Will the used car market cool off?

[Badgerstate]

Eventually it will, when part suppliers get back to producing and auto manufacturers no longer are facing parts shortages and can back to cranking out cars.
Im hoping that the used market stays hot for at least another 2 years, so that a Ford dealer will overpay me for my Accord when I trade it in on a Bronco Sport. LOL

 

[ripcord]

Be careful what you wish for, your home might be a huge part of your retirement and suddenly you may end up unable to retire years down the road.

Requiring citizenship to own real estate is the law in lots, if not most, countries around the world.

 

[grampi]

I'm glad I'm not in need of ANY vehicles right now...everything is more expensive!

 

[Wolf359]

Requiring citizenship to own real estate is the law in lots, if not most, countries around the world.

Yeah, that's not the law in the US. As long as you show up with the money, you can buy property in the US.

 

[Rmay635703]

Be careful what you wish for, your home might be a huge part of your retirement and suddenly you may end up unable to retire years down the road.

I likely will never own a house but instead have money in the bank

Depending on my lifestyle I could probably semi retire in 10 years

 

[ripcord]

Yeah, that's not the law in the US. As long as you show up with the money, you can buy property in the US.

My co-worker's wife is a real estate agent. She's starting to see offers coming from Zillow on properties where Zillow is acting as a buying agent for foreign investors. It's a good thing for her as the offers are sometimes stupidly over value. That has the unfortunate effect for other buyers of driving up the market artificially.

 

[dja4260]

We're going to hold on the the van. Too much uncertainty in the future! I enjoyed reading this thread though. Strange times we're living in!

 

[eljefino]

Chinese Nationals bought my last house-for over a half million - in cash. This was nine years ago. However-I was in a certain are in Southern California deemed desirable to them (for whatever reasons).

If they spend half a million they get residency as part of the deal. link

 

[zzyzzx]

Since automakers are concentrating their efforts on producing mostly their most profitable vehicles I can see it happening that at some point the dealers will have a good supply of maybe only one vehicle from their product line.

 

[Rmay635703]

Since automakers are concentrating their efforts on producing mostly their most profitable vehicles I can see it happening that at some point the dealers will have a good supply of maybe only one vehicle from their product line.

The last time automakers focused on only making profitable (AKA landbarges) gas got expensive and they needed a bailout when people’s tastes in vehicles changed

 

[zzyzzx]

The last time automakers focused on only making profitable (AKA landbarges) gas got expensive and they needed a bailout when people’s tastes in vehicles changed

I'm expecting what I describe as being temporary.

 

[CKN]

The last time automakers focused on only making profitable (AKA landbarges) gas got expensive and they needed a bailout when people’s tastes in vehicles changed

True-but even full size trucks today get better mpg than those "land barges".

 

[JeffKeryk]

True-but even full size trucks today get better mpg than those "land barges".

My '70 Vette with the '70 Chevelle 454/460 LS6 got 4 mpg, maybe 6. Dunno for sure. Pretty bad.

 

[macarose]

I have lived the wholesale auto auction business ever since 1999.

In that time I have been an auto auctioneer, a remarketing manager, a part owner of an auto auction, and a dealer here in metro-Atlanta for the last 18 years.

Here's the reality. First off, car prices will never be as cheap as they recently were back in 2019 because cheap new cars are getting systematically eliminated by those who can't sell them profitably. The price of the average new vehicle has gone up to well over $38,000 which means that there will be far fewer bargain basement offerings in the used car market going forward. This inflation was happening well before the chip shortage took place.

Second, the auctions have been able to successfully sell virtual sales as the new normal for dealers and rental car companies. The good news is that as a dealer, I can now visit well over a dozen auctions on a single day. The bad news? So can everybody else, and the tools we all use to figure out what to buy is becoming increasingly identical.

