6 ms·

The market still hasn't budged in used car pricing though. JD power's report from last week only showed a 2% decline in prices. Wonder if/when prices will act

The market still hasn't budged in used car pricing though. JD power's report from last week only showed a 2% decline in prices. Wonder if/when prices will actually be affected by this.

Balgair 6y ago
Where is that source? I'm in the market for a used car and would love a good source for data!
- flyGuyOnTheSly 6y ago
  If you're looking for a decent used car, watch some Scotty Kilmer videos on youtube. He reviews used car makes and models all the time. Claims he has never purchased a new car in his entire life of being a mechanic of 50+ years.
- papermachete 6y ago
  You can also try ChrisFix for when fit hits the shan or general maintenance. It's really simple...
- mips_avatar 6y ago
  Found it! Here's where I read it: https://www.freep.com/story/money/cars/2020/04/23/buying-car-next-few-months/2997012001/ https://www.freep.com/story/money/cars/2020/04/23/buying-car...
Zimahl 6y ago
Why would used cars drop in price? Since no one is buying new cars there's no supply of used cars. Lower supply means increased prices but demand is probably down as well so almost no change.
- Guest42 6y ago
  I think that lending will be tightening up as well.
  - vkou 6y ago
    If you're buying a used car from a private party, you're not doing it on financing. If you're buying a used car from a dealer, with financing, you must be truly desperate. A lot of people are desperate, though...
    - loeg 6y ago
      When I bought my current used car, in cash, the dealer offered it on financing for 0% or 0.9% or something very low — no impact on the selling price. It wouldn't have been a terrible decision to take the super low interest loan and put the purchase money into my investment portfolio instead (just another form of leverage). I paid cash anyway, because I went in intending to, but characterizing all financing as extremely desperate is misguided.
    - beefalo 6y ago
      Credit unions will finance used cars at 2%
- ASinclair 6y ago
  There is a big supply of used cars coming. Rental agencies are offloading cars because they have storage issues with nobody renting their vehicles. However, lots of the car auctions are closed so that could prevent the prices from coming down.
- soperj 6y ago
  Because no one is buying used cars either, and people who can't afford the car they have are selling them. Supply/Demand when there is no demand.
- hourislate 6y ago
  Leases come due. Cars hit the used market. You also have rental companies dumping cars onto the market since business has collapsed. Hertz might be going into bankruptcy. Repo's are another thing to consider along with private sales when people can't afford them or need to raise money.
- adventured 6y ago
  They're actually about to reduce used vehicle supply to artificially inflate market conditions above where they're going to sink to. The corporate gangsters in Detroit are working on Cash For Clunkers part 2 (which will harm the poorest vehicle buyers the most over the span of years as supply is reduced, just as it did last time). https://www.barrons.com/articles/get-ready-for-mega-cash-for-clunkers-morgan-stanleys-adam-jonas-says-51587295800 https://www.barrons.com/articles/get-ready-for-mega-cash-for...
kart23 6y ago
Doubt used will be impacted at all, if much. People are always looking for good deals on used cars, and most sellers dont immediately need to get rid of them, they can wait for a year or half a year and wont really depreciate that much.
- lozaning 6y ago
  Used is supposed to get slaughtered: https://www.zerohedge.com/news/2017-03-31/heres-why-used-car-prices-may-crash-50 https://www.zerohedge.com/news/2017-03-31/heres-why-used-car... If you're a person with an old truck you'd like to get rid of, yea maybe you can wait 2 years to sell it. If you're a BMW dealership that got 120 cars back from lease this month, and you're going to get 120 more next month, and next month, and next month...
  - tempestn 6y ago
    On the other hand, in recessions a lot of demand can shift from new to used. That might partially counteract the fact that used supply is less flexible than new.
  - kart23 6y ago
    The article was written in 2017... And it's predictions were pretty much completely wrong. It's crashed this month, but the used car market has been inflated for a while now. I'm in the market for a new (used) car, and haven't really seen any good prices honestly. Should I just wait longer? https://publish.manheim.com/content/dam/consulting/ManheimUsedVehicleValueIndex-LineGraph.png https://publish.manheim.com/content/dam/consulting/ManheimUs...
CryoLogic 6y ago
I bought recently from a dealership that was going out of business right by an upscale university and negotiated about $3500 off of MSRP on a new car. They told me they had to lay off around half their staff due to Covid. The deals are out there you just have to look for them.
- driverdan 6y ago
  Without more context that may not be a good price. Ignore MSRP. Never pay over invoice.
  - izacus 6y ago
    Yeah, I've seen BMW/Mercedes dealers drop prices for a much as 20% which can easily be 10-20k off the listed price.
  - gambiting 6y ago
    The good rule to live by is you should always be able to negotiate at least 10% off a new car. If one dealer isn't willing to negotiate, go to a different one. Helped loads of people negotiate prices for their new car and 10% is always achievable. The only brand where you can't is KIA - they just flat out don't negotiate, KIA UK sets prices and that's what you pay. The dealership might throw servicing or some accessories to sweeten the deal but there's nothing they can do about the price.
    - lotsofpulp 6y ago
      The only rule I know of is supply and demand. If there’s sufficient demand for a product, the seller has no reason to offer anything off. The proof will be that you won’t be able to find a seller willing to sell it. Before the corona virus stuff, there were certain car models that you didn’t really negotiate much over, such as TRD 4Runners and Tacomas. Tesla also doesn’t offer 10% off or haggle if I recall. I’m sure they would if they needed to move product, but I don’t know anyone who got any discounts for a Tesla.
      - 6y ago
mschuster91 6y ago
> The market still hasn't budged in used car pricing though. Last thing people want to do now is buying (or worse, financing) a new multi-ten-thousand dollar car. Unless your car is falling apart or you desperately need money you should absolutely keep your car, which is why there are not enough sellers to force a price downturn for used cars. For new cars the situation is similar but different - a new car doesn't lose much value until it has been sold. When a car company / dealership can afford to ride out for half a year until the consumer side stabilizes, why should they discount or even take a loss?
tssva 6y ago
Used car supplies are lower now only because like everything else auto auctions have for the moment mostly come to a halt. The supply of used cars awaiting auction is swelling from rental companies wanting to dump inventory and cars coming off lease. Once the auto auctions return to normal expect a significant drop in the price of used cars.
- MrFoof 6y ago
  >The supply of used cars awaiting auction is swelling from rental companies wanting to dump inventory and cars coming off lease Though some dealership are increasing their attempted shenanigans to keep those lease returns from coming back for as long as possible [1]. Some of the annual new car sales projections coming out in the past day or two are daunting, so it'll be interesting to see how it pans out. There's been a few estimates that the previously forecast 17M units for 2020 (with an ASP of ~$38,000) may be more like 7.7M units for 2020, which is a $350B industry revenue shortfall. [1] https://www.usatoday.com/story/money/2020/04/16/coronavirus-lease-car-returns-tough-lenders-refuse-accept-autos/5120328002/ https://www.usatoday.com/story/money/2020/04/16/coronavirus-...
ip26 6y ago
Supposedly the value has plummeted but the asking price has not - the result, no sales. The seller(s) aren't willing to take the loss to move inventory & are trying to wait out what they hope is a temporary dip. Kind of like the recent oil prices, once people finally ran out of places to store the good the price will have to fall.

