Hah! Just yesterday I was remarking how car gluts don't translate into lower consumer prices because the government quickly props up demand:
A glut has used-car depreciation accelerating
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Re: A glut has used-car depreciation accelerating
#112Earlier 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…
Or we'll see "gas" stations incrementally change to "gas-n-charge" stations. As society moves from liquid hydrocarbons to electrons for personal transportation I can see no reason why these locations won't adapt.
After all, people will still ingest their liquid fuel and expel their waste. ;-)
Re: A glut has used-car depreciation accelerating
#113The 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.
Re: A glut has used-car depreciation accelerating
#114I 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.
Re: A glut has used-car depreciation accelerating
#115Earlier quoted context omitted.
All other articles and GM comments say that the extended summer shutdown is to increase Bolt supply, not because there is too much supply already. The Bolt outsold both of Tesla's vehicles last month. The Sonic has weak sales, so during the shutdown they're reconfiguring the plant to make 1 Bolt for every 1 Sonic, where it was 1:2 before.
Do you have a link to support this? My comment/link wasn't a dis of EV's, it was pointing out the glut of inventory GM are sitting on, including EV's. If you are interested in a Bolt now would be an excellent time to bargain for one at the dealership...
Re: A glut has used-car depreciation accelerating
#116The average used car costs $15,300? That seems pretty wild. Are the classic Porsches that sell for $10 million dragging the average up?
No, that's about right. Take some time and go through autotrader.com. $15k isn't unusual for a used mid-value sedan with ~25,000 to ~65,000 miles. For example, look up Hyundai Sonatas, 2013, with that mile load, you'll see prices around $14,000 to $18,000. Or check out Toyota Camrys, 2012 model year. You'll typically pay around $14,000 to $16,000 to get into one with 40,000 to 60,000 miles. So that's a 5+ year old ca…
Each of those cars is being resold for the first time, most likely. How many times is a car sold in its lifetime? Eventually it's sold to a scrap dealer for $500, and I'd bet that transaction is not included in the 15k average.
In any case, anyone considering a new car and concerned about depreciation should consider leasing instead. That way you only pay the depreciation (which you'd pay anyway) and after 3 years you have the option of buying it as a used car for the remaining cost or moving on to a new car with no hassle trying to sell it.
Re: A glut has used-car depreciation accelerating
#117Earlier quoted context omitted.
Could you tell us more? Was this in some niche segments of discontinued but popular models (like certain Subarus) or were run of the mill cars also like this?
In short, the cash for clunkers initiative made used car stock plummet. This lead to used car prices going up. At least, I think that's what GP is hinting at.
Cash for clunkers pulled lots of used cars off the market but my understanding is plummeting manufacturing of new cars after the financial crisis was responsible for a much higher percentage of the gain.
Cash for clunkers pulled like 700k out of the market.
The auto industry was making millions less cars and trucks per year from 2008-2012.
Re: A glut has used-car depreciation accelerating
#118Earlier 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.
And don't forget that EV's will be a whole lot better than they are now, like cheaper and longer-range.
Re: A glut has used-car depreciation accelerating
#119Earlier quoted context omitted.
I think it's likely some other resource might be a constraint in that tight a timeline though. Either something for the cars themselves, or the infrastructure for charging them.
Do you have any reason to believe that? Almost all car charging is done at night, when grid load is far lower. Charging will not be a problem, and there is no material shortage likely in the near future.
Brand new flat or house built today in Madrid, Spain are fitted at best with a 20A connection. The standing charge alone is more than what I pay for electricity (standing charge and consumption) in a 2 bed flat in London. The vast majority of flat and house I have seen in Spain have 15A or 20A. That includes city, and country houses.
It is a cost cutting measure rather than an infrastructure limitation (people chose a 20A connection because of the standing charge cost) in the newer building, but I suspect that if a significant portion of the population need to double their contract and maxed it out during the night, there is going to be some work needed.
Re: A glut has used-car depreciation accelerating
#120I 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.