Wait for the used car bubble to burst or not?

[ryster]

Now that automakers have learned to be profitable without stacking dealer lots with tons of inventory and having to pile loads of incentives on hoods to sell, it does not seem as though things will improve for the buyer. The automakers are transitioning quickly to a model where they focus on their high profit margin models. That means the lower margin, "loss leaders" will be fewer and far between. That will in turn drive up the price of those models (both new and used) as buyers who cannot afford (or who do not want) a $60K large SUV or truck scramble to find them.

I think we are entering a whole new generation of auto sales (drastically higher prices, low inventory, very few incentives, higher loan rates) and things will never return to what they were in the "before days". Automakers are pivoting quickly and the buyers will have very few, if any, advantages going forward. I want to buy a new car sometime in the next 12 months, and I am absolutely dreading it.

 

[KCJeep]

I haven't followed the Fusion, that's not one of the ones with the crap transmissions in it is it?

As others have said, that's a great car possibly the most reliable thing Ford has produced in the last 15 years. My daughter has one (a 2016) 80k and only maintenance.

 

[Wolf359]

Now that automakers have learned to be profitable without stacking dealer lots with tons of inventory and having to pile loads of incentives on hoods to sell, it does not seem as though things will improve for the buyer. The automakers are transitioning quickly to a model where they focus on their high profit margin models. That means the lower margin, "loss leaders" will be fewer and far between. That will in turn drive up the price of those models (both new and used) as buyers who cannot afford (or who do not want) a $60K large SUV or truck scramble to find them.

I think we are entering a whole new generation of auto sales (drastically higher prices, low inventory, very few incentives, higher loan rates) and things will never return to what they were in the "before days". Automakers are pivoting quickly and the buyers will have very few, if any, advantages going forward. I want to buy a new car sometime in the next 12 months, and I am absolutely dreading it.

I think you're being melodramatic. Car makers have always been able to ramp up production to meet demand. It might take a little while longer due to the current situation but it's not a long term problem. They went from a low of about 10.5 million to a high of over 17 million a few years ago, last year was down to about 14 million. Long term they're always happy to flood the market with cars to gain market share.

 

[mrsilv04]

I've seen brand new Fusions priced @ $16k.

Yes, they're always cheaper somewhere else.

I did a quick search of a 200 mile radius of the buyer's location, to use as a quick example.

The point was... why buy an overpriced used car... when there are much better new car values out there.

 

[ryster]

I think you're being melodramatic. Car makers have always been able to ramp up production to meet demand. It might take a little while longer due to the current situation but it's not a long term problem. They went from a low of about 10.5 million to a high of over 17 million a few years ago, last year was down to about 14 million. Long term they're always happy to flood the market with cars to gain market share.

We will have to wait and see, but automakers aren't going to keep flooding the market with low margin products. Even the hold lots currently packed with vehicles waiting for "chips" are the high margin products. We are already at the point where if you want a new sedan or compact car you have to go Kia/Hyundai, Nissan, Honda, Toyota, VW, or Mazda. Upmarket buyers will go BMW, MB, Audi to get a sedan or traditional car if that is what they want.

The domestics are locked in on full-size SUVs and trucks as their hero products. That is the only market they care about right now and in the foreseeable future.

 

[haggler]

The way I see it there were 3 times of people in this pandemic - 1. those who lost everything, 2. those who were still employed at home or otherwise, 3. those who made a killing. When demand shores up on 2&3, prices will fall. Chip shortage wont matter if people ain't buyin. Its like the price of homes. People had nothing to do with their money so they go looking to spend money on something. You could entertain yourself with a car or home during this pandemic. I'd say it will level out by next year.

 

[Shaman]

The older 1.5, 1.6, and 2.0 Fusions has "coolant intrusion" issues, that I think got fixed in 2019 maybe.

 

[Shaman]

At this point, don't buy used. Buy a NEW 2020 Ford Fusion with the 2.5 liter engine, at several thousand off sticker prices.