The market still hasn't budged in used car pricing though. JD power's report from last week only showed a 2% decline in prices. Wonder if/when prices will actually be affected by this.

Balgair 6y ago

Where is that source? I'm in the market for a used car and would love a good source for data!

flyGuyOnTheSly 6y ago
If you're looking for a decent used car, watch some Scotty Kilmer videos on youtube. He reviews used car makes and models all the time. Claims he has never purchased a new car in his entire life of being a mechanic of 50+ years.
papermachete 6y ago
You can also try ChrisFix for when fit hits the shan or general maintenance. It's really simple...
mips_avatar 6y ago
Found it! Here's where I read it: https://www.freep.com/story/money/cars/2020/04/23/buying-car-next-few-months/2997012001/ https://www.freep.com/story/money/cars/2020/04/23/buying-car...

Zimahl 6y ago

Why would used cars drop in price? Since no one is buying new cars there's no supply of used cars. Lower supply means increased prices but demand is probably down as well so almost no change.

Guest42 6y ago
I think that lending will be tightening up as well.
- vkou 6y ago
  If you're buying a used car from a private party, you're not doing it on financing. If you're buying a used car from a dealer, with financing, you must be truly desperate. A lot of people are desperate, though...
  - loeg 6y ago
    When I bought my current used car, in cash, the dealer offered it on financing for 0% or 0.9% or something very low — no impact on the selling price. It wouldn't have been a terrible decision to take the super low interest loan and put the purchase money into my investment portfolio instead (just another form of leverage). I paid cash anyway, because I went in intending to, but characterizing all financing as extremely desperate is misguided.
  - beefalo 6y ago
    Credit unions will finance used cars at 2%
ASinclair 6y ago
There is a big supply of used cars coming. Rental agencies are offloading cars because they have storage issues with nobody renting their vehicles. However, lots of the car auctions are closed so that could prevent the prices from coming down.
soperj 6y ago
Because no one is buying used cars either, and people who can't afford the car they have are selling them. Supply/Demand when there is no demand.
hourislate 6y ago
Leases come due. Cars hit the used market. You also have rental companies dumping cars onto the market since business has collapsed. Hertz might be going into bankruptcy. Repo's are another thing to consider along with private sales when people can't afford them or need to raise money.
adventured 6y ago
They're actually about to reduce used vehicle supply to artificially inflate market conditions above where they're going to sink to. The corporate gangsters in Detroit are working on Cash For Clunkers part 2 (which will harm the poorest vehicle buyers the most over the span of years as supply is reduced, just as it did last time). https://www.barrons.com/articles/get-ready-for-mega-cash-for-clunkers-morgan-stanleys-adam-jonas-says-51587295800 https://www.barrons.com/articles/get-ready-for-mega-cash-for...

