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A glut has used-car depreciation accelerating

bloomberg.com

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Re: A glut has used-car depreciation accelerating

#131

Post by dshibarshin »

wbracken wrote: post #109

Tangentially in the business. Two recent stories told to me: 1) Saw at Manheim Auto Auction (one of the largest) 300 Nissan Leafs run through the auction line in one afternoon ahead of some of our cars. Drop in "value" of leafs went down 10%+ in one day. All were recently off lease. 2) For similar reason, Santander is holding 4000+ cars on auction lots "waiting for pricing to stabilize". Reality is, when they run tho…

The overseas markets can't seem to get enough of the Leafs. I've seen trucks full of Leafs delivered for export to places such as Ukraine.

Re: A glut has used-car depreciation accelerating

#132

Post by tmnvix »

AnimalMuppet wrote: post #70
loeg wrote: post #63

Earlier quoted context omitted.

Far-over-median priced vehicles will still drag up the average.

Yes, but... How many used cars are sold in a year? It's got to be more than a million, doesn't it? So, yes, that $15 million Porsche drives up the average price... by $15. That's not significant.

$15 due to a single sale seems very significant. Correct me if I'm wrong, but by your reckoning just 100 super collectable sales (average $5m) could raise the overall average by over $500.

Re: A glut has used-car depreciation accelerating

#133

Post by mixedCase »

grecy wrote: post #82
hnaccy wrote: post #68

Earlier quoted context omitted.

> Yes, the laws only apply to new vehicles. >because laws will ban the sale of the "old tech". ?

I mean laws will ban the sale of new ICE cars, which by then will be the "old tech". So when you can't even buy one new, why would someone want a used one? (unless, like I said, it's a pleasure driver or some exotic, which is a tiny fraction of all cars sold) Think of all the things that have been replaced and superseded in history - once the new thing exists, the old one drops in price dramatically.

> So when you can't even buy one new, why would someone want a used one?

Because the prices of non-collectable ICE cars is bound to plummet unless we haven't solved the battery charge speed issue (as in, in practice, supposedly it was recently solved in theory).

Re: A glut has used-car depreciation accelerating

#134

Post by TheAdamAndChe »

rawrmaan wrote: post #17

Interesting that this has nothing to do with ride sharing (or at least the article doesn't cite that as a reason). I think autonomy and ride sharing will drive used cars nearer to the value of scrap metal within the next 5 years.

Your comment displays the incredible social and economic compartmentalization between the Silicon Valley/tech hubs of the country and everywhere else. Uber is not a viable alternative to vehicle ownership for the majority of places in the country, particularly in poorer and more rural areas, and likely never will be. When you've got to drive 20 miles to reach town, ordering an Uber doubles the time required to get there.

As far as automation goes, in the consumer market, I highly doubt it will be anything more than a rich person's luxury for a good long while, since most people can barely afford a $10k vehicle, let alone a $100k one.

Re: A glut has used-car depreciation accelerating

#135

Post by hkmurakami »

mrfusion wrote: post #120

I really found the opposite last month when I was truck shopping. The prices at carmax weren't much lower than buying new. I even found one case where it was cheaper to buy new! I'm wondering if people hate the dealership experience so much they're driving up the price of used cars? I'm still just utterly confused by the used truck prices I was seeing.

Afaik trucks are the strongest US auto segment (iirc Toyota can't make enough of them right now and are increasing production capacity in their Mexico plant), so maybe you hit an outlier segment.

Re: A glut has used-car depreciation accelerating

#136

Post by maxerickson »

curun1r wrote: post #94
slg wrote: post #52

Earlier quoted context omitted.

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.

When new car sales move to electric from gasoline, you'll start to see gas stations go out of business...slowly at first but accelerating as the percentage of gas powered vehicles declines. You'll still have your car and be allowed to drive it, but the days of just finding a gas station wherever you need them will be over. Much like early days of electric cars, people will need a concrete refueling plan for every tri…

They make a lot of their money in the convenience store.

I think a lot of them will stay in business and just have a smaller tank/less pumps.

Re: A glut has used-car depreciation accelerating

#137

Post by JSONwebtoken »

jedberg wrote: post #114

I just bought a new van. It was rediculously easy for me to get a loan for 105% of the retail price (and I didn't even pay retail). I opted not to get the full loan for obvious reasons. But the fact that I could is frightening. There will be so many people underwater on their loans. The car bubble is coming and it's going to pop hard.

Why wouldn't you take the loan on your van? Interest rates are under 3%, which is definitely cheaper than any mortgage or student loan you might be carrying.

Auto loan risk is significantly mitigated by modern advancements in GPS & tracking technology. No other collateral is as easily repossessable as a modern car.

Re: A glut has used-car depreciation accelerating

#138

Post by rlanday »

jogjayr wrote: post #124
jedberg wrote: post #114

I just bought a new van. It was rediculously easy for me to get a loan for 105% of the retail price (and I didn't even pay retail). I opted not to get the full loan for obvious reasons. But the fact that I could is frightening. There will be so many people underwater on their loans. The car bubble is coming and it's going to pop hard.

I thought anyone who finances a new car is underwater as soon as they drive off the lot. Don't new cars depreciate something like 20% the day you buy them? EDIT: I was wrong it's closer to 9% [1] [1] https://www.edmunds.com/car-buying/how-fast-does-my-new-car-...

Depends how big of a down payment you make.

Re: A glut has used-car depreciation accelerating

#139

Post by damnfine »

mrfusion wrote: post #120

I really found the opposite last month when I was truck shopping. The prices at carmax weren't much lower than buying new. I even found one case where it was cheaper to buy new! I'm wondering if people hate the dealership experience so much they're driving up the price of used cars? I'm still just utterly confused by the used truck prices I was seeing.

Trucks are used as work, and puzzlingly, luxury cars in the US. They hold their value well because of the new standards seem to be making long term maintanince harder and more expensive. Pre-DEF Desiel engines, Normally aspirated V8 engines, Thicker sheet metal, Less sensors to replace over rough use are a great example of factors making many used trucks sell for more than new.

Re: A glut has used-car depreciation accelerating

#140

Post by francisofascii »

hkmurakami wrote: post #135
mrfusion wrote: post #120

I really found the opposite last month when I was truck shopping. The prices at carmax weren't much lower than buying new. I even found one case where it was cheaper to buy new! I'm wondering if people hate the dealership experience so much they're driving up the price of used cars? I'm still just utterly confused by the used truck prices I was seeing.

Afaik trucks are the strongest US auto segment (iirc Toyota can't make enough of them right now and are increasing production capacity in their Mexico plant), so maybe you hit an outlier segment.

That's really interesting. It is the low gas prices? Or strength in the construction sector?
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