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Consequently, why are used sellers so out of touch, for cars or anything else? I love the idea of buying and selling used, but people ask too much relative to t

Consequently, why are used sellers so out of touch, for cars or anything else? I love the idea of buying and selling used, but people ask too much relative to the new price.

kemayo 1y ago
It's difficult to decouple your knowledge of how much you paid for something. Even if you intellectually know the fair market value of something is now 0.1x what you paid for it, it can still feel like you're just losing all that money by accepting that price.
- nostrademons 1y ago
  Yeah. This is called "anchoring" in behavioral economics research. People can't let go of the price they last paid for the good as the "correct" price, and so are reluctant to drop to the true market-clearing price. This is also why cereal makers rely on shrinkflation to raise prices, and why home prices are sticky downwards, and why companies resort to layoffs rather than wage cuts. In an individual consumer's mind, prices should stay the same.
- saltcured 1y ago
  I think this is also a baby step away from one basis for hoarding behavior. The hoarder cannot see the many cases where the loss of value has already happened whether you retain the item or discard it. They think the full loss is realized the moment it is discarded.
rootusrootus 1y ago
If they are out of touch, then the cars aren't selling, right? Because if they are selling for that price, then by definition you are out of touch and the sellers know what the market will bear.
- the__alchemist 1y ago
  Have you bought or sold used recently? You can find a fair price, but it's a big time commitment, and stressful.
  - brokencode 1y ago
    Plenty of people must find this worthwhile, otherwise sellers wouldn’t be able to find buyers and they’d be forced to reduce price if they want to sell. Plus, the listed price is often aspirational. Savvy buyers will typically negotiate the price down. I have to admit that I’m not a savvy buyer and always buy new though. But I know people who do this very successfully.
  - Marsymars 1y ago
    I felt like my new factory order car buy recently was a big time commitment and stressful to get a fair price.
  - fluoridation 1y ago
    That's how it goes in my experience with the used market, for anything, really. People go online, browse around the listings to get a feel of the prices, and post a price based on that. That's a mistake. The prices that are easy to find and most common are for the items that aren't moving. When someone finally posts an item at a price that buyers are willing to pay it usually gets sold in a few days, if it's something in demand. I've only ever found good deals on used stuff by pure chance or by watching the market over weeks. It takes both patience and decisiveness, otherwise someone else swoops in before you.
    - rootusrootus 1y ago
      All of this is just a way of saying that the market does not agree with someone's personal opinion on value. "That's a mistake" sounds right but if the market is willing to pay, then was it really a mistake? > I've only ever found good deals on used stuff by pure chance or by watching the market over weeks. It takes both patience and decisiveness, otherwise someone else swoops in before you. That sounds like it is exactly how things are supposed to work. If the average price were a good deal, it would by definition not be a good deal. It should take some work or some waiting, if you want that price.
