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A glut has used-car depreciation accelerating

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Re: A glut has used-car depreciation accelerating

#151

Post by MrFoof »

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.

In the US, ~45% of car registrations are new vehicles. In 2016 around 17.6 million new passenger vehicles were sold in the US with a combined transaction price between $500B and $600B.

That puts used car sales (including private sales) at around 22 million units, and nearly 40M total cars sold and registered in the US in 2016.

Regardless, if someone wants to complain about expensive classic cars, Porsches aren't the ones to complain about, with most (bulk being 911s from '78 - '93) trading hands well under $100K (964s being more like $50-65K, SCs more like $20-30K) despite the Porsche bubble that's been growing for a long while now -- since Ferraris long ago got too expensive for first time classic car buyers.

Re: A glut has used-car depreciation accelerating

#152

Post by batiudrami »

hammock wrote: post #93
1_2__4 wrote: post #64

Earlier quoted context omitted.

That's not really comparable at all. A color tv is a fundamentally more distinct product as compared to a b&w tv than a ICE cars is compared to an electric. Especially for the foreseeable future.

Lol in what way?

Because a colour TV is fundamentally and objectively better at its primary use case (watching TV). A petrol powered car will get you from A to B just like an electric one.

Re: A glut has used-car depreciation accelerating

#153

Post by selectodude »

francisofascii wrote: post #140
hkmurakami wrote: post #135

Earlier quoted context omitted.

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?

The former.

Re: A glut has used-car depreciation accelerating

#154

Post by marcosdumay »

james-skemp wrote: post #37
afinlayson wrote: post #23

This may be temporary, as services like Uber/Lyft increase, and the possibility of Autonomous Vehicles driving down the cost of those services. This would cause the volume of new cars needed to dramatically fall, leading to increased cost of those new vehicles. This would increase the value of used vehicles that are currently priced in. Would love to hear differing opinions :)

> This would cause the volume of new cars needed to dramatically fall [...] I don't disagree with you, but when reading the article you'll notice that the auto industry is pushed to sell more cars, year after year. Like a number of industries, now that they've had years/decades of growth, I'm not sure how they would handle significant loses. Heck, even stabilization. I'm over 35, but consider myself young; was there…

> was there even a time when the majority of companies didn't care so much about year-over-year growth, and weren't seen as weak if they were stable/flat?

Since the Industrial Revolution, I don't think so. Now that you mentioned it, I think the concept of "corporation" is intrinsically related to growth.

Re: A glut has used-car depreciation accelerating

#155

Post by brewdad »

slg wrote: post #147
curun1r wrote: post #128

Earlier quoted context omitted.

We won't need nearly as many charging stations as we need gas stations because electric cars can be charged at home.

Maybe that is true in rural and suburban environments, but I doubt it in dense urban environments. Adding a charger to every spot in residential parking garages and on every residential street is a bigger infrastructure project than converting over gas stations to chargers. You also have to consider the time it takes to recharge an electric car is much higher than the time to refuel an ICE car.

> You also have to consider the time it takes to recharge an electric car is much higher than the time to refuel an ICE car.

True, but for most drivers on most days they will be able to charge up at home overnight. Charge time won't matter as much then. Drivers in dense urban environments will likely move towards a car sharing model since, as you noted, the costs and practicality of infrastructure retrofitting will be exorbitant.

Re: A glut has used-car depreciation accelerating

#156

Post by gozur88 »

madengr wrote: post #89
gozur88 wrote: post #80

Earlier quoted context omitted.

Apparently you won't get much for it, then. I'm kind of in the same boat, but I'd really like to get an electric model that's been produced for a few years, which means there won't be much on the used market.

There are lots of 2015 Nissan Leafs coming off 2 year leases. I picked up one 6 months ago for $8500 with 19k miles.

The Leaf is a bit lean on range for me.

That's not a bad price, though.

Re: A glut has used-car depreciation accelerating

#157

Post by totalZero »

volkl48 wrote: post #51
jrs95 wrote: post #25

Earlier quoted context omitted.

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.

True. And in all reality, this is great for consumers and bad for holders of inventory.

There's a tendency among people in business to mark everything to market. This helps avoid otherwise hidden losses but it doesn't actually make sense in some situations. For example, in the case of a family that owns two cars and replaces one every five years.

Re: A glut has used-car depreciation accelerating

#158

Post by Robotbeat »

wickawic wrote: post #148
matt_wulfeck wrote: post #141

Earlier quoted context omitted.

Man I've been looking for a decently priced leaf for a long time. I'd like to attend an auction like this in the Bay Area. It may be this location but Craigslist is pretty slim pickings.

I think Manheim is a wholesale auction, unfortunately

Sounds like we have a solution: open up the auction for individual buyers to keep auction prices up.

Re: A glut has used-car depreciation accelerating

#159

Post by rconti »

r27d wrote: post #113
sbierwagen wrote: post #2

The average used car costs $15,300? That seems pretty wild. Are the classic Porsches that sell for $10 million dragging the average up?

The article neglects to mention Obama's $3 billion dollar Cash for Clunkers program in '08 which hurt used vehicle supply.

Shouldn't that have RAISED use vehicle prices? Or is that your point, that the dropoff would have been even larger without C4C?

Re: A glut has used-car depreciation accelerating

#160

Post by rawrmaan »

TheAdamAndChe wrote: post #134
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 th…

I appreciate your comment. I definitely didn't see it that way until now but I think you're right.
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