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Used car market gets even more bizarre

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Re: Used car market gets even more bizarre

#171

Post by csteubs »

sokoloff wrote: post #161
csteubs wrote: post #83

Earlier quoted context omitted.

Might be anecdotal but on top of that, I've noticed that many car owners who previously only had services performed by a shop began doing their own maintenance. A friend who works as a service manager at CarMax had similar observations in conversations with some customers, including one DIY-er who forgot to torque their oil drain bolt correctly, lost the oil, and is now the recipient of a refurbished engine. I had on…

Jumping from only light maintenance to changing a rear main seal is quite the leap!

No better feeling though! Especially when running the numbers post-fix (insert CS joke here) and comparing to shop quotes. I keep spreadsheets for two cars and an older jet ski and I've saved ~$12k this year alone by wrenching solo assuming $100/hr = standard labor rate. I've learned a TON of cross-functional skills, have full control over the parts and repair, and it's just a feel-good way to step away from my desk when things slow down at work.

I remind myself of the the 5-digit savings whenever I'm in line at Harbor Freight... which is often.

Re: Used car market gets even more bizarre

#172

Post by arh68 »

lotsofpulp wrote: post #154
hermanradtke wrote: post #119

Earlier quoted context omitted.

I found a 2008 4Runner v6 engine with 4 wheel drive some years back. People ask me all the time to sell and I never will because that platform is so solid.

Does the 4 in 4Runner not mean they all have 4 wheel drive?

Nope! Many are 2WD (RWD), perhaps even most depending on the area. Some are full-time 4WD, but many have the manual 4WD selector 2H-4H-4L.

Re: Used car market gets even more bizarre

#173

Post by AtlasBarfed »

A huge price inflation in ICE is perfect for making EVs more affordable from a perception standpoint.

When the drivetrain cost drops well under ICE (pre-inflation, which should happen with Tesla in about a year depending on 4680 production) and charging takes off, ICEs will look completely noncompetitive.

If solid state batteries become feasible and/or LFP hits the magic density number of around 200-250 wh/kg? Look out. The bottom is going to fall out.

Re: Used car market gets even more bizarre

#175

Post by skybrian »

shard wrote: post #169
latortuga wrote: post #139

Earlier quoted context omitted.

Another flip side effect. My dad is a CFO at a car dealership and tells me that the banks are having problems due to the lack of cars as well. A dealership will normally float all their inventory on a big bank note but they basically have no cars on the lot to sell which means the banks underwriting those notes are making no money on interest. Multiply it by thousands of dealerships nationwide and this has big impact…

Could you clarify what this means for a layman? AIUI you are saying that a car dealership will borrow money from the bank to purchase their inventory, but nowadays with no inventory, banks are not getting payments from the dealers for the money they've borrowed. 1. With no inventory, why does the dealer need the money from the bank? 2. If the dealer is still borrowing money from the bank despite having no inventory,…

It sounds like dealers choose how much to borrow. If they borrow less, banks get less interest, meaning less income, unless they replace it by finding other people to make loans to.

Re: Used car market gets even more bizarre

#177

Post by mdavis6890 »

shard wrote: post #169
latortuga wrote: post #139

Earlier quoted context omitted.

Another flip side effect. My dad is a CFO at a car dealership and tells me that the banks are having problems due to the lack of cars as well. A dealership will normally float all their inventory on a big bank note but they basically have no cars on the lot to sell which means the banks underwriting those notes are making no money on interest. Multiply it by thousands of dealerships nationwide and this has big impact…

Could you clarify what this means for a layman? AIUI you are saying that a car dealership will borrow money from the bank to purchase their inventory, but nowadays with no inventory, banks are not getting payments from the dealers for the money they've borrowed. 1. With no inventory, why does the dealer need the money from the bank? 2. If the dealer is still borrowing money from the bank despite having no inventory,…

Dealers have a line of credit, like a credit card, that they use to purchase inventory. They pay it back as they sell cars, and run it up as they buy new inventory to replace it. So the overall loan balance roughly represents their current unsold inventory. No inventory means no loan balance, which means no interest payments to the bank.

Re: Used car market gets even more bizarre

#178

Post by lotsofpulp »

arh68 wrote: post #172
lotsofpulp wrote: post #154

Earlier quoted context omitted.

Does the 4 in 4Runner not mean they all have 4 wheel drive?

Nope! Many are 2WD (RWD), perhaps even most depending on the area. Some are full-time 4WD, but many have the manual 4WD selector 2H-4H-4L.

Interesting. I assumed they all had the 4WD selector.

Re: Used car market gets even more bizarre

#179

Post by satronaut »

clavalle wrote: post #8
dlmiller wrote: post #2

My car died, needing a new engine, so I was forced to get one in October. I usually only buy used, but prices are so inflated it didn't seem worth the premium. Used 2017-2020 Toyota Rav4's with 30-60k miles were the same price as a new 2021 model, if you could get one. I knew it was bad, but I was shocked of how bad it was. I went to multiple mega dealerships with 500-1000 cars that were all spoken for. Most had 0 ne…

I was in the same boat. I usually avoid buying new but used cars are nearly the same price as new (if you can find a dealer that hasn't done ridiculous 'market adjustments'). So we bought new. We had to buy a car that was just off the delivery truck before the dealership had it inspected. The one we'd looked at two days before was long gone and they expected the one we bought to be sold the next day. My neighbor trad…

I bought a tesla about a year ago. I only had to wait a week for it. 0 down and something like 2% APR. I feel like I really lucked out there

Re: Used car market gets even more bizarre

#180

Post by mdavis6890 »

nostrademons wrote: post #156
wpietri wrote: post #29

Earlier quoted context omitted.

Wow, those are some terrible incentives. I've never had a loan, so maybe I misunderstand the experience. But I'd hate to owe money to somebody that is hoping I fail badly enough that they take my stuff and while keeping my money.

Usually the bank has no mechanism to alter whether you make payments or not. Keep making payments and they can't repossess the car. It'll be interesting to see what this does to the credit quality of future borrowers, which is the only leverage the bank has. Secured loans on appreciating assets mean that at some point, the bank has an incentive to write loans that they know are not going to be repaid, because they bu…

"...it becomes profitable to write loans to borrowers that you know are going to default, because you can take the house and enjoy the asset appreciation while getting a nice stream of cash flows in the process."

Not the way it works, for two main reasons. First, people who owe less than the house is worth are generally not foreclosed on - in the worst case they just sell and keep whatever equity they get away with. Second, legally the bank can't keep any surplus. If they foreclose on your house, they have to sell it at auction and keep only up to the amount you owed. They would have to give you any excess. At least for houses, banks aren't allowed to profit from foreclosures.

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