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I at least would like bluetooth phone and music, and would prefer Apple Car Play. Dark if not black interior would also be highly desirable. I found that a spare tire, and dark seats cuts out quite a lot of potential vehicles.

 

[KCJeep]

The older 1.5, 1.6, and 2.0 Fusions has "coolant intrusion" issues, that I think got fixed in 2019 maybe.

The bargain Fusions floating around are mostly 2.5's, no issues.

 

[JTK]

I've got a 2009 Sonata with some body damage and 140K miles, and I am looking to buy something newer than 2015. The vehicles that sold at the first of the year for $12K have similar vehicles listing at $14-15K now. I'm not confident that the Sonata would sell at $2k more than it would have, so the price difference is hard to justify. Do you see the market price going down anytime soon?

I'm looking at midsize sedans if it clarifies anything.

Like you say, everything is higher, but if you can squeak another $2K out of the Sonata, it somewhat balances out.

I too would shoot for new depending on the deal you can work out for the trade-in allowance.

Just beware of the line items they try to slide in on the bill of sale.

The "out the door price" strategy kind of goes out the door when you are including a trade in.

 

[PWMDMD]

Now that automakers have learned to be profitable without stacking dealer lots with tons of inventory and having to pile loads of incentives on hoods to sell, it does not seem as though things will improve for the buyer. The automakers are transitioning quickly to a model where they focus on their high profit margin models. That means the lower margin, "loss leaders" will be fewer and far between. That will in turn drive up the price of those models (both new and used) as buyers who cannot afford (or who do not want) a $60K large SUV or truck scramble to find them.

I think we are entering a whole new generation of auto sales (drastically higher prices, low inventory, very few incentives, higher loan rates) and things will never return to what they were in the "before days". Automakers are pivoting quickly and the buyers will have very few, if any, advantages going forward. I want to buy a new car sometime in the next 12 months, and I am absolutely dreading it.

Maybe and maybe not. I don't think there's enough data and time to determine which direction manufacturers will be going when things normalize more.

 

[Shaman]

The bargain Fusions floating around are mostly 2.5's, no issues.

Yep. a few K lower than the 2.0Ts I have been looking at.

 

[zzyzzx]

Now that automakers have learned to be profitable without stacking dealer lots with tons of inventory and having to pile loads of incentives on hoods to sell, it does not seem as though things will improve for the buyer. The automakers are transitioning quickly to a model where they focus on their high profit margin models. That means the lower margin, "loss leaders" will be fewer and far between. That will in turn drive up the price of those models (both new and used) as buyers who cannot afford (or who do not want) a $60K large SUV or truck scramble to find them.

I think we are entering a whole new generation of auto sales (drastically higher prices, low inventory, very few incentives, higher loan rates) and things will never return to what they were in the "before days". Automakers are pivoting quickly and the buyers will have very few, if any, advantages going forward. I want to buy a new car sometime in the next 12 months, and I am absolutely dreading it.

Isn't it the dealers who are profiting the most from this? I think the increased costs to the automakers is only being just offset by reduced incentives and (presumably) reduced advertising costs. I mean if I were an automaker, I'd stop all advertising and incentives. But the factory shutdowns are costly to the automakers and I am sure that there are other increased costs.

Don't buy a car in the next 12 months.

 

[dareo]

Prices for vehicles, homes, stocks, cryptos, are all very high. One asset class drop could bring the others down. Homes could go down and bring a flood car repos. All those trucks that were bought for work at full price require work to make the payments.

If we don't see any dramatic asset price drops then inflation alone will keep the car prices high even when supply returns.

 

[svtrit]

I just bought a spotless, well maintained (documented) 226k mile, 1 owner Camry due to all of the used cars under 150k miles on the local lots lot being total garbage. Scratches, trash interiors, etc. yet they want $11k for them. They would have been $6000 cars a year ago.
A dealer told me the is no more negotiating on any cars. The price is the price due to the shortage.

I’ll drive the Camry 3 years or so, and then look for a replacement again.