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      09-14-2020, 10:13 PM   #221
RMachuca3d
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here is some nice data to go with this discussion:

https://www.experian.com/content/dam...safm-final.pdf
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      09-14-2020, 11:14 PM   #222
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Originally Posted by RMachuca3d View Post
here is some nice data to go with this discussion:

https://www.experian.com/content/dam...safm-final.pdf
RMachuca3d Wow that's a great slide deck, thanks. Lots to chew on, lots of insights.

One point is the Michigan leasing phenomenon, it seems real. I have relatives in Michigan and there is a strong leasing culture there. I prefer to pay cash in full and to operate the vehicle to 200k miles, so I don't fit the program there.
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      09-15-2020, 01:53 AM   #223
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I'll throw in my .02 cents. There are a few reasons I see as to why used car prices are high:
Unemployment money: I have heard of quite a few people putting $1200- $2400 as down payment. The same amount that people got from the government. A lot of people did not even need the extra money, so it was like a bonus. An extra $300-600 every week on top of unemployment for what 4 months. Thats $4,800-9,600 for each person. What if you and your spouse where unemployed? double it.
Now that money is suposeto to to rent, morgage etc. but if your not paying your your rent and morgage etc. extra money!!
Low intrest rates: alot of car com. have them, more car for less money. People are refi. their home loans and pulling money out or just saving the money from the low rates.
Covid 19: People don't want to use Uber/Lyft anymore. They dont want to use public transportation. They would rather have their own car now.
Low supply:With a lot of parts made in China and others new cars/ trucks are out of stock. you go to the dealer for a new car/truck and theirs only a few left. The dealer will want top dollar for them. When the new are gone, then they sell used. Which raises the price on used cars/trucks.
Looking back it seems people miscalculated the goverment injection, lower supply, higher demand.
I also thought the supply would be the same and the demand would fall off the clif. I also thought people would be selling what ever they could stay-a-float. I just think its going to happen much latter now. Maybe 2nd quarter of 2021. Thank you

looking back it seems
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      09-15-2020, 05:43 PM   #224
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Depends on the type and brand. High ends have a high depreciation rate and used ones aren't selling well because people want the next new model and not a used one. Underwriters are also throwing a huge wrench into things by not financing anything over 5 yrs. old.
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      09-15-2020, 06:46 PM   #225
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Depends on the type and brand. High ends have a high depreciation rate and used ones aren't selling well because people want the next new model and not a used one. Underwriters are also throwing a huge wrench into things by not financing anything over 5 yrs. old.
This.

Annnd. You have to remember that there is pent up demand from all of the uncertainty back in March which scared dealers from buying inventory at auction to remarket. I took advantage of this and sold my Used car for what I could have gotten two years ago and leased a BMW at an employee rate. By that, I mean Honda Accord money.

If their will be a collapse, it will be in the new car market. Used cars are always seen as a better value in uncertain times, unless you are certain your getting a better deal on new(usually only happens in the compact market).
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      09-15-2020, 09:31 PM   #226
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It's also interesting to me to have learned the used market is nearly 3x the size of the new market, in terms of units sold per year. It's more liquid market based on number of transactions per year.

Supply and demand, as has been mentioned several times on this thread, is the leading cause for firm to higher used vehicle prices throughout 2020. Demand must have been firm, based on the price and supply data. Consumers demanding a new or nearly new vehicles bought what was available. For a period of time, used vehicles were more prevalent than new vehicles, because of factory shutdowns. This is still the case, to a lesser extent than earlier in the year. My local MB dealer is getting spotty new vehicle deliveries and says the Vance, AL facility continues to have C19-related component supplier shortages.
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      09-23-2020, 09:11 AM   #227
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More economic strength suggesting a collapse in used car prices is less likely than before.

https://www.fhfa.gov/AboutUs/Reports...July-2020.aspx

Home price appreciation gives some people the feeling of wealth, increasing confidence to borrow and/or spend. It also allows people to sell their home for a fair, in the eyes of the seller, price so that people can move on to the next chapter of their lives.
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      09-24-2020, 01:23 PM   #228
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I just walked out of my local VW/Audi dealer and they said they are not receiving any new Audis until December at the earliest. The Atlas is made in Chattanooga and the Tiguan is made in Mexico, and these are coming into the dealer.

So for people that must have an Audi, the options in my area are a recent model used vehicle (upward pressure on price) or search far and wide for a new model (upward pressure on price). Supply of new Audis in my area is reduced at the present time.

Last edited by chassis; 09-24-2020 at 01:36 PM..
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      10-12-2020, 05:22 PM   #229
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Comment from Econoday on August's CPI number, provided via Fidelity:

"If not for a price surge in used cars, improvement in consumer inflation would have been marginal in August."

Is it time to stick a fork in the hope of a price crash of our wish list cars?

Last edited by chassis; 10-12-2020 at 09:22 PM..
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      10-24-2020, 12:25 AM   #230
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Quote:
Originally Posted by autoart View Post
I'll throw in my .02 cents. There are a few reasons I see as to why used car prices are high:
Unemployment money: I have heard of quite a few people putting $1200- $2400 as down payment. The same amount that people got from the government. A lot of people did not even need the extra money, so it was like a bonus. An extra $300-600 every week on top of unemployment for what 4 months. Thats $4,800-9,600 for each person. What if you and your spouse where unemployed? double it.
Now that money is suposeto to to rent, morgage etc. but if your not paying your your rent and morgage etc. extra money!! Instead you can just rent a car like range rover evoque https://realcar.nyc/rent-a-range-rover-evoque yourself and that's it.
Low intrest rates: alot of car com. have them, more car for less money. People are refi. their home loans and pulling money out or just saving the money from the low rates.
Covid 19: People don't want to use Uber/Lyft anymore. They dont want to use public transportation. They would rather have their own car now.
Low supply:With a lot of parts made in China and others new cars/ trucks are out of stock. you go to the dealer for a new car/truck and theirs only a few left. The dealer will want top dollar for them. When the new are gone, then they sell used. Which raises the price on used cars/trucks.
Looking back it seems people miscalculated the goverment injection, lower supply, higher demand.
I also thought the supply would be the same and the demand would fall off the clif. I also thought people would be selling what ever they could stay-a-float. I just think its going to happen much latter now. Maybe 2nd quarter of 2021. Thank you

looking back it seems
Imo you are diggin in too deep. Not sure that the low prices are coming from this point to be honest.
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