I’m sure you guys have noticed the increase in used car prices over the last year. I want to get your opinions if you think this is a bubble or something that with continue for quite some time. We are paying over NADA/Black Book retail value in many cases for vehicles and have been for some time. The good thing is that we are trading people out of 2-3 year old vehicles for very little.
I think this is going to continue because the new car and fleet numbers have been nearly cut in half so you’ll have basic supply and demand related pricing. The other thing we have been seeing is the lowering of rebates by all manufacturers which will keep residual values higher and thus keeping wholesale values high. Frankly, I’m very pleased to see almost every new car manufacturer drop the total days supply of vehicles to around 60 which will stop the “oh my god we have too many cars we need to firesale them” crap which has been happening for years and driving used car prices down drastically.
Basically… fewer rebates + fewer fleet + lower production #'s = higher used vehicle values over the long term
Being in the biz(sorta) i have numerous friends/customers that are having a hard time and complaining abourt not having sold a car /s in forever (used dealers). thats a tough business i feel for dealers.
It sucks because I’m looking for a few year old TrailBlazer or Grand Cherokee and feel like they price of them are raping me.
And the prices on used vehicles are getting close to the cost of getting into a new vehicle, which lease or buy rates are ridiculous compared to 3 years ago.
Private party is not always the best bet. It is very easy to buy a car from an individual and go to have it inspected only to find out it needs ball joints, tie-rods, tires (because the worn suspension parts made the tires wear prematurely) and that check engine light that was on and you assumed was a simple sensor ends up being bad catalytic converters…$$ Like you said, they are getting rid of them for a reason, right?
Well when you buy a vehicle from a dealer, usually all of this stuff is taken care of in order to pass inspection for their buyer. This is especially the case for new york dealers because of all of the lemon law bullshit and warranty. (Some states dealers can sell you a car as-is, literally. Not the case in New York)
And I don’t know what dealers you are referring to as marking their cars up that much. Maybe new car stores that have a pre-owned inventory?? It’s definitely not how it used to be. The used car business is very competitive, I have to pay a lot for my cars and I am not able to mark them up much or I would never sell them.
I guess what I’m trying to say is that buying a car from a private individual can quickly turn into a nightmare if you don’t know what you are doing (the majority of the consumers out there)…So buying from a dealer that you can trust is usually a better option and not all dealers are a rip-off. There’s different kinds of dealers out there, some who are just trying to make money and some that are in it for the fun and are car enthusiasts, like me.
I helped sell many used cars that went through auction for less than 3k, spent 1,500 in parts to fix up or what not, and sold for 6-7k in better condition than almost every car in that price range today. However, it is a LOT of work to make $$$ that way.
To answer the original question, I think that the “price” trend will eventually balance off and go down. Over the next few years you will see more people invest in a “newer” vechiles as it will not be feasible to purchase a 10 year old car with 100,000 for $5,000. From what I have seen the auctions are HORRIBLE to find a good deal. Over time prices will drop in the used car market because it will be saturated with trade-ins and hopefully prices go back to when used cars where $2,500 for something that is not a total POS.
I haven’t read all the comments. But C4C drove prices up on $3k - $6k vehicles by reducing the supply of cheaper alternatives and I think they will adjust down a bit (not to previous lows) by late winter.
With GM being out of the lease game for over a year, I predict a year or two from now the prices will go up significantly on near new (2 - 3 year old vehicles) due to lack of supply. Since lease prices are now higher, people that were leasing are now buying near new to keep payments down, which again reduces the supply.
I think prices on near new cars will stay high until an OEM gets drunk on volume again and brings back very strong residual support on leasing.
It seems like the used car market is high, whenever I’m looking to buy a used car. When I’m not its low of course.
Honestly, I feel like the new car market needs to stabilize before values will hold. When dealers offer 6K rebates on cars plus you can haggle, the used market for that car will be in the gutter.
I purchased my Colorado (2008 3.7L [5 cylinder] Reg Cab Short Bed Loaded) for less then what my dad paid for a 2000 Chevy S-10 in 1999 (Ls 4 cylinder manual locks/windows 2wd).
I’d love to buy a G8 GXP but I’m not going to unless the prices drop down a little.
Though on the other hand, used GTO’s are selling super cheap.
I just bout a used car last month and got a great rate
also was able to negotiate the price of the car quite a bit. I got a 2 year old car for A LOT less than sticker on a new one…A lot lower than employee pricing too. Used FTW
Well historically used cars have higher interest rates. When new rates are at 0 used rates are usually at least 4% or whatever.
I can remember when new was like 8% and used was like 12%.