Used prices to rise again?

[SC Maintenance]

See that massive drop in new car sales? That's the reason for the spike in used car pricing. When you go from 16 million new cars sales in the US annually to not even 11 million, there will be a lot less used cars on the market. C4C took less than 700k vehicles off the road, we've had storms that have done that.

View attachment 141438

CfC did have an affect. It was focused narrowly on the very lowest priced used $ part of the market, so it doesn't show up very well in the overall statistics because as a percentage the dollars were small - but it was there for sure. It hurt the working poor the most, as usual. As posted above there were many articles on it at the time.

The new vehicle sales collapse pushed used prices down as well, but on the newer used market - different segment. I had previously always bought used cars, but I bought new in both late 2008 and 2011 - both at the end of Q3. I got crazy rebates - $5K for the one in 2008 plus huge discount from the dealer. In 2011 not quite as good but close. Was almost cheaper than anything comparable a couple years old.

In economics there is no vacuum.

 

[CKN]

It's coming back I think.

With used car prices what they are there isn't a basis for your theory.

 

[SC Maintenance]

The BLS tracks used car pricing: https://www.bls.gov/news.release/cpi.nr0.htm

The chart below is the percentage decrease in price of used cars from July 2022 to January 2023, and the -11.6 is the trailing 12 month non seasonally adjusted price - ie used car prices dropped -11.6% last year.

New car prices have increased during this entire period interestingly.

The BLS doesn't get too elaborate in their transaction data - its just average price. However you can correlate this with Manheim auto auctions - who essentially say that pickups and smaller cars are still increasing, and luxury used prices are decreasing - quickly. So its the classic trade down in a recession - people shop at Walmart and buy more economical cars. Someone that may have bought a new truck buys used. https://publish.manheim.com/en/services/consulting/used-vehicle-value-index.html

So its completely possible two people car shopping in the same market will have very different impressions, dependent on the type of car there looking to buy.

Used cars and trucks	-0.8	-0.2	-1.1	-1.7	-2.0	-2.0	-1.9	-11.6

New vehicles	0.5	0.8	0.7	0.6	0.5	0.6	0.2	5.8

 

[AmBeRnEcTaR]

With used car prices what they are there isn't a basis for your theory.

Perhaps where you live that's the case.

 

[Thermo1223]

With used car prices what they are there isn't a basis for your theory.

Agreed,

Not with someone willing to pay for this and I love me a TDI but not a feature less MKIV with frainstein electronics from a MKIII.

No Reserve: 1999 Volkswagen Jetta GL TDI 5-Speed

Bid for the chance to own a No Reserve: 1999 Volkswagen Jetta GL TDI 5-Speed at auction with Bring a Trailer, the home of the best vintage and classic cars online. Lot #97,927.

bringatrailer.com

 

[AmBeRnEcTaR]

Agreed,

Not with someone willing to pay for this and I love me a TDI but not a feature less MKIV with frainstein electronics from a MKIII.

No Reserve: 1999 Volkswagen Jetta GL TDI 5-Speed

Bid for the chance to own a No Reserve: 1999 Volkswagen Jetta GL TDI 5-Speed at auction with Bring a Trailer, the home of the best vintage and classic cars online. Lot #97,927.

bringatrailer.com

That's a poor example.
It's a car with a following that's barely broken in and looks mint.
Lots of collectors and speculators on BaT.
There are some good deals there but certainly not on all cars.

 

[Thermo1223]

That's a poor example.
It's a car with a following that's barely broken in and looks mint.
Lots of collectors and speculators on BaT.
There are some good deals there but certainly not on all cars.

Not really, it's not a collector car by any means and the same thing happens with Corollas & Civics. I've owned several TDI's and I wouldn't touch that for $6K. Every piece of rubber is suspect and so is any electronic device on it. There are people overpaying on forums by thousands to save a few bucks at the pump.

 

[AmBeRnEcTaR]

Not really, it's not a collector car by any means and the same thing happens with Corollas & Civics. I've owned several TDI's and I wouldn't touch that for $6K. Every piece of rubber is suspect and so is any electronic device on it. There are people overpaying on forums by thousands to save a few bucks at the pump.

