Live data from Hacker News

A glut has used-car depreciation accelerating

bloomberg.com

251–260 of 376 posts

Re: A glut has used-car depreciation accelerating

#251
post #82
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driver or some exotic, which is a tiny fraction of all cars sold) Think of all the things that have been replaced and superseded in history - once the new thing exists, the old one drops in price dramatically.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?

If people would want to buy them before considering availability of new ones, banning new one increases market clearing price of used ones by eliminating an obvious alternative.

Now, as the number on the road dwindles, you'll start to see reduced support infrastructure (gas stations, parts availability, etc.) which will make ownership less attractive, but that's likely to be a slow and lagging process. So, if there are still utility advantages to gas cars, I'd expect used ones to become more expensive initially with a ban on new ones, but drop sometime later.

Re: A glut has used-car depreciation accelerating

#252

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…

Leaf is a special case because of the battery degradation issues. 100k miles on a Leaf is basically end of life (unless you buy the $5k battery replacement). That being said, you can pick one up in California for $5k in perfect condition with Definitely a niche thing for heavy urban areas that have the charging infrastructure though. I can't imagine owning one in the Midwest.

My parents just bought a new model (2016, one of the last ones) and it's surprisingly practical.

Re: A glut has used-car depreciation accelerating

#253

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…

In CO you could get a Leaf for $8K with tax credits, at least until the end of June this year. There were tons of brand new ones on eBay going for ~$10K when I checked.

$8k? How?

Our local electric utility ran a $10k discount on the new high end models recently and I thought that was a bargain.

Re: A glut has used-car depreciation accelerating

#254

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 known for being incredibly reliable and fitting almost every niche all at once. Need to haul 5 people? You can have a pickup or a sedan. Need to haul lumber? You can have a pickup or a van. Need to drive down a 2 track road once or twice? You can have a pickup or an SUV. Need to move a refrigerator? You can have a pickup... well really just a pickup. Need to haul a trailer? You need a pickup. Need to park…

All of these are true. On top of that, they're lifestyle and identity products. That carries a massive premium. Those yoga mats you see suburban moms hauling around probably cost $0.30 to make, but they'll easily sell for $20+. Ditto the pickup. When your daily driver is also a powerful class and in-group signal, it's suddenly worth a lot more.

Re: A glut has used-car depreciation accelerating

#255
post #215

Earlier quoted context omitted.

Can you provide a concrete example? I can't recall ever seeing such a disparity in the US having lived in the midwest, northwest, and east coast. Perhaps you're in a different location?

Burlingame CA, California Dr @ Broadway. A & A Gas has regular at $2.72, while Chevron is at $3.20.

Also the Chevron at grant and el Camino is $3 when the shell a block away on grant is $3.60 or so. The Chevron is one of the highest trafficked gas stations in SV and operates on volume. The shell can't play that game so charges a pronoun to grocery shoppers.

Re: A glut has used-car depreciation accelerating

#256
post #159
post #113

Earlier quoted context omitted.

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?

If you have an outlier like that you can skew the slope greatly by where you pick your starting point. E.g. if I were to measure the drop in used-car prices from when C4C was at its peak, I would expect to see a big drop; much bigger than if I measure from just before C4C.

Re: A glut has used-car depreciation accelerating

#257
post #43

checked the KBB for my car back in may and it said $10k (2010 a4), checked again last month and it was down to $8500. I'm not really depending on the car to retain any value at all, but it's interesting to see how quickly that price is dropping.

KBB on my car dropped 60% in the past 18 months (10k to 4k).

Re: A glut has used-car depreciation accelerating

#258
post #241
post #215

Earlier quoted context omitted.

Can you provide a concrete example? I can't recall ever seeing such a disparity in the US having lived in the midwest, northwest, and east coast. Perhaps you're in a different location?

Costco is 20% cheaper than all other stations in Toronto. So either Costco is selling at a loss (unlikely) or there's plenty of profit in gas for gas stations.

Or they buy a lot in bulk when the price is low.

Re: A glut has used-car depreciation accelerating

#259

Sure, as far as basic transportation goes, but you can't get the vastly improved safety features in a used car that you can in most new cars today. Buy a new Toyota? It comes with automatic emergency braking, collision avoidance, blind spot detection, adaptive cruise control, and built-in backup camera, standard. Buy a used 2014? It has none of that. I just bought a new car for the first time in my life. The safety o…

Why is it worth 10k? Do you get in a lot of accidents? I genuinely would not want any of those things, I don't want my car making decisions for me, I'm smarter than it. On top of that it's just junk to break you can't fix.

I have never been in an accident.

I drive a pickup I paid sub $1000 for. Been driving it for three years no issues. That $10k could buy me ten trucks.

Would I take it on a trip? No, I rent a car for less than a car payment.

In my opinion buying new vehicles is a foolish waste of money I could be spending on something else.

Re: A glut has used-car depreciation accelerating

#260
post #159
post #113

Earlier quoted context omitted.

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?

Yeah, several years ago. Now it's plummeting due to a glut.
Post reply on HN