shops. Leave no stone unturned. You’ll be surprised how many people will help you if you just ask them to.
Cash for clunkers killed S10 Blazer/Jimmy.Astro/Safari,E-vans/B-Vans/G-Vans,Explorers,Durangos,and some full size pickups.They had to be a set age and got below a certain mpg (18?).They didnt kill Camry,Accord,Lumina,Concorde/300,Intrepid...etc.
Supply and demand. Clearly supply lacks in your locale and demand is high. Possibily local economics does to. I noticed folks coming wanting to come really far to acquire my 95 Civic with high miles(230k but immaculate condition). It was apparently cheap but not interesting in my area.
The folks came from areas with low socio-economic conditions.
The folks came from areas with low socio-economic conditions.
Originally Posted By: NHGUY
Cash for clunkers killed S10 Blazer/Jimmy.Astro/Safari,E-vans/B-Vans/G-Vans,Explorers,Durangos,and some full size pickups.They had to be a set age and got below a certain mpg (18?).They didnt kill Camry,Accord,Lumina,Concorde/300,Intrepid...etc.
No real loss there given $3-$4/gallon fuel prices.
Cash for clunkers killed S10 Blazer/Jimmy.Astro/Safari,E-vans/B-Vans/G-Vans,Explorers,Durangos,and some full size pickups.They had to be a set age and got below a certain mpg (18?).They didnt kill Camry,Accord,Lumina,Concorde/300,Intrepid...etc.
No real loss there given $3-$4/gallon fuel prices.
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Originally Posted By: JHZR2
Has it gotten worse and worse, or are cars all fancier and more appointed now, so they command higher prices. They cost more to begin with, so they cost more in the secondary market. Its not like you can find many manual, crank window loss leader cars anymore...
I subscribe to this....We consumers demand lots of toys in our cars now and the gubernment mandates soooo much extra "stuff" that a working used car costs a lot more.
Has it gotten worse and worse, or are cars all fancier and more appointed now, so they command higher prices. They cost more to begin with, so they cost more in the secondary market. Its not like you can find many manual, crank window loss leader cars anymore...
I subscribe to this....We consumers demand lots of toys in our cars now and the gubernment mandates soooo much extra "stuff" that a working used car costs a lot more.
I personally think it is as simple as people keeping their cars for longer periods of time. This is driving the used car market prices higher.
For instance, I looked for used Honda Odysseys for awhile. Everything that was in decent shape or had a reasonable amount of miles on it wasn't much less than a new one. At the end of the day I decided the new one was work a $5k premium so that I could start with a blank slate (since I fully intend on driving it into the ground).
One difference in my situation was that I was in the position to pay cash for the van. There was no way I was going to finance $32k. This brings me to another point. High used car prices are also partly due to people who bought a new car using long-term financing. When they decide they can't afford the payments anymore they ask a premium price to try to pay off as much of the loan as possible because they have built up next to zero ownership of the vehicle.
For instance, I looked for used Honda Odysseys for awhile. Everything that was in decent shape or had a reasonable amount of miles on it wasn't much less than a new one. At the end of the day I decided the new one was work a $5k premium so that I could start with a blank slate (since I fully intend on driving it into the ground).
One difference in my situation was that I was in the position to pay cash for the van. There was no way I was going to finance $32k. This brings me to another point. High used car prices are also partly due to people who bought a new car using long-term financing. When they decide they can't afford the payments anymore they ask a premium price to try to pay off as much of the loan as possible because they have built up next to zero ownership of the vehicle.
I am still trying to figure out how used cars are still more expensive than equivalent cars. Seems like a few years would have allowed people to catch on.
It has to come down at some point. There are manufacturers out there (Nissan ...) that are leasing cars hand over foot for $100 a month. Seems like in a few years, the market is going to be flooded with used cars.
It's not uncommon for 10 year old cars around here to go for $10K. And the dealers don't even have to try to sell you the car. If you try to haggle on the price, they will just sell the car to someone else.
It has to come down at some point. There are manufacturers out there (Nissan ...) that are leasing cars hand over foot for $100 a month. Seems like in a few years, the market is going to be flooded with used cars.
It's not uncommon for 10 year old cars around here to go for $10K. And the dealers don't even have to try to sell you the car. If you try to haggle on the price, they will just sell the car to someone else.
The internet & travel is your friend. Also, keep a look out for auctions.
