Interesting and Informative Video about CarMax

[TXSTYLE]

CarMax and the Used car market in general going into 2023.
This guy made a very eye opening and informed video about CerMax about a month ago. This one is just as interesting. Just sharing.

[DrFerry]

The phenomena of CarMAx experiencing demand destruction reared its head as early as April 2022 right after the FED began raising interest rates in March 2022. CarMax has been "the canary in the coal mine" and this came right on the heals of a previously hot used car market, as the free money 'stimulus check' handouts were being put to use buying used cars. Then, in September 2022, CarMax revealed horrendous results to shareholders. Fast forward to today, after a period of the FED raising interest rates at the most rapid pace in history (ever).

The used car dealer guy in the video is right. By summer of 2023 Car Dealers (both used and new) will be begging people to buy cars as demand destruction escalates and deflation bites them (they'll have to lower their prices and/or take losses on existing inventory). Sure Car Dealers will lay off some people to reduce costs, but right now CarMax and others are stuck with large inventory investments in the face of diminishing demand.

Ergo by July 2023, those consumers who are able to buy a new or used car will benefit from much lower prices well, well, below MSRP IMO. If you're interested, or just about to be "n the market" check out these articles from earlier last year.

"Horrendous" CarMax Results Confirm Fed Has Successfully Pushed US Economy Off A Cliff
https://www.zerohedge.com/economics/...-economy-cliff
.
CarMax Confirms Demand Destruction As Used-Car Prices Tumble
https://www.zerohedge.com/markets/ca...-prices-tumble
.

[TXSTYLE]

Originally Posted by DrFerry

The phenomena of CarMAx experiencing demand destruction reared its head as early as April 2022 right after the FED began raising interest rates in March 2022. CarMax has been "the canary in the coal mine" and this came right on the heals of a previously hot used car market, as the free money 'stimulus check' handouts were being put to use buying used cars. Then, in September 2022, CarMax revealed horrendous results to shareholders. Fast forward to today, after a period of the FED raising interest rates at the most rapid pace in history (ever).

The used car dealer guy in the video is right. By summer of 2023 Car Dealers (both used and new) will be begging people to buy cars as demand destruction escalates and deflation bites them (they'll have to lower their prices and/or take losses on existing inventory). Sure Car Dealers will lay off some people to reduce costs, but right now CarMax and others are stuck with large inventory investments in the face of diminishing demand.

Ergo by July 2023, those consumers who are able to buy a new or used car will benefit from much lower prices well, well, below MSRP IMO. If you're interested, or just about to be "n the market" check out these articles from earlier last year.

"Horrendous" CarMax Results Confirm Fed Has Successfully Pushed US Economy Off A Cliff
https://www.zerohedge.com/economics/...-economy-cliff
.
CarMax Confirms Demand Destruction As Used-Car Prices Tumble
https://www.zerohedge.com/markets/ca...-prices-tumble
.

Very true. I fit this category, as I'm looking to purchase not one but two vehicles this year. Both most likely pre-owned. My initial plan was to buy the first in Spring and the other in Summer.
Now I plan to be patient and revalue in late July or August.

[M3WC]

I have mentioned this in another thread. These dealerships and resellers are playing a big game of chicken right now. The longer they wait to wholesale their inventory, the more risk they are taking on. My opinion they are going to end up on the losing end. They all paid sky high prices for their current inventory and values continue to plummet. Ask for a trade-in quote from these dealers, you will see what they really think used car values are at. It isn’t anywhere near what they have their used inventory priced at.

[RM7]

Originally Posted by DrFerry

The phenomena of CarMAx experiencing demand destruction reared its head as early as April 2022 right after the FED began raising interest rates in March 2022. CarMax has been "the canary in the coal mine" and this came right on the heals of a previously hot used car market, as the free money 'stimulus check' handouts were being put to use buying used cars. Then, in September 2022, CarMax revealed horrendous results to shareholders. Fast forward to today, after a period of the FED raising interest rates at the most rapid pace in history (ever).

The used car dealer guy in the video is right. By summer of 2023 Car Dealers (both used and new) will be begging people to buy cars as demand destruction escalates and deflation bites them (they'll have to lower their prices and/or take losses on existing inventory). Sure Car Dealers will lay off some people to reduce costs, but right now CarMax and others are stuck with large inventory investments in the face of diminishing demand.

Ergo by July 2023, those consumers who are able to buy a new or used car will benefit from much lower prices well, well, below MSRP IMO. If you're interested, or just about to be "n the market" check out these articles from earlier last year.

"Horrendous" CarMax Results Confirm Fed Has Successfully Pushed US Economy Off A Cliff
https://www.zerohedge.com/economics/...-economy-cliff
.
CarMax Confirms Demand Destruction As Used-Car Prices Tumble
https://www.zerohedge.com/markets/ca...-prices-tumble
.