- Auracle 1y ago
  My friend told me that his in-laws absolutely refuse to buy a new car, as their whole lives they’ve been told it’s an awful deal. Instead, they’ll get something a couple of years old and save maybe a few thousand dollars on a $40,000 vehicle. It drives him batty. So, I’d say there’s a potential the used buyers are the ones out of touch, and that people like those in-laws probably aren’t buying EVs.
  - mixmastamyk 1y ago
    There was a big change in the used market after Covid, that may not have fully worked itself out yet.
  - BeetleB 1y ago
    > Instead, they’ll get something a couple of years old and save maybe a few thousand dollars on a $40,000 vehicle. A used 2 year old Ioniq 5 is selling for about $15-20K less than MSRP. Some years ago, a friend bought a 2 year old Forester - for a full $10K less than MSRP. It's not a "few thousand dollars". (Oh, and personally, if you buy a 2 year old car - you're paying way too much. 6-8 year old cars are a good value).
    - potato3732842 1y ago
      >It's not a "few thousand dollars". It is if you're buying a 4Runner or top of the line diesel pickup or some other meme car that people buy because of how great the internet says it is. But in the general case I agree with you.
    - bhelkey 1y ago
      >> people like those in-laws probably aren’t buying EVs. > A used 2 year old Ioniq 5 is selling for about $15-20K less than MSRP...It's not a "few thousand dollars". The Ioniq 5 is an electric vehicle. The whole point of this article is that EVs depreciate significantly faster than Internal Combustion Engine vehicles. A brand new ICE vehicle depreciates quickly but not to the point of losing 50% in 2 years. >6-8 year old cars are a good value Agree.
kube-system 1y ago
Sellers might be out of touch with your sensibilities but they are not out of touch with their own market. Used sellers ask that much because buyers are willing to pay that much.
potato3732842 1y ago
>why are used sellers so out of touch Math. You don't see what sells because it's no longer on the market. A vehicle that sells in 1mo is on the market 30x longer, seen by 30x more people, etc, etc, than one that sells in 1d and only takes 1/30th as many of them on the market to fill up your FBMP feed. Now, not a lot of cars are priced to sell in 1d, but also 30d is a comically low upper bound as well. Adjust the numbers as you see fit.
nyrikki 1y ago
There are multiple reasons. 1) A large segment of people make purchase decisions based on payment schedules rather than the total cost of driving or even residual value. 2) Today 2/3 of car loans are are 72 months, meaning that even for lower depreciation rate cars, private sellers are often under water, and may not have the resources to pay off the gap with current market value. [0] 3) Banks have responded with 1/5 new-vehicle loans being 84 months or longer, adding to the problem 4) For around the ~40 years I have been paying attention, private sellers almost always think they should get the dealer price and not the private party price. There are other reasons, but we are in a situation where it would be amazing of we avoid another 2009 like crash in the market. [0] https://www.edmunds.com/industry/press/underwater-and-sinking-deeper-the-average-amount-owed-on-upside-down-auto-loans-climbed-to-an-all-time-high-of-6905-according-to-edmunds.html https://www.edmunds.com/industry/press/underwater-and-sinkin...