I've been keeping one eye on something used, and it amazes me as well how much prices have went up. I see the reasoning but IMO it also makes the new car market more attractive - I know depreciation as you drive off the lot is always a factor, but looking at pricing of our Cruze it seems we are in a good position since purchase. Pair that with the supposed value of our other two cars and it makes me wonder.
JHZR2
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Originally Posted By: Wolf359
Originally Posted By: DC44
Originally Posted By: mrsilv04
The Cash for Clunkers program started it...
Why do people blame cash for clunkers as the cause of the price rise in the used car market. I would say the top ten cars traded in on cash for clunkers were not cars that were purchased in huge numbers in the used car market. I would say it has more to do with the economy and reliability of cars now. 100k in not high mileage anymore. A new car will cost 25-30k financed. They can charge 15k for a car that should be 12k in reality. People will buy because they can't afford the cost of a new car but need something halfway reliable. For the most par America is a very car dependent country. You just can do to well without one.
I feel sorry for the people that are in bad financial situations now because the are stuck in positions were the have to pick their poison and are forced to make not so great financial decisions. Do I purchase a car I can barely afford but it reliable or do I buy a beater. I don't have the money to purchase a car for cash, let alone have the time to save for it because I really need a car. If I choose a beater, will I have to: throw money at it, play 'when are you going to screw me', possibly miss work, loose money, put my job in jeopardy and be back were I started.
Many people seem to think cash for clunkers lead to an increase in the price of used cars. There's no real reports out there that really support that position. In reality when you go from making 17 million cars a year down to 11 or 12 million cars a year. Basically in 2005, 17.4 million cars were sold in the US, in 2006 - 17, 2007 - 16.4, 2008 - 13.5, 2009 - 10.6, 2010 - 11.8, 2011 - 13. So from 2007-2011, about 19.1 million less cars were sold. Versus 680k cars that were crushed in cash for clunkers. That decrease is probably 96% of the reason why the price of used cars are high, not that much supply. And also why market prices for good used cars are high, they just didn't make that many of them. Also with a value up to $4500, those were NOT good used cars. Don't forget that Hurricane Sandy alone destroyed 250k cars, and that was all types.
I agree. Many people want to politicize and play the blame game for this situation, just because its standard mode of operation. C4C was not a program that was buying up vehicles of the sort that the OP is looking for. They were low-MPG units, primarily bigger SUVs and whatnot that could be traded for a higher MPG vehicle. Given how many people lease and trade vehicles early, the higher MPG cars and small SUVs that OP is looking for should be MORE available. The sales numbers indicate the reality of the situation and how that isnt necessarily occurring.
But since people are keeping their cars longer, of course there will be fewer cars on the market, and that's going to drive the prices.
Originally Posted By: DC44
Originally Posted By: mrsilv04
The Cash for Clunkers program started it...
Why do people blame cash for clunkers as the cause of the price rise in the used car market. I would say the top ten cars traded in on cash for clunkers were not cars that were purchased in huge numbers in the used car market. I would say it has more to do with the economy and reliability of cars now. 100k in not high mileage anymore. A new car will cost 25-30k financed. They can charge 15k for a car that should be 12k in reality. People will buy because they can't afford the cost of a new car but need something halfway reliable. For the most par America is a very car dependent country. You just can do to well without one.
I feel sorry for the people that are in bad financial situations now because the are stuck in positions were the have to pick their poison and are forced to make not so great financial decisions. Do I purchase a car I can barely afford but it reliable or do I buy a beater. I don't have the money to purchase a car for cash, let alone have the time to save for it because I really need a car. If I choose a beater, will I have to: throw money at it, play 'when are you going to screw me', possibly miss work, loose money, put my job in jeopardy and be back were I started.
Many people seem to think cash for clunkers lead to an increase in the price of used cars. There's no real reports out there that really support that position. In reality when you go from making 17 million cars a year down to 11 or 12 million cars a year. Basically in 2005, 17.4 million cars were sold in the US, in 2006 - 17, 2007 - 16.4, 2008 - 13.5, 2009 - 10.6, 2010 - 11.8, 2011 - 13. So from 2007-2011, about 19.1 million less cars were sold. Versus 680k cars that were crushed in cash for clunkers. That decrease is probably 96% of the reason why the price of used cars are high, not that much supply. And also why market prices for good used cars are high, they just didn't make that many of them. Also with a value up to $4500, those were NOT good used cars. Don't forget that Hurricane Sandy alone destroyed 250k cars, and that was all types.
