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A glut has used-car depreciation accelerating

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Re: A glut has used-car depreciation accelerating

#51

Post by volkl48 »

jrs95 wrote: post #25
ng12 wrote: post #5

Actually it's not because I don't think about the value of my car. It's not an investment, it's an expense.

This is true, but the value of your car plays an important role in that expense. And expected depreciation is an important factor to consider when buying a car.

That's only if you intend to sell it for more than scrap value some day.

Any car I buy is getting sold to the junkyard for $500 in 10+ years and 200k+ mi. How steeply it's paper value declines between now and then doesn't matter much to me.

Re: A glut has used-car depreciation accelerating

#52

Post by slg »

grecy wrote: post #32

With many countries tabling laws to outlaw the sale of diesel and gasoline cars around 2030, this is going to accelerate extremely quickly. In 5 years (2022), everyone will know it will be illegal to buy a gasoline car in just under 8 years. I think there will be very little demand for the regular old gas powered car. (excepting maybe exotics, or "pleasure drives", which much be a tiny fraction of overall sales) That…

Aren't all those laws focused on new cars? I can't imagine the backlash a government would receive by zeroing out the value of most people's most expensive possession.

Re: A glut has used-car depreciation accelerating

#53

Post by FLUX-YOU »

grecy wrote: post #32

With many countries tabling laws to outlaw the sale of diesel and gasoline cars around 2030, this is going to accelerate extremely quickly. In 5 years (2022), everyone will know it will be illegal to buy a gasoline car in just under 8 years. I think there will be very little demand for the regular old gas powered car. (excepting maybe exotics, or "pleasure drives", which much be a tiny fraction of overall sales) That…

Kinda curious how electrical vehicles will fare during a mandatory evacuation or disaster. If you don't have a full charge, there's not an easy way to get a full charge, and so you will just not have transportation the full route.

Re: A glut has used-car depreciation accelerating

#54

Post by majormajor »

sbierwagen wrote: post #10
adventured wrote: post #3

Earlier quoted context omitted.

No, that's about right. Take some time and go through autotrader.com. $15k isn't unusual for a used mid-value sedan with ~25,000 to ~65,000 miles. For example, look up Hyundai Sonatas, 2013, with that mile load, you'll see prices around $14,000 to $18,000. Or check out Toyota Camrys, 2012 model year. You'll typically pay around $14,000 to $16,000 to get into one with 40,000 to 60,000 miles. So that's a 5+ year old ca…

I don't disagree that you can pay $15K for a used car, I doubt that the average price of a used car is $15K. The average price of the first 30 used cars for sale by owner on the Seattle craigslist is $5,896: https://seattle.craigslist.org/search/cto Average price of the first 30 by dealer however, is $21,567: https://seattle.craigslist.org/search/ctd But who would be dumb enough to buy a used car from a lot?

Isn't looking at Craigslist selection bias around people looking to buy/sell cheaper cars without warranties?

If I had a used car worth 20K still in a maintenance window I wouldn't sell it on Craigslist. Autotrader if I wanted to private-party to max my upside, dealer if I was lazy.

Re: A glut has used-car depreciation accelerating

#55

Post by ryandrake »

ProfessorLayton wrote: post #22

Its looking even worse (Or better for a buyer) for electric cars. A cursory craigslist search shows a 2014 Fiat 500e for ~7.5k @33k miles and Nissan Leafs for as little as ~5k @42k miles. All with clean titles. A used Model S 60 (2013) can be found for ~40k @60k miles, which I think is good but not great, especially considering the quality issues early on. I'm waiting to pounce on 1st generation electric cars that wi…

As someone who at one point considered a 500e, why so cheap in the aftermarket? Are they really falling apart this quickly?

Re: A glut has used-car depreciation accelerating

#56

Post by majormajor »

sbierwagen wrote: post #48
aianus wrote: post #19

Earlier quoted context omitted.

Why is it so dumb to buy a used car off the lot? I bought an Audi off lease last year. It's still under warranty, free maintenance (until 80k km), low mileage (37k km), fully loaded with options, and I saved $20k vs a new one.

Most used car dealers don't give you a warranty: https://seattle.craigslist.org/skc/ctd/d/2015-bmw-x5-35i-awd... Note the conspicious absence of the word "warranty" on this listing. If the car falls apart as you drive off the lot, you're out $35K. CPO cars have a warranty, which sharply limits your downside risk. Buying a used car from a manufacturer is a much better deal than buying it from a third party.