Some people buy nostalgia, memories, cars they couldn't afford as kids but now can. Those people alter prices in certain parts of the market but there is value if you look hard enough and snipe the deals when they present themselves. I've seen some really good deals on BaT in the No Reserve actions.

I've noticed cars in my area coming down on CL too. That may not be the case everywhere and I usually only search locally so I'm certainly no expert when it comes to U.S prices.

 

[CKN]

Off this forum BAT isn't a thing when looking for a used car. Just like CoPart isn't. And a 5 speed isn't very popular to the masses.

 

[CKN]

Perhaps where you live that's the case.

The auctions are not showing that either.

 

[mrsilv04]

Just saw a tow truck from "Illinois Auto Recovery" drive by slowly. He's out and is looking for something....

Still no uptick in the "inventory" sitting in the back lot behind the credit union. Unfortunately, I think it is only a matter of time.

 

[dishdude]

Not really, it's not a collector car by any means and the same thing happens with Corollas & Civics. I've owned several TDI's and I wouldn't touch that for $6K. Every piece of rubber is suspect and so is any electronic device on it. There are people overpaying on forums by thousands to save a few bucks at the pump.

100% that's an enthusiast vehicle and can't be used as a barometer for a grocery getter commuter used car.

 

[SpicySpark]

Here in Québec Canada, I saw an ad for a 2022 Chevrolet Spark 1LT with like 8000 km for 25595$ CAD.

Insane to buy at this price. That's the reason I got a new Chevrolet Spark back in 2022, for msrp price.

 

[Rmay635703]

Once the market switches from supply biased to demand biased none of this will matter

 

[SC Maintenance]

Once the market switches from supply biased to demand biased none of this will matter

Obviously, but you could argue from the lowered production of OEM's the market is 6+ million units short or undersupplied collectively from the last 3 years.

The undersupply was solved with increased prices, so those who might normally trade didn't, meaning fewer late model used pushing everyone down the supply chain based on their budget, and that is how we get to the $5K beater.

So the real question becomes how many new cars will the OEM's produce, and how much will rising interest rates and rising prices suppress demand.

 

[Rmay635703]

Obviously, but you could argue from the lowered production of OEM's the market is 6+ million units short or undersupplied collectively from the last 3 years.

The undersupply was solved with increased prices, so those who might normally trade didn't, meaning fewer late model used pushing everyone down the supply chain based on their budget, and that is how we get to the $5K beater.

So the real question becomes how many new cars will the OEM's produce, and how much will rising interest rates and rising prices suppress demand.

Compared to ye olde times the proportion of new to used has been out of whack 20 years

Something will give eventually

 

[Thermo1223]

100% that's an enthusiast vehicle and can't be used as a barometer for a grocery getter commuter used car.

Meh that's like saying a mint Geo Metro is as well. It's an economy car but this pattern in my area has a emerged with beat to death Civics & Corollas so I see the trend and it's a little frightening what people will pay for something completely not worth it.

 

[macarose]

I went from having the best month in 20 years this January to a meh February.

It's an art to find an inexpensive car and I think I've perfected it. But dealing with people who still think the year is 2009 and negotiate as if Pawn Stars is a true barometer of negotiation strategies is getting really old.

 

[AmBeRnEcTaR]

Meh that's like saying a mint Geo Metro is as well. It's an economy car but this pattern in my area has a emerged with beat to death Civics & Corollas so I see the trend and it's a little frightening what people will pay for something completely not worth it.

Some of those people that absolutely need a car have no choice. There's a big pool of people viewing a small pool of cars.
I've seen what I'd consider 'value' five or six times in the last two weeks.

Each time those vehicles have been snatched up within hours. Situations dictate buying behavior sometimes. IMO a lot of the buying currently is more a matter of necessity than it is wants or upgrades and those buyers overpay because of that, they need transportation. If a person has time and an open mind towards value for dollar, it's out there if they're patient and can wait for the right deal.

 

[Thermo1223]

I went from having the best month in 20 years this January to a meh February.

It's an art to find an inexpensive car and I think I've perfected it. But dealing with people who still think the year is 2009 and negotiate as if Pawn Stars is a true barometer of negotiation strategies is getting really old.