I agree. Many people want to politicize and play the blame game for this situation, just because its standard mode of operation. C4C was not a program that was buying up vehicles of the sort that the OP is looking for. They were low-MPG units, primarily bigger SUVs and whatnot that could be traded for a higher MPG vehicle. Given how many people lease and trade vehicles early, the higher MPG cars and small SUVs that OP is looking for should be MORE available. The sales numbers indicate the reality of the situation and how that isnt necessarily occurring.
But since people are keeping their cars longer, of course there will be fewer cars on the market, and that's going to drive the prices.
http://www.bls.gov/data/inflation_calculator.htm
$5k is/was:
2013: $5k
2010: $4,680
2005: $4,192
2000: $3,696
1995: $3,271
1990: $2,805
1985: $2,309
1980: $1,769
Just looking at the change from 2005->2013, $838 in 2005 is the same as $1k today, or 16% inflation in prices. $780 in 1995 was the same as $1k in 2005; that is 22% inflation. I'm not going to say inflation is the cause of all this, but if you aren't shopping every year you might be surprised by how much less your dollar goes.
I think some of this price bump is related to how much longer vehicles can last. It's not like 20 years ago where a vehicle was lucky to make it that long before it was rotted away. Vehicles don't seem to get priced on the basis of what future repairs it *may* have; the fact that it's a pain to fix anything doesn't seem to impact it. Only if it's an actual well known problem might the price go downward.
$5k is/was:
2013: $5k
2010: $4,680
2005: $4,192
2000: $3,696
1995: $3,271
1990: $2,805
1985: $2,309
1980: $1,769
Just looking at the change from 2005->2013, $838 in 2005 is the same as $1k today, or 16% inflation in prices. $780 in 1995 was the same as $1k in 2005; that is 22% inflation. I'm not going to say inflation is the cause of all this, but if you aren't shopping every year you might be surprised by how much less your dollar goes.
I think some of this price bump is related to how much longer vehicles can last. It's not like 20 years ago where a vehicle was lucky to make it that long before it was rotted away. Vehicles don't seem to get priced on the basis of what future repairs it *may* have; the fact that it's a pain to fix anything doesn't seem to impact it. Only if it's an actual well known problem might the price go downward.
The prices of new cars have skyrocketed partly due to the addition of multiple airbags at ,~$1500-2,000 each. The newer cars have more computers too. Now a body control module and the engine / transmission control module (Some have one computer for each). All the new features such as A B S, traction control etc. are computer driven also. Since used prices are always goverened by the original purchase price, they went up and will keep going up. The fact that newer cars last ~150,000-200,000 miles with average care has added to that fact. In the past a 15 year old car was a clunker usually. Nowadays many 15 year old cars are 100% functional and look pretty good too.
Import brands are always "high priced", but in reality you can get them for as cheap as a domestic used car if you can haggle, especially for private sales.
Originally Posted By: johnachak
The prices of new cars have skyrocketed partly due to the addition of multiple airbags at ,~$1500-2,000 each.
Nope...........
Not really in terms of price.......Modern Civic has ABS, Stability control, way more air bags, ipod hookup/integration
1999 Civic LX $14,830 MSRP which is $20,736.81 in 2013 dollars.
2013 Civic LX MSRP $17,965
Adjusting 1999 Civic LX for modern inflation its expensive and a tin can compared to 2013 Civic LX.
The prices of new cars have skyrocketed partly due to the addition of multiple airbags at ,~$1500-2,000 each.
Nope...........
Not really in terms of price.......Modern Civic has ABS, Stability control, way more air bags, ipod hookup/integration
1999 Civic LX $14,830 MSRP which is $20,736.81 in 2013 dollars.
2013 Civic LX MSRP $17,965
Adjusting 1999 Civic LX for modern inflation its expensive and a tin can compared to 2013 Civic LX.
and while we're at it, what's the deal with 5w20 vs 5w30?
Originally Posted By: heynow
Inflation
You beat me to it. People will come up with all kinds of explanation while believing in the official 2% inflation rate. The real inflation rate is in the 8-10% range and that explains the price of real stuff (including used cars).
We may as well talk why gallon of milk (or gasoline) increased so much in the last 10 years. Same thing.
Inflation
You beat me to it. People will come up with all kinds of explanation while believing in the official 2% inflation rate. The real inflation rate is in the 8-10% range and that explains the price of real stuff (including used cars).
We may as well talk why gallon of milk (or gasoline) increased so much in the last 10 years. Same thing.
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