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Why are used cars so expensive right now?

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Re: Why are used cars so expensive right now?

#81

Post by Ancapistani »

jaybrendansmith wrote: post #79
anonu wrote: post #68

Earlier quoted context omitted.

High demand and low supply due to supply chain slowness doesn't immediately translate to price inflation. Prices go up in this scenario but the question is if it's just temporary (meaning supply eventually meets demand or demand goes away over time) or it is in fact permanent inflation.

Hard agree. Real estate is spiking up, but you are to observe that construction materials and wood just normalized back to where they were. Same with cars, this is due to rental companies repurchasing their fleets. It's a temporary supply issue, we are not in an inflationary market just yet.

> construction materials and wood just normalized back to where they were

Huh? Wood prices have corrected some, but they’re still >2x what the were pre-pandemic.

Re: Why are used cars so expensive right now?

#82

Post by voisin »

paulpauper wrote: post #22

Almost everything is expensive now. Look how much assets in general have gone up: stocks, real estate, collectibles, commodities, and so on. College, healthcare, and insurance too. No reason cars should be an exception.

Just wait to see what happens to food this year after the current crop failures due to global warming hit the supply chain.

Re: Why are used cars so expensive right now?

#83

Post by andrepd »

lapsed_pacifist wrote: post #7
JKCalhoun wrote: post #5

Earlier quoted context omitted.

New car shortage was explained by a chip shortage. What is the reason new housing starts are not keeping top with demand?

Zoning which prohibits or heavily restricts multi-unit housing in cities, and material shortages and high prices for steel and lumber which impacts new single family homes.

That's a minor factor. It does not explain how this situation happens all over the world, even where there is no overzealous zoning or high prices of materials.

The issue is cheap credit and the lack of an LVT that would avoid all the economical and ethical issues with land ownership.

Re: Why are used cars so expensive right now?

#84

Post by jjeaff »

brutus1213 wrote: post #70
adventured wrote: post #64

Earlier quoted context omitted.

Stocks are vastly superior to real-estate. Businesses with reliable growth and some pricing power. The S&P500 has generated approximately a 266% return in the past 20 years (ex any dividends). The average home sale price has climbed by just under 100% in that time. Real-estate will nail you annually on property taxes (although not in every state) and you have to maintain it (let's assume a best case and you own it wi…

I used to think this way and realized there were two key things I missed (these are game changers). 1) There are places where the appreciation on the primary residence is not-taxed or taxed at a low rate. I.e. In HCOL areas, people who just bought a house and did nothing much in life (say, drove an Uber just to make ends meet), are worth 1-2 million dollars after tax. 2) When you buy real-estate through a mortgage, y…

A few issues with your two points, I think, are that real estate values don't always go up forever, even in hcol areas. It's not always evident what areas are about to have years and years of high growth.

Now, buying a home for your own personal use and as an investment is a better proposition. But you can only have one of those and you can't get such low interest rates and low money down for investment properties as you can for a personal home mortgage.

Re: Why are used cars so expensive right now?

#85

Post by mox1 »

brutus1213 wrote: post #53
holoduke wrote: post #40

Earlier quoted context omitted.

Exactly. Nobody dares yet to tell it's inflation.

I was looking at the market charts (NASDAQ) and was floored. How can people look at such a massive increase during a global pandemic and say this is normal growth? I mostly missed out on this entire expansion (we were saving to buy a house; had to keep the downpayment liquid as our housing market is stupid and requires people to go through a dozen bidding wars before you actually succeed).

I think most would agree we are in bubble-ish territory, but what do you do?

Most advice says 2 things. 1. impossible to time the market. 2. time in market beats all things.

So you can't just pull your money out. Even with a 20% correction tomorrow, your still going to be up on the year.

Going to bonds to get 1-2% isn't helping much.

There is nowhere left to put money.

Be nervous a year from now when the bubble talk subsides as the NASDAQ continues to grow :)

Re: Why are used cars so expensive right now?

#86

Post by lazerpants »

gimmeThaBeet wrote: post #61
prpl wrote: post #15

The Kia Telluride is selling for quite a bit more than MSRP, used. Apparently dealerships are asking for more than MSRP new and that is part of it (in addition to/because of low availability)

The thing I find oddest about that, is I always hear about the Telluride, but the Hyundai Palisade rarely comes up. I couldn't figure how they could differ enough to cause such a disparity. I assume in reality, Palisade pricing has to be similar, right? Now I say that, but I also think I can answer my own question. Mainly, I would say I'm hilariously confused by how Hyundai positions Kia and Hyundai. Like on paper it…

My suspicion is that Kia/Hyundai's current marketing position is about capturing new car purchasers, not differentiating brands.

Your average consumer will only drive a few cars before buying one, 3-5 maybe? So if you can own two of those slots with cars that are practically the same but somewhat different, you increase the chances that a consumer will buy one of your products because they are less likely to look at competitor's products.

Curious what others think on this. Seems like a smart business strategy.

Re: Why are used cars so expensive right now?

#87

Post by pontifier »

kbob wrote: post #78

The semiconductor fabs didn't shut down last year, did they? If we've run out of so many chips, there must be a glut of some other chips that nobody wants? Are distributors holding zillions of unsellable obscure level shifters or CPLDs or something?

Probably the fabs that made these chips haven't made them for years. They probably cranked out billions of them 20 years ago then converted to producing something more valuable.

We've probably run out of new old stock and nobody wants to go back to making these cheap chips.

Re: Why are used cars so expensive right now?

#88

Post by oceanplexian »

France_is_bacon wrote: post #77

Cash is being pumped into our economy, therefore, people want to buy more stuff, because now they can "afford it." So now with more competition for goods and services, prices go up because there is more money than there are goods and services. I work with businesses in the trades (auto repair, plumbers, HVAC, insulation, etc) and they are all at full throttle, and cannot handle any more work. So those companies are g…

Zimbabwe? Probably not, but I think something similar to Argentina (it is not unusual to see credit card offers with 100%+ interest). We won’t see 1,000x inflation but strojg inflation could be in the cards, especially if we keep expanding the money supply. Eventually something has to give.

Re: Why are used cars so expensive right now?

#89

Post by j79 »

voisin wrote: post #82
paulpauper wrote: post #22

Almost everything is expensive now. Look how much assets in general have gone up: stocks, real estate, collectibles, commodities, and so on. College, healthcare, and insurance too. No reason cars should be an exception.

Just wait to see what happens to food this year after the current crop failures due to global warming hit the supply chain.

Anyone have suggestions to prepare for this scenario?

Re: Why are used cars so expensive right now?

#90

Post by swarnie_ »

j79 wrote: post #89
voisin wrote: post #82

Earlier quoted context omitted.

Just wait to see what happens to food this year after the current crop failures due to global warming hit the supply chain.

Anyone have suggestions to prepare for this scenario?

If you live in a modern western country? Nothing.

The asparagus season might be a few weeks shorter, you may pay 3-5% more but ultimately no one is going to starve.

The best thing to do is prepare for slightly higher outgoings.

If you are in Sub-Saharan Africa continue doing what you're already doing, get on a dinghy and point it at Europe.

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