Used-car pricing is officially insane

belteshazzar wrote:

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

this

I agree, it has been a rough few years for a lot of dealerships and I don't fault them for squeezing every last dime of profit out of every car that crosses their paths.

One thing most everyone is missing: asking price is not necessarily what it sells for. There's sometimes people like mguar cited, i.e. they overpay for used without doing their due diligence and get stuck but that's the exception.

Of course, there was the guy who bought a 240D for ~$1800, spent ~$1200 at our shop on it, then sold the car. I didn't see it for a month or two, then it shows up with a new driver in the saddle. The new owner said he paid $4900.00 for it.

I was looking at used Accords and Impalas and decided to buy a base model, option less new Accord for $18800 plus tax/title and at 0.9% 60 months.

I talked to banks and they were in the 5-6% rate for the used $15-16000 cars. I spent $3500 more and got a 2-3 year newer car.

700,000 cars were destroyed under Cash-for-Clunkers.

We all knew it would force up used car prices.

nocones wrote: 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.

KBB.com also shows my dealer trade-in at within $200 of what I paid for my 2011 Frontier Pro-4X with the Luxury package last year. I paid $26,600 and KBB trade-in is showing $26,450.

That's all well and good, but when I called around about trading it in on a new full-size truck 6-8 weeks ago, they were all starting around $22,000 for trade-in.

So like others have mentioned, asking price/trade-in "value" aren't necessarily representative of the actual market.

C4C got a lot of really crappy vehicles, mainly SUVs that we're really not going to miss because screw SUVs.

SVreX wrote: 700,000 cars were destroyed under Cash-for-Clunkers. We all knew it would force up used car prices.

Which, of 12M, is merely 5.6%. Of one year. Back in 2008.

Yea, very, very insignificant, especially in 2012.

So nice try at a flouder, Mr conservative.

Haha!

I seem to remember plenty of folks around here who had issues with it, Mr. Liberal.

Nice try, but I've voted for very few Republicans. I only remember twice.

Obviously it is a small percentage.

What's 12M?

SVreX wrote: Haha! I seem to remember plenty of folks around here who had issues with it, Mr. Liberal. Nice try, but I've voted for very few Republicans. I only remember twice. Obviously it is a small percentage. What's 12M?

As I've pointed out before, 12M is the number of cars that are permanently removed from the US roads annually.

C4C is political, and you've consisently had a conservative bent. So, again, nice try at a flounder.

BTW, the program was actually stopped at 600k. 5% of cars permantly removed from the road 4 years ago.

Pardon me. Bottom line is that I don't read everything you write. Imagine that.

I offered information that was car related and contributed to the problem being discussed. Very small contribution, true. But relevant. I couldn't care less about floundering the subject.

You, however, took an enormous flounder when you started the political name calling.

Cut the crap, Eric.

Here's my take on the used car market.

Economy is down... Therefore demand for used cars is high, and therfore prices are going up.

People hold on to their "good" cars longer and therefore create a tighter market for lower mileage used cars.. So the cars getting to the market have higher mileage.

also, Dealers are trying to make a buck..

It's the market.

alfadriver wrote:

SVreX wrote: Haha! I seem to remember plenty of folks around here who had issues with it, Mr. Liberal. Nice try, but I've voted for very few Republicans. I only remember twice. Obviously it is a small percentage. What's 12M?

As I've pointed out before, 12M is the number of cars that are permanently removed from the US roads annually. C4C is political, and you've consisently had a conservative bent. So, again, nice try at a flounder. BTW, the program was actually stopped at 600k. 5% of cars permantly removed from the road 4 years ago.

Not to mention that only vehicles with poor gas mileage (18 city or worse IIRC) were even eligible to be clunked. Most of the previous conversation in the thread regarded pricing on used recent model economy cars, none of which got anywhere near the clunker pile. (FWIW, I don't think the program was a good idea either)

z31maniac wrote:

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.

Trucks have traditionally had great resale values. If you are planning on keeping it a long time, a new truck often makes a lot more sense than a used one, especially when you consider how they are sometimes used.

PICKUPS hold their value. Large SUVs don't.

Apparently a 2003 K1500 with a 4.8 and no options is worth the same as a 2008 Yukon with everything on it.

Josh wrote: Most of the previous conversation in the thread regarded pricing on used recent model economy cars, none of which got anywhere near the clunker pile. (FWIW, I don't think the program was a good idea either)

I can accept that.