kart23 6y ago

Doubt used will be impacted at all, if much. People are always looking for good deals on used cars, and most sellers dont immediately need to get rid of them, they can wait for a year or half a year and wont really depreciate that much.

lozaning 6y ago
Used is supposed to get slaughtered: https://www.zerohedge.com/news/2017-03-31/heres-why-used-car-prices-may-crash-50 https://www.zerohedge.com/news/2017-03-31/heres-why-used-car... If you're a person with an old truck you'd like to get rid of, yea maybe you can wait 2 years to sell it. If you're a BMW dealership that got 120 cars back from lease this month, and you're going to get 120 more next month, and next month, and next month...
- tempestn 6y ago
  On the other hand, in recessions a lot of demand can shift from new to used. That might partially counteract the fact that used supply is less flexible than new.
- kart23 6y ago
  The article was written in 2017... And it's predictions were pretty much completely wrong. It's crashed this month, but the used car market has been inflated for a while now. I'm in the market for a new (used) car, and haven't really seen any good prices honestly. Should I just wait longer? https://publish.manheim.com/content/dam/consulting/ManheimUsedVehicleValueIndex-LineGraph.png https://publish.manheim.com/content/dam/consulting/ManheimUs...

CryoLogic 6y ago

I bought recently from a dealership that was going out of business right by an upscale university and negotiated about $3500 off of MSRP on a new car. They told me they had to lay off around half their staff due to Covid. The deals are out there you just have to look for them.

driverdan 6y ago
Without more context that may not be a good price. Ignore MSRP. Never pay over invoice.
- izacus 6y ago
  Yeah, I've seen BMW/Mercedes dealers drop prices for a much as 20% which can easily be 10-20k off the listed price.
- gambiting 6y ago
  The good rule to live by is you should always be able to negotiate at least 10% off a new car. If one dealer isn't willing to negotiate, go to a different one. Helped loads of people negotiate prices for their new car and 10% is always achievable. The only brand where you can't is KIA - they just flat out don't negotiate, KIA UK sets prices and that's what you pay. The dealership might throw servicing or some accessories to sweeten the deal but there's nothing they can do about the price.
  - lotsofpulp 6y ago
    The only rule I know of is supply and demand. If there’s sufficient demand for a product, the seller has no reason to offer anything off. The proof will be that you won’t be able to find a seller willing to sell it. Before the corona virus stuff, there were certain car models that you didn’t really negotiate much over, such as TRD 4Runners and Tacomas. Tesla also doesn’t offer 10% off or haggle if I recall. I’m sure they would if they needed to move product, but I don’t know anyone who got any discounts for a Tesla.
    - 6y ago

mschuster91 6y ago

> The market still hasn't budged in used car pricing though. Last thing people want to do now is buying (or worse, financing) a new multi-ten-thousand dollar car. Unless your car is falling apart or you desperately need money you should absolutely keep your car, which is why there are not enough sellers to force a price downturn for used cars. For new cars the situation is similar but different - a new car doesn't lose much value until it has been sold. When a car company / dealership can afford to ride out for half a year until the consumer side stabilizes, why should they discount or even take a loss?

tssva 6y ago

Used car supplies are lower now only because like everything else auto auctions have for the moment mostly come to a halt. The supply of used cars awaiting auction is swelling from rental companies wanting to dump inventory and cars coming off lease. Once the auto auctions return to normal expect a significant drop in the price of used cars.

MrFoof 6y ago
>The supply of used cars awaiting auction is swelling from rental companies wanting to dump inventory and cars coming off lease Though some dealership are increasing their attempted shenanigans to keep those lease returns from coming back for as long as possible [1]. Some of the annual new car sales projections coming out in the past day or two are daunting, so it'll be interesting to see how it pans out. There's been a few estimates that the previously forecast 17M units for 2020 (with an ASP of ~$38,000) may be more like 7.7M units for 2020, which is a $350B industry revenue shortfall. [1] https://www.usatoday.com/story/money/2020/04/16/coronavirus-lease-car-returns-tough-lenders-refuse-accept-autos/5120328002/ https://www.usatoday.com/story/money/2020/04/16/coronavirus-...

ip26 6y ago

Supposedly the value has plummeted but the asking price has not - the result, no sales. The seller(s) aren't willing to take the loss to move inventory & are trying to wait out what they hope is a temporary dip. Kind of like the recent oil prices, once people finally ran out of places to store the good the price will have to fall.