This is the main reason why a 2014 Corolla with 60,000 miles now cost as much as a 2017 Corolla with 40,000 miles did back in February. When your tools are giving you constant buy signals based on your ability to supposedly get more money for the car, prices skyrocket. You now have Carvana, Carmax and Drivetime pricing in a certain statistical portion of seven year loans to subprime customers (a.k.a. the industry sweet spot), going up against the Hertz, Avis, and other major rental car companies. In between all that you have franchise dealers who are sucking up every potential lease deal before it ever even ends up at an open wholesale auction.

I can tell you that there have been days where Toyota Financial Services had absolutely nothing to offer at the wholesale auctions other than a few random pieces of junk. Ford usually has around 1,000 vehicles a week at their open sale here in Atlanta. Last week it was fewer than 150 and all of those were either junk or unpopular base models.

There are other issues at play but for now those are the major forces. By the way, if you're wondering who I am... I created this study on the long-term reliability of used cars which now has over three million vehicles in its database. If any of you know a web designer who appreciates minimalist graphics and quick downloads feel free to PM me.

All the best!

 

[RazorsEdge]

I can tell you the quality of the used cars is pathetic. We went to two different dealership on two different days, to check out used ford fusions. In both cases,I determined that both vehicles from inspection were involved in a minor accident. If this is what dealership are hoping the public is going to purchase,it truelly is pathetic.

 

[Andrew1972]

I’d dump it and see what life is like as one car family.

 

[BLND1]

I likely will never own a house but instead have money in the bank

Depending on my lifestyle I could probably semi retire in 10 years

I pay less for my mortgage/ins/tax now than I did on a 1 bedroom apartment. I too have money in the bank. YMMV.

 

[BLND1]

I’d dump it and see what life is like as one car family.

We just did that for about 8 months. With COVID work from home it was totally doable. We could have made it work going forward but two cars does have advantages.

 

[PandaBear]

If they spend half a million they get residency as part of the deal. link

Last I heard you need to not only invest money but to create jobs. This is the major difference between US residency vs Canadian. This is also why Canada seems to be an easier destination for them. Unless the law changed I know for sure just buying a home won't work.

 

[CKN]

I have lived the wholesale auto auction business ever since 1999.

In that time I have been an auto auctioneer, a remarketing manager, a part owner of an auto auction, and a dealer here in metro-Atlanta for the last 18 years.

Here's the reality. First off, car prices will never be as cheap as they recently were back in 2019 because cheap new cars are getting systematically eliminated by those who can't sell them profitably. The price of the average new vehicle has gone up to well over $38,000 which means that there will be far fewer bargain basement offerings in the used car market going forward. This inflation was happening well before the chip shortage took place.

Second, the auctions have been able to successfully sell virtual sales as the new normal for dealers and rental car companies. The good news is that as a dealer, I can now visit well over a dozen auctions on a single day. The bad news? So can everybody else, and the tools we all use to figure out what to buy is becoming increasingly identical.

This is the main reason why a 2014 Corolla with 60,000 miles now cost as much as a 2017 Corolla with 40,000 miles did back in February. When your tools are giving you constant buy signals based on your ability to supposedly get more money for the car, prices skyrocket. You now have Carvana, Carmax and Drivetime pricing in a certain statistical portion of seven year loans to subprime customers (a.k.a. the industry sweet spot), going up against the Hertz, Avis, and other major rental car companies. In between all that you have franchise dealers who are sucking up every potential lease deal before it ever even ends up at an open wholesale auction.

I can tell you that there have been days where Toyota Financial Services had absolutely nothing to offer at the wholesale auctions other than a few random pieces of junk. Ford usually has around 1,000 vehicles a week at their open sale here in Atlanta. Last week it was fewer than 150 and all of those were either junk or unpopular base models.

There are other issues at play but for now those are the major forces. By the way, if you're wondering who I am... I created this study on the long-term reliability of used cars which now has over three million vehicles in its database. If any of you know a web designer who appreciates minimalist graphics and quick downloads feel free to PM me.

All the best!

Nice insight from somebody in the business. Thank you! It makes sense that the new vehicles that are expensive and highly optioned are going to make for more expensive used vehicles in the future. The $10,000.00 "beater" will be the norm on BITOG! LOL!