Consequently, why are used sellers so out of touch, for cars or anything else? I love the idea of buying and selling used, but people ask too much relative to the new price.

kemayo 1y ago

It's difficult to decouple your knowledge of how much you paid for something. Even if you intellectually know the fair market value of something is now 0.1x what you paid for it, it can still feel like you're just losing all that money by accepting that price.

nostrademons 1y ago
Yeah. This is called "anchoring" in behavioral economics research. People can't let go of the price they last paid for the good as the "correct" price, and so are reluctant to drop to the true market-clearing price. This is also why cereal makers rely on shrinkflation to raise prices, and why home prices are sticky downwards, and why companies resort to layoffs rather than wage cuts. In an individual consumer's mind, prices should stay the same.
saltcured 1y ago
I think this is also a baby step away from one basis for hoarding behavior. The hoarder cannot see the many cases where the loss of value has already happened whether you retain the item or discard it. They think the full loss is realized the moment it is discarded.

rootusrootus 1y ago

If they are out of touch, then the cars aren't selling, right? Because if they are selling for that price, then by definition you are out of touch and the sellers know what the market will bear.

the__alchemist 1y ago
Have you bought or sold used recently? You can find a fair price, but it's a big time commitment, and stressful.
- brokencode 1y ago
  Plenty of people must find this worthwhile, otherwise sellers wouldn’t be able to find buyers and they’d be forced to reduce price if they want to sell. Plus, the listed price is often aspirational. Savvy buyers will typically negotiate the price down. I have to admit that I’m not a savvy buyer and always buy new though. But I know people who do this very successfully.
- Marsymars 1y ago
  I felt like my new factory order car buy recently was a big time commitment and stressful to get a fair price.
- fluoridation 1y ago
  That's how it goes in my experience with the used market, for anything, really. People go online, browse around the listings to get a feel of the prices, and post a price based on that. That's a mistake. The prices that are easy to find and most common are for the items that aren't moving. When someone finally posts an item at a price that buyers are willing to pay it usually gets sold in a few days, if it's something in demand. I've only ever found good deals on used stuff by pure chance or by watching the market over weeks. It takes both patience and decisiveness, otherwise someone else swoops in before you.
  - rootusrootus 1y ago
    All of this is just a way of saying that the market does not agree with someone's personal opinion on value. "That's a mistake" sounds right but if the market is willing to pay, then was it really a mistake? > I've only ever found good deals on used stuff by pure chance or by watching the market over weeks. It takes both patience and decisiveness, otherwise someone else swoops in before you. That sounds like it is exactly how things are supposed to work. If the average price were a good deal, it would by definition not be a good deal. It should take some work or some waiting, if you want that price.
Auracle 1y ago
My friend told me that his in-laws absolutely refuse to buy a new car, as their whole lives they’ve been told it’s an awful deal. Instead, they’ll get something a couple of years old and save maybe a few thousand dollars on a $40,000 vehicle. It drives him batty. So, I’d say there’s a potential the used buyers are the ones out of touch, and that people like those in-laws probably aren’t buying EVs.
- mixmastamyk 1y ago
  There was a big change in the used market after Covid, that may not have fully worked itself out yet.
- BeetleB 1y ago
  > Instead, they’ll get something a couple of years old and save maybe a few thousand dollars on a $40,000 vehicle. A used 2 year old Ioniq 5 is selling for about $15-20K less than MSRP. Some years ago, a friend bought a 2 year old Forester - for a full $10K less than MSRP. It's not a "few thousand dollars". (Oh, and personally, if you buy a 2 year old car - you're paying way too much. 6-8 year old cars are a good value).
  - potato3732842 1y ago
    >It's not a "few thousand dollars". It is if you're buying a 4Runner or top of the line diesel pickup or some other meme car that people buy because of how great the internet says it is. But in the general case I agree with you.
  - bhelkey 1y ago
    >> people like those in-laws probably aren’t buying EVs. > A used 2 year old Ioniq 5 is selling for about $15-20K less than MSRP...It's not a "few thousand dollars". The Ioniq 5 is an electric vehicle. The whole point of this article is that EVs depreciate significantly faster than Internal Combustion Engine vehicles. A brand new ICE vehicle depreciates quickly but not to the point of losing 50% in 2 years. >6-8 year old cars are a good value Agree.

kube-system 1y ago

Sellers might be out of touch with your sensibilities but they are not out of touch with their own market. Used sellers ask that much because buyers are willing to pay that much.

potato3732842 1y ago

>why are used sellers so out of touch Math. You don't see what sells because it's no longer on the market. A vehicle that sells in 1mo is on the market 30x longer, seen by 30x more people, etc, etc, than one that sells in 1d and only takes 1/30th as many of them on the market to fill up your FBMP feed. Now, not a lot of cars are priced to sell in 1d, but also 30d is a comically low upper bound as well. Adjust the numbers as you see fit.

nyrikki 1y ago

There are multiple reasons. 1) A large segment of people make purchase decisions based on payment schedules rather than the total cost of driving or even residual value. 2) Today 2/3 of car loans are are 72 months, meaning that even for lower depreciation rate cars, private sellers are often under water, and may not have the resources to pay off the gap with current market value. [0] 3) Banks have responded with 1/5 new-vehicle loans being 84 months or longer, adding to the problem 4) For around the ~40 years I have been paying attention, private sellers almost always think they should get the dealer price and not the private party price. There are other reasons, but we are in a situation where it would be amazing of we avoid another 2009 like crash in the market. [0] https://www.edmunds.com/industry/press/underwater-and-sinking-deeper-the-average-amount-owed-on-upside-down-auto-loans-climbed-to-an-all-time-high-of-6905-according-to-edmunds.html https://www.edmunds.com/industry/press/underwater-and-sinkin...