Used-car pricing is officially insane

As I drive an '05 Scion xB, I tend to keep an eye on resale value, maybe I'll trade it in, who knows?

I drove by the Used Toyota lot the other day. They had an '05 xB, just like mine. Same miles as mine, around 60k. Theirs is an automatic, mine is a stick.

The price on the windshield of theirs: $14,477.

That is precisely THREE DOLLARS LESS than MSRP.

FOR AN EIGHT YEAR OLD CAR. WITH 60K.

Sorry for yelling. It seems beyond ridiculous. If I could find a sucker... er, buyer... for my car at the MSRP of $13,680, I would not hesitate one moment.

Stop by and see what they might give you trade-in!

Of course, my guess is a trade in of $5,500

the car market is continuing to shrink. expect it to get further down this path...

Well, no one buys new cars, so the used market will continue to shrink.

How much further can it shrink when we are hitting the point of a new car is is marginallybetter than used?

neon4891 wrote: How much further can it shrink when we are hitting the point of a new car is is marginallybetter than used?

Circular logic is circular.

I've been keeping an eye on my resale as well, I'm tempted to list my truck on cl for what I paid for it to see if anyone bites, then find something cheap bought with cash and pocket the difference.

Or I'll just keep it and hope this market holds out till the diesel wrangler shows up

step 1) put yours up for sale for slightly less than what the dealer is asking..

step 2) go to the dealer and offer them $1000 less than they are asking

step 3) $$$profit$$$

or better yet:

step1) keep yours

step 2) buy theirs

step 3) start building the car Voltron in your driveway..

I have noticed this as well.. not at the dealers.. but the used car lots. Cars I could have bought for a grand a couple of years ago are now going for several. Car, that I might add, would have been questionable at 1000 dollars

I remember for a while there you could buy a brand-new Prius for less than the average used Prius was going for. And this was when there was no wait on a new Prius! Crazy times man.

Used xB prices are pretty silly, as are used Honda Fit prices.

z31maniac wrote: Well, no one buys new cars, so the used market will continue to shrink.

Some of my friends are finding that it's cheaper to buy a new car than it is to buy a used car. You can get better financing on a new car.

mguar wrote: I've been pointing this out for a while now.. Buy new, you can buy them for little over invoice and in some cases below actual costs.. whereas when you buy used there can easily be $5000 worth of profit for the dealer..

Yup. Hooniverse agrees
http://hooniverse.com/2011/01/29/saturday-question-how-much-do-you-think-a-car-dealer-should-make-selling-a-car/

Used cars are the real profit potential for car dealers, especially “Certified Used” cars. The Manufacturer pays the dealer to get said used car up to “Standards”, and the dealer can make from as little as a 25% markup to a 100% markup or more. You really don’t know what they paid for a used car, and they can sell it at or over Kelly Blue Book (as an example).

Knurled wrote:

z31maniac wrote: Well, no one buys new cars, so the used market will continue to shrink.

Some of my friends are finding that it's cheaper to buy a new car than it is to buy a used car. You can get better financing on a new car.

That's why I bought a new truck last year instead of used like I had originally wanted to.

40k-50k mile trucks were selling for only a few thousand off new, with worse financing.......and trucks that were down in the $15k range had 150k+ miles.

If you want sick, how about trading in a (non-running) Tiburon V6/6sp on a new Focus, rolling the negative equity into the new loan, and STILL winding up with a lower monthly payment?

BTW - The Focus is getting around 38mpg and feels faster. And isn't a monthly game of What Electronics Just Failed?. He was considering a Genesis or a Rio (wide and varied tastes, here) but he decided that he was done with Korean cars.

Datsun1500 wrote: Dealers are also paying more for used cars at the moment. Just because KBB says trade in was $8000 does not mean they paid that little in this market. There is no way to say the dealer made $5,000. Assume they did pay $8,000. Average cost to recondition a car is $2,000 and assume commissions of $400. That means they made $2600. If they paid more, they made less.

