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A glut has used-car depreciation accelerating

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Re: A glut has used-car depreciation accelerating

#211

Post by KKKKkkkk1 »

bkjelden wrote: post #201
curun1r wrote: post #94

Earlier quoted context omitted.

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…

Gas stations don't make much money on actually selling gas - consumers are irrationally price sensitive when it comes to the price of gasoline, so the stations are generally selling it at or near cost. As long as people still pop into the convenience store to get a soda and a candy bar, it doesn't matter if they're filling your tank with gasoline or charging your battery.

How can the price of gas can be at or near cost, when the difference between two stations across the road from each other can be easily 20%?

Re: A glut has used-car depreciation accelerating

#212

Post by DigitalJack »

dshibarshin wrote: post #131
wbracken wrote: post #109

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…

The overseas markets can't seem to get enough of the Leafs. I've seen trucks full of Leafs delivered for export to places such as Ukraine.

Saw zero leafs during my week in London. Same with a week in Glasgow. Boat loads of prius’ though.

Re: A glut has used-car depreciation accelerating

#214

Post by gnicholas »

sbierwagen wrote: post #10
adventured wrote: post #3

Earlier quoted context omitted.

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…

I don't disagree that you can pay $15K for a used car, I doubt that the average price of a used car is $15K. The average price of the first 30 used cars for sale by owner on the Seattle craigslist is $5,896: https://seattle.craigslist.org/search/cto Average price of the first 30 by dealer however, is $21,567: https://seattle.craigslist.org/search/ctd But who would be dumb enough to buy a used car from a lot?

> But who would be dumb enough to buy a used car from a lot?

Someone who needs a loan? I've bought/sold several cars on Craigslist, and it's always all-cash. Perhaps it's possible to get a loan from a bank to buy a car off CL, but it's easier to do so at a dealership.

Re: A glut has used-car depreciation accelerating

#215

Post by grzm »

KKKKkkkk1 wrote: post #211
bkjelden wrote: post #201

Earlier quoted context omitted.

Gas stations don't make much money on actually selling gas - consumers are irrationally price sensitive when it comes to the price of gasoline, so the stations are generally selling it at or near cost. As long as people still pop into the convenience store to get a soda and a candy bar, it doesn't matter if they're filling your tank with gasoline or charging your battery.

How can the price of gas can be at or near cost, when the difference between two stations across the road from each other can be easily 20%?

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?

Re: A glut has used-car depreciation accelerating

#216

Post by S_A_P »

gnicholas wrote: post #210
S_A_P wrote: post #143

This bubble has been building for years now. Wholesalers and other exporters have been hiding the problem for a while now, and but somethings got to give. The problem is multifaceted: 1) Lease rates arent necessarily in sync with the used car market 2) Buyers are keeping cars longer if they purchase 3) Subprime loans and buy here/pay here dealers are multiplying. THIS IS A BUBBLE. I wont call when its going to burst,…

Any predictions on how the popping bubble will ripple through the economy? With the housing bubble, there was a huge pull-back in consumer purchasing, as people lost hundreds of thousands of dollars in home equity. That caused a drop in consumer confidence and purchasing, which led employers to cut back on wages/hours, which led to further drops in consumer purchasing. Do you think we'll see the same domino effect he…

I don't think that it will be as severe. The big banks are largely insulated from this. I do think that it will be a buyers market for late model used cars for cash buyers. I'm already seeing signs of this. It's just not quite there yet but I bet I can get a car at 50% traditional market price soon.

Re: A glut has used-car depreciation accelerating

#217

Post by niftich »

KKKKkkkk1 wrote: post #211
bkjelden wrote: post #201

Earlier quoted context omitted.

Gas stations don't make much money on actually selling gas - consumers are irrationally price sensitive when it comes to the price of gasoline, so the stations are generally selling it at or near cost. As long as people still pop into the convenience store to get a soda and a candy bar, it doesn't matter if they're filling your tank with gasoline or charging your battery.

How can the price of gas can be at or near cost, when the difference between two stations across the road from each other can be easily 20%?

There are likely other factors at play. For example, if the more expensive fuel station has brand associations it triggers (e.g. Shell [1]), the higher pricing likely benefits them more so than it hurts, as their target market discerning customer is likely to interpret the price as a proxy for quality.

[1] http://www.emeraldinsight.com/doi/full/10.1108/0258054051061...

Re: A glut has used-car depreciation accelerating

#218

Post by ams6110 »

woodandsteel wrote: post #123
dangrossman wrote: post #50

Earlier 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.

>The Bolt outsold both of Tesla's vehicles last month. The article says GM sold only 7,592 Bolts in the first six months of this year. Tesla sold way more, and it makes a much higher profit per vehicle. I don't know why Bolt sales are so low. When it came out the reviews were all very positive, and they said it would be strong competition for the Tesla Model 3. But the Tesla already has several hundred thousand pre-o…

Tesla is a status symbol. Chevy is not. The true demand is for the Tesla brand, not the electric vehicle.

Re: A glut has used-car depreciation accelerating

#219

Post by aianus »

sbierwagen wrote: post #48
aianus wrote: post #19

Earlier quoted context omitted.

Why is it so dumb to buy a used car off the lot? I bought an Audi off lease last year. It's still under warranty, free maintenance (until 80k km), low mileage (37k km), fully loaded with options, and I saved $20k vs a new one.

Most used car dealers don't give you a warranty: https://seattle.craigslist.org/skc/ctd/d/2015-bmw-x5-35i-awd... Note the conspicious absence of the word "warranty" on this listing. If the car falls apart as you drive off the lot, you're out $35K. CPO cars have a warranty, which sharply limits your downside risk. Buying a used car from a manufacturer is a much better deal than buying it from a third party.

The manufacturer warranty has a mileage limit which at least in my case was 80k km (less than 60k miles); that's probably why it's missing from the listing you linked to.

Re: A glut has used-car depreciation accelerating

#220

Post by yuhong »

damnfine wrote: post #139
mrfusion wrote: post #120

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 used as work, and puzzlingly, luxury cars in the US. They hold their value well because of the new standards seem to be making long term maintanince harder and more expensive. Pre-DEF Desiel engines, Normally aspirated V8 engines, Thicker sheet metal, Less sensors to replace over rough use are a great example of factors making many used trucks sell for more than new.

My hope is that electric trucks will be more popular.
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