Don't mind being wrong. I appreciate you setting me straight.

I DO mind getting jumped with political name-calling BS like the other guy did.

You are right. It is not the primary focus of this thread.

Knurled wrote: PICKUPS hold their value. Large SUVs don't. Apparently a 2003 K1500 with a 4.8 and no options is worth the same as a 2008 Yukon with everything on it.

I JUST noticed this too! Shopping for my FIL to find a new "grandkids friendly" truck. I can get a nice newer Suburban for way less than an older pickup. Now to convince him that he doesn't need a truck bed (his camper shell stays on his current truck, so I'm part way there).

Same thing happening around here, and we don't get used cars from the US market so no C4C influence. In the last few years I've seen the little used dealerships putting sticker prices on cars that are 2-3x what I'd consider sane.

bravenrace wrote: Trucks have traditionally had great resale values. If you are planning on keeping it a long time, a new truck often makes a lot more sense than a used one, especially when you consider how they are sometimes used.

I traded in an '01 Ram 4X4 last February on my Mustang. KBB was just over $2,000 for a trade-in. Dealer gave me $4,000 for it.

This is why I don't buy at a dealership, and I've had great luck getting amazing cars for cheap. If I was looking at a $15,000 economy car there's no way I would buy used, but looking at a $50,000 luxury car for $3,000 then yes I'm buying used.

Cash for clunkers had nothing to do with the used car prices now, it involved so few cars and of such a specific type that it doesn't impact the pricing of, say, a Scion xB. No need to turn it political, it was just a drop in the bucket as far as the number of cars we have on the road - and off the road - in the US.

I think airbags is having a lot to do with supply and demand.
In the newer cars of a few years old, if the two fronts and a side airbag or two are set off the car can very easily be a 'total."
In years past, these cars with similar damage (but no airbags) would be mended and still be on the road.

I suppose i am one of those people who sees the economy down, with uncertainty ahead, and is holding onto a vehicle longer than i usually do. BUT, to me, there really isn't anything that i want to go into hock for on offer at the moment that has any more of what i think i need than i have now.

while i'd love another sporty car like a new ms3 (or hell, an "old" ms3) or the new toyobaru, i can't take them offroading or camping very well, and i don't have the space/time/money to buy an extra "fun" car, so i'm waiting for something really compelling to come along and convince me to buy a new car. the mini cooper SD i rented in the UK a couple weeks ago might have me down at the dealer like now if they sold it over here, but word is we will have to wait at least till 2014 for it.

Knurled wrote: PICKUPS hold their value. Large SUVs don't. Apparently a 2003 K1500 with a 4.8 and no options is worth the same as a 2008 Yukon with everything on it.

Trucks is trucks. When a truck is 12 or even 15 years old, if it's still running, it's still useful. Even on it's last legs, somebody wants to drive an old crappy truck around to collect scrap. I see them all the time.

An SUV, especially the fancier ones, gets old and beat up and useless way quicker.

Been thinking about replacing my 97 Saturn SC2. Bought it about 4 years ago w/ 96K on the clock for $2500. A good deal for a clean southern car. Now it has 167K on it and is worth about ...$2500 if I comparison shop on CL. So sell it and enjoy 70k of "free" driving right? Well that sounds good until you try to buy another car on a $2500 budget. I'd just wind up with the same thing I already have. Might as well keep it since I know it's been taken care of and not crashed.

Datsun1500 wrote:

Curmudgeon wrote: Of course, there was the guy who bought a 240D for ~$1800, spent ~$1200 at our shop on it, then sold the car. I didn't see it for a month or two, then it shows up with a new driver in the saddle. The new owner said he paid $4900.00 for it.

But is that really a bad thing? It sounds like the new owner got a sorted 240D for a reasonable price, and the guy that had the knowledge and the money to float made a reasonable profit. In other words, just because the previous guy had $3000 in it does not necessarily mean it was a bad purchase for the new guy, or that it is not worth $5000

True. But I neglected to mention that I lightened the guy's wallet by about another $1500 on stuff that Owner # 1 declined or had patched himself. So his $4900 car became a $6400 car.

I don't think there's a 240D worth $6400 on the planet.

maybe prices are being driven up by dealerships need to swallow negative equity. "sure we can get you out of your current loan, just pay 95% of original msrp on this four year old car."