Man I hope this happens to used airplanes too....

[chris719]

This guy's channel is kind of weird. It's a bunch of alarmist sounding titles. Might be right on this one, but it's a bit odd.

[NickyC]

Interesting, I always thought Carmax would be OK. During the height of the used car craziness, I took a couple of cars there for appraisals. Carmax gave me offers far lower than any other places, in fact on the G82 they offered $10k less than the BMW dealer a few miles from my house. Their offers were so ridiculously low I thought at the time they must really be planning ahead for this bubble to pop.

Now I look at their site, and their cars are horribly overpriced in the current market. They're still asking early 2022 pricing where we all know most prices have gone down 15-20% since then. Very odd deal.

I'm personally still of the belief we're going to see a continued decrease in pricing for the next 12 months or so, then massive inflation will commence as the money printers are going to have be turned on once again to save this DOA economy. As the money printers get flipped on, interest rates are going to have to come down, and free money days will be here until the complete collapse of the system. There's simply no way out of our current monetary nightmare, a complete crash is only a matter of time. I think a lot of these dealers are holding on believing the same thing.

[Sedoy]

I got dealership access to major actions and routinely check market prices. The prices are down but not as much as everybody thinks. Still not close to pre-covid prices. I think there are 2 major reasons for that:
1. New car sales are way down due to higher rates and the overall economy, so dealers not getting fresh trade-ins, which makes the inventory for used cars very poor and limited. I barely get 5 cars for my preset searches, in contrast back in the day I easily could find 10+ cars. People are holding on to their old cars.
2. Most dealers/traders still live in 2021-2022 hot market mindset. It will take months before they adapt to the new reality.

[DrFerry]

Originally Posted by NickyC

Interesting, I always thought Carmax would be OK. During the height of the used car craziness, I took a couple of cars there for appraisals. Carmax gave me offers far lower than any other places, in fact on the G82 they offered $10k less than the BMW dealer a few miles from my house. Their offers were so ridiculously low I thought at the time they must really be planning ahead for this bubble to pop.

Now I look at their site, and their cars are horribly overpriced in the current market. They're still asking early 2022 pricing where we all know most prices have gone down 15-20% since then. Very odd deal.

I'm personally still of the belief we're going to see a continued decrease in pricing for the next 12 months or so, then massive inflation will commence as the money printers are going to have be turned on once again to save this DOA economy. As the money printers get flipped on, interest rates are going to have to come down, and free money days will be here until the complete collapse of the system. There's simply no way out of our current monetary nightmare, a complete crash is only a matter of time. I think a lot of these dealers are holding on believing the same thing.

I think we’re also seeing deflation starting to hit the Bring A Trailer auction website. Not for every brand or car but definitely for some. Take a look at this 2009 E92 M3 with one day left in the auction struggling to break $13K. I watch the E9X market fairly closely and it seems to me right now prices are falling.

https://bringatrailer.com/listing/20...ign=2023-02-01

[TXSTYLE]

Originally Posted by DrFerry

I think we’re also seeing deflation also starting to hit the Bring A Trailer auction website. Not for every brand or[b]car but definitely for some. Take a look at this 2009 E92 M3 with one day left in the auction struggling to break $13K. I watch the E9X market fairly closely and it seems to me right now prices are falling .

https://bringatrailer.com/listing/20...ign=2023-02-01

They definitely are. And will continue.

I have a good friend who's relative owns a luxury pre owned dealer. He is struggling big time to move anything.

[Sedoy]

One day left does not mean much, I highly doubt it will sell at this low price. Recent auction prices for those are still over 20K, and clean ones sell for $25K+. Sooo not there yet...

Originally Posted by DrFerry

I think we’re also seeing deflation also starting to hit the Bring A Trailer auction website. Not for every brand or car but definitely for some. Take a look at this 2009 E92 M3 with one day left in the auction struggling to break $13K. I watch the E9X market fairly closely and it seems to me right now prices are falling.

https://bringatrailer.com/listing/20...ign=2023-02-01

[DrFerry]

Originally Posted by Sedoy

One day left does not mean much, I highly doubt it will sell at this low price. Recent auction prices for those are still over 20K, and clean ones sell for $25K+. Sooo not there yet...

Perhaps you're right, but usually with one day left the auction bids are in the high teens or low $20K region for an '09 E92 M3 or higher - just as you pointed out above. However, not so far with this particular car. Now it has 21hrs left and is still at $12.5K. I'm keeping in mind this is the BAT crowd; so there may very well be some lurkers hiding waiting to tender bids in the last hours. But at the same time the BAT crowd can also be very competitive. I would've thought by now bids would be escalating. Perhaps there's some other factor I'm unaware of? Though the lot listing says "clean car fax, rod bearings and TAs done" and some other goodies too. It looks pretty clean inside and out to me with 83K miles, but yet here it is stuck at $12.75K.. I'll keep watching it, but I hope this isn't the canary in the coal mine. Time will tell..

