Used car prices about to go into free fall
- Thread starter Klaus
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6 so far...some models have 1, some models have 3 or 4.
Typically 1-2 per MY per model.
Been saying it for a few months.
The "inventory is low" phenomena completely disappears when people stop buying cars and houses because their money now needs to be focused on paying their adjustable rate on their 2nd that just doubled.... or their fuel bill that rose by $400 per month, or their grocery bill that rose by $300 per month.
Believe it or not, not every American makes $200k per year (sarcasm). Millions of people are finding their financial situations completely changing. We will be in a full on recession as the country stops consuming. I think it's going to be shocking to be honest.
The empty car lots are going to be magically full soon enough.
The "inventory is low" phenomena completely disappears when people stop buying cars and houses because their money now needs to be focused on paying their adjustable rate on their 2nd that just doubled.... or their fuel bill that rose by $400 per month, or their grocery bill that rose by $300 per month.
Believe it or not, not every American makes $200k per year (sarcasm). Millions of people are finding their financial situations completely changing. We will be in a full on recession as the country stops consuming. I think it's going to be shocking to be honest.
The empty car lots are going to be magically full soon enough.
What do car dealerships do when most of their used inventory is bought at a higher premium?
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I won't have stock units available until October/November.
What do you mean?
Are you asking what dealerships do with vehicles that they purchased at higher prices than they're worth?
I truly believe this is more of a supply line issue than consumer at this point. I have had a 2door Sasquatch ordered since May of 21 and really do not expect it to be here until late 22 if then. I also have clients that are dying for components.
If it were a consumer issue, then Ford profit would be thru the roof and we know it is not. You may be absolutely correct on other consumables though and I agree we have no idea what we are headed for but it aint good!
Those are not Biden’s fault btw, hahaha.
Dealers are having a hard time finding any inventory to put on the lot. A lot creative staggering of used inventory to make the lot seem full. Chevy dealer has quite a few work trucks, but at $10,000 over MSRP, I think businesses are just ordering and waiting for them elsewhere. Plus, I have heard they do a fine job of pissing people off. Gonna be some shakeout on that front, if inventory ever gets back to normal.
2 years worth of reduced new sales is going to keep things tight for quite a while. The Great Recession just killed the supply of used diesel trucks, same thing all over again. Around here, labor has been so tight for so long, it will have to be a major downturn for firms to let people go. Many firms working undermanned for so long could see quite a downturn just to have demand finally meet actual headcount.
2 years worth of reduced new sales is going to keep things tight for quite a while. The Great Recession just killed the supply of used diesel trucks, same thing all over again. Around here, labor has been so tight for so long, it will have to be a major downturn for firms to let people go. Many firms working undermanned for so long could see quite a downturn just to have demand finally meet actual headcount.
But there is inventory, its just not at the dealers. There are billions of dollars worth of 99.9% built vehicles just sitting. I am not sure how the automakers are carrying that on their books. Biggest problem for them will be as interest rates rise, and the economy falls, people who ordered but haven't taken delivery will back out. I just wonder what the fallout from this will be.
Fallout for the manufacturers? Nothing.
Dealers pay the manufacturer before the car shows up to sell...
I don't disagree other than to say today it is both. There is massive demand and a massive shortage of supply.
When the demand goes away, even a dwindled supply becomes sufficient--enough to make a marked impact on pricing of "higher end" goods.
Time will tell! I think we're in for a ride.
There are two things happening here, one is a bottleneck on parts, chips and sub assemblies, the other is increased demand due to a lack of cheap cash cars. This will continue for a while as we completely destroyed our supply chains and China is still struggling with manufacturing and covid issues. We also have a have an increase in demand and a shift in consumer behavior, I believe we will see elevated prices on cars for 2-3 more years.
What troubles me about this is that a working class person could go out and buy a cash car for 2-3K that would be a perfectly serviceable car that could get them from A-B. Now, that same car is 7-8K and as a result they need to take a loan on the car, which they will need to keep because they will be upside down. This dynamic is really hurting the lower end of the economy, making it harder for people to buy cheap cars.
It's impossible to find a 2-3K car, unless you buy something with 200k plus miles.
What troubles me about this is that a working class person could go out and buy a cash car for 2-3K that would be a perfectly serviceable car that could get them from A-B. Now, that same car is 7-8K and as a result they need to take a loan on the car, which they will need to keep because they will be upside down. This dynamic is really hurting the lower end of the economy, making it harder for people to buy cheap cars.
It's impossible to find a 2-3K car, unless you buy something with 200k plus miles.
Also, the European sports car makes are facing a defacto ICE ban by 2025 as a result of emission rule making, not official bans. A lot of models are simply sold out for 2 or 3 years. If the EU makes ICE impossible to sell, hard to see that model available in the USA, they will most likely just kill it off.
The 2-3k car of the future will be a Tesla model 3 with 50 mile range on a used up battery.
Yea, or I got a nice Nissan Leaf or Chevy Volt, it only goes 22 miles on a charge but price is right.
Those are insane. I do have my eyes on a couple auctions today though.
Looks the Rattler prices are going up.
The Mach E increases are rough.
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