This.

It's really easy to vilify used car dealers, and most of them deserve it, but they don't get out of bed one day and go "hey, I'll mark this used car up to an outrageous price."

The used dealer market, like the used retail market, is all about supply, and nice, low mileage cars fetch a huge premium at auction. You can thank cash for clunkers, the Japanese tsunami, and a crappy global economy for shrinking used car availability.

Knurled wrote: Some of my friends are finding that it's cheaper to buy a new car than it is to buy a used car. You can get better financing on a new car.

That was the case when I bought my Mazda3 5 years ago. In the middle of 2007, gas prices were up, and anything reasonably fuel efficient was pricy, particularly on the used market. I was seeing 3 hatchbacks where I live with 40,000+ miles selling at $15,500 - $16,500. I got mine new for $17,000, optioned exactly as I wanted. Well, except for the purple color. That and the manual transmission I wanted meant the car had probably sat on the lot for a while.

The financing was significantly better than what I could have had for a used car back then. Even if I had bought one at $15,500, the $1500 I would have saved would have been more than offset by the savings I got by a better interest rate. Actually, I saved that much by financing with Mazda instead of my credit union on a new car loan. It doesn't surprise me that there are times when new cars are cheaper.

Your dealer is insane. Not that used prices aren't crazy right now, but nobody's paying that much for that car. Here's a sub $10k "dealer only" search. Maybe his strategy was "put insanely high price on car, wait for jackhole to get his blood pressure up and scream 'you can't charge that much!' then ask said jackhole "Well how much would YOU pay, sir?"

I've seen stranger E36 M3.

http://atlanta.craigslist.org/search/ctd?query=Xb&srchType=T&minAsk=11&maxAsk=10000

I'm about a year out from buying a first car for/with Dear Daughter #2. I've started looking already. Haven't found anything I'd own for less than $5k and I'm not happy about putting out that much on a first car.

I even gave up on the price cap (just to see) and I haven't found a single Mazda3 for sale at all in a moderate radius of my house.

neon4891 wrote: How much further can it shrink when we are hitting the point of a new car is is marginallybetter than used?

FWIW, the new car market is barely over the number of cars that are permanently removed from the road, which is somewhere in the 12-14M per year in the US. It's going to be a few more years until the projections put new car sales at cars removed plus population growth.

There will always be a new car market.

it worked out for me. i had bought my '03 maxima in '06 for $3000 after someone hit a deer with it.

i fixed it for $2000, drove it until last month (that's six years if you're terrible at math), and sold it with 166k miles on it for $4300.

used the money to put a good downpayment on a new mazda 3 at 2.9% win!

One of the dealers in town here has a 2004 RX8 advertised for $13k, and that's a slushbox model with close to 70k on the clock.

I don't think the pseudo-bling rims explain the price.

Dealer trade on my 2012 Tacoma is $250 less than I paid for it. My local dealer has a 2010 Tacoma listed for $30500 sitting next to the same truck brand new with an msrp of you guessed it 30500...
I really don't fault the dealers I'm just wondering who buys these cars that generates this market.

Knurled wrote:

z31maniac wrote: Well, no one buys new cars, so the used market will continue to shrink.

Some of my friends are finding that it's cheaper to buy a new car than it is to buy a used car. You can get better financing on a new car.

My dad bought a new Fit instead of used because a couple year old one out of warranty was only $1000 less than a new one with a warranty. I have a feeling that the Japanese cars with their really high resale value (Honda and Toyota especially), buying new is probably cheaper than buying used. Sucks, because my next car will probably have to be a first-gen Fit

nocones wrote: I really don't fault the dealers I'm just wondering who buys these cars that generates this market.

this

Well, 3 years ago I paid $11.5k with 22,000 miles. If I could get a quick 10k, I'd be off to the Fiat dealer like a shot.

Anybody want a fly-n-drive Vegas vacation?