Usually the factory warranty transfers on sale if the car is new enough. https://www.autotrader.com/car-tips/buying-a-car-is-the-fact...

Generally not as nice as CPO, but it's something.

Re: A glut has used-car depreciation accelerating

#57

Post by grecy »

slg wrote: post #52
grecy wrote: post #32

With many countries tabling laws to outlaw the sale of diesel and gasoline cars around 2030, this is going to accelerate extremely quickly. In 5 years (2022), everyone will know it will be illegal to buy a gasoline car in just under 8 years. I think there will be very little demand for the regular old gas powered car. (excepting maybe exotics, or "pleasure drives", which much be a tiny fraction of overall sales) That…

Aren't all those laws focused on new cars? I can't imagine the backlash a government would receive by zeroing out the value of most people's most expensive possession.

Yes, the laws only apply to new vehicles.

It's similar to when Color TVs were invented. What happened to the re-sale value of all the B&W TVs that were already out there? They plummeted, because they had been superseded.

This scenario will be even more aggressive, because laws will ban the sale of the "old tech".

Re: A glut has used-car depreciation accelerating

#58

Post by frandroid »

sbierwagen wrote: post #10
adventured wrote: post #3

Earlier quoted context omitted.

No, that's about right. Take some time and go through autotrader.com. $15k isn't unusual for a used mid-value sedan with ~25,000 to ~65,000 miles. For example, look up Hyundai Sonatas, 2013, with that mile load, you'll see prices around $14,000 to $18,000. Or check out Toyota Camrys, 2012 model year. You'll typically pay around $14,000 to $16,000 to get into one with 40,000 to 60,000 miles. So that's a 5+ year old ca…

I don't disagree that you can pay $15K for a used car, I doubt that the average price of a used car is $15K. The average price of the first 30 used cars for sale by owner on the Seattle craigslist is $5,896: https://seattle.craigslist.org/search/cto Average price of the first 30 by dealer however, is $21,567: https://seattle.craigslist.org/search/ctd But who would be dumb enough to buy a used car from a lot?

Some warranty/return possibility? A friend has just gone through two returns at CarMax.

Re: A glut has used-car depreciation accelerating

#59

Post by grecy »

FLUX-YOU wrote: post #53
grecy wrote: post #32

With many countries tabling laws to outlaw the sale of diesel and gasoline cars around 2030, this is going to accelerate extremely quickly. In 5 years (2022), everyone will know it will be illegal to buy a gasoline car in just under 8 years. I think there will be very little demand for the regular old gas powered car. (excepting maybe exotics, or "pleasure drives", which much be a tiny fraction of overall sales) That…

Kinda curious how electrical vehicles will fare during a mandatory evacuation or disaster. If you don't have a full charge, there's not an easy way to get a full charge, and so you will just not have transportation the full route.

Have you seen what happens to gas stations during a mandatory evacuation or disaster?

With no electricity, gas can not be pumped from the tanks.

Even when it can, there is immediately a line-up of 100s of vehicles.

(I see this very often in West Africa)

Re: A glut has used-car depreciation accelerating

#60

Post by Glyptodon »

hkmurakami wrote: post #18
Glyptodon wrote: post #7

Thank the gods we're no longer in that weird bubble from a few years back where decent used cars were basically more expensive than new ones.

Could you tell us more? Was this in some niche segments of discontinued but popular models (like certain Subarus) or were run of the mill cars also like this?

I think it was circa 2012, and I may be exaggerating somewhat, but I particularly remember seeing new, lots-of-option Kia Souls selling for ~$18.5k new (window price) right next to used ones going for ~$18.5k used (window price) with nearly the same options on both. I think I also saw something similar with a few models of Honda, but my memory is most vivid with the Souls. And if memory serves, even when used was cheaper it was often not a whole lot cheaper. I also remember at least one dealer marking up all their new cars in the $17k to $25k MSRP range to new MSRP + $5k, and interspersing them with used of the same model at new MSRP (obviously sticker price is supposed to be negotiated, but it was still kind of ridiculous).

I think for the most part there just weren't very many quality (workhorse model, a-la Prius, Civic, etc.) used cars for sale in my area at the time that weren't 4-ish years old or more or which didn't have more than 64k miles or significant and obvious problems.

And yeah, interest rates on new cars loans were sometimes sub 1%, rarely more than 2%.

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