[Alfisti]

Yeah to me that's low, miles and all.

[Sedoy]

Here you go $18.5K already... this one seems like in pretty good condition but you never know with those sensitive performance vehicles how it was maintained and driven. You can try to call the dealer where it was maintained from carfax, but in my experience, those guys never disclose anything unless you are the owner. Good luck.

Originally Posted by DrFerry

Perhaps you're right, but usually with one day left the auction bids are in the high teens or low $20K region for an '09 E92 M3 or higher - just as you pointed out above. However, not so far with this particular car. Now it has 21hrs left and is still at $12.5K. I'm keeping in mind this is the BAT crowd; so there may very well be some lurkers hiding waiting to tender bids in the last hours. But at the same time the BAT crowd can also be very competitive. I would've thought by now bids would be escalating. Perhaps there's some other factor I'm unaware of? Though the lot listing says "clean car fax, rod bearings and TAs done" and some other goodies too. It looks pretty clean inside and out to me with 83K miles, but yet here it is stuck at $12.75K.. I'll keep watching it, but I hope this isn't the canary in the coal mine. Time will tell..

[DrFerry]

Originally Posted by Sedoy

Here you go $18.5K already... this one seems like in pretty good condition but you never know with those sensitive performance vehicles how it was maintained and driven. You can try to call the dealer where it was maintained from carfax, but in my experience, those guys never disclose anything unless you are the owner. Good luck.

Yep it’s going up finally but this same car has a recent BAT history. In June of 2022 it sold on BAT to the current owner for $30K. I don’t expect it will get that high just 8 months later.. There’s another one that just sold today on BAT for over $4K less than it sold for in August 2022 on BAT.
.

[DrFerry]

Here’s one that sold today on BAT for more than it did last time. Fierce bidding at the end of the auction. Went up $6K in 12 minutes. I guess it depends how committed a buyer is and how deep his pockets as well as the individual car itself.
.

[Sedoy]

Yep, that's what I was saying we are not there yet as far as prices, plus inventory is very low now and clean finds such this one still hold there value.

Originally Posted by DrFerry

Here’s one that sold today on BAT for more than it did last time. Fierce bidding at the end of the auction. Went up $6K in 12 minutes. I guess it depends how committed a buyer is and how deep his pockets as well as the individual car itself.
.

[Donatello.]

Originally Posted by NickyC

Interesting, I always thought Carmax would be OK. During the height of the used car craziness, I took a couple of cars there for appraisals. Carmax gave me offers far lower than any other places, in fact on the G82 they offered $10k less than the BMW dealer a few miles from my house. Their offers were so ridiculously low I thought at the time they must really be planning ahead for this bubble to pop.

Now I look at their site, and their cars are horribly overpriced in the current market. They're still asking early 2022 pricing where we all know most prices have gone down 15-20% since then. Very odd deal.

I'm personally still of the belief we're going to see a continued decrease in pricing for the next 12 months or so, then massive inflation will commence as the money printers are going to have be turned on once again to save this DOA economy. As the money printers get flipped on, interest rates are going to have to come down, and free money days will be here until the complete collapse of the system. There's simply no way out of our current monetary nightmare, a complete crash is only a matter of time. I think a lot of these dealers are holding on believing the same thing.

I sold a car to Carmax in 2018 or 2019 and their offer was more than fair.

With that said, they have always been very overpriced on their inventory. Vroom & Carvana are far worse, though.

I've been sitting on my $ just waiting. Anyone thinking the market won't correct & only stay same or get higher are out of touch with reality & history. Same for the housing market.

[Donatello.]

Originally Posted by DrFerry

Here’s one that sold today on BAT for more than it did last time. Fierce bidding at the end of the auction. Went up $6K in 12 minutes. I guess it depends how committed a buyer is and how deep his pockets as well as the individual car itself.
.

BAT does not represent the norm or whole, though. That's the online version of BJ & Mecum. People with more $ than brains overpaying on most of the cars sold on there.

[DrFerry]

Originally Posted by Sedoy

Yep, that's what I was saying we are not there yet as far as prices, plus inventory is very low now and clean finds such this one still hold there value.

Perhaps so. I do think it’s a mixed bag at the moment in the market place and quite car dependant (color, trans, mileage, condition etc.) as well as buyer commitment dependent, because I posted one ☝️ above which sold on BAT for $4K less than it had done previously. I agree that example is only one data point though.

The Manheim used car index ticked up slightly in December ‘22 after being up and down throughout 2022. I hope you’re right and the E9X M3 is different and holds its value. There’s still inventory on m3list.com.

https://www.m3list.com/copy-of-e90-m3-1
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