AMIRZA786

Looks like as a lot of people have predicted, the .dot com that's the used car market is coming to an end. In another words, consumers have had it:

https://wolfstreet.com/2022/04/12/ca...ady-collapsed/

BTW, sorry about the title, I meant for it to be "Used car market as we now know it may be coming to an end". I wish we had the ability to edit titles...

Motorola

The premise of this article completely ignores the fact that sales are down not because consumers have "had it", it's that supply of both used and new cars has dramatically dwindled. If consumers truly didn't stand it anymore, you would be seeing greater supply and lower prices as the market balances itself out.

jimbosr1

I think everybody saw this coming. The new cars will do the same thing as we will be soon be in a recession. Bank on it!

AMIRZA786

Well one way to find out is next month I'm going to see if the Lexus dealership will still offer me the same amount for my IS350 they did a few months back, which was insane

Lexmex

I still do not think prices are or will be back to a 'normal' level for probably 6+ months, we will know much more going into Christmas time. I usually see places like Carvana and to a lesser extent Carmax prices going way above private sellers and even other car brand dealers selling used cars. A few years ago I got my 2016 CT (a few months before Covid hit) at HGREG and at the time I could not find in the private market a similar car in similar year (forget about mileage) as I found that day. That was then. With my 2017 CT (the 16 got totaled unexpectedly one day not by my fault ), I ended up going to a Mercedes dealer that had it, and when I compared throughout South Florida at the time what was available, I could not find anything private market in the 15-17 years (go those years due to it having the full engine upgrades over the 11-14 years), Carvana and other non-dealer outlets had prices way above the CT I got that day (actually a bargain that came into pretty much one day) and I got it the next. Still look back a few months and still a great deal. However, I have friends struggling to find the kind of used cars (forgetting even mileage) that they want unlike several years ago.

TangoRed

Exactly. That's why customers who did buy are still paying high prices. Things may level off or decrease slightly but we're not going to see a used car price crash anytime soon. To assume otherwise is wishful thinking.

ABC

I believe that the pendulum will swing back at some point, but who knows when - 2 years? 5 year? a decade? We are still up ~30% on used car prices YOY. And a bit more than that since covid started.

https://www.cargurus.com/Cars/price-trends/

Allen K

iTrader: (4)

Got you covered

AMIRZA786

Thanks! One more favor...can you remove the "it" before "may be coming to an end"? Never mind, I think it's fine.

swajames

One data point may mislead as it only describes the conditions on the day - current inventory, is there a buyer lined up and so on. I've seen offers on the same car going up and down over the past few months.

The used car market isn't going to crash anytime soon as supply is still very constrained and often what is delivered is missing important features. That Vroom/Carvana etc are struggling and that their stock is in the crapper is a reflection on their model, supply and margins, not necessarily the used car market as a whole.

We may not see such extreme upward pressure, but it's likely prices will remain inflated for a while. You also have to remember how the market was before - in most cases, driving off the lot saw you take a 20% hit. Maintaining value is a significantly better position to be in, even if the days of new/used car appreciation do come to an end.

But you only have to look at the lots in popular markets to see that inventory is low, which is why prices are high.

LexBob2

I just checked CarMax and got an offer on my 2019 BMW X3. Their offer was +$1,200 higher than 5 weeks ago. I haven't rechecked Carvan or Vroom yet.

UltraLux22

I’ve sold 3 autos, 1 Honda to Carvana and 2 Lexus’ to CarMax. Honda was 1 year in on a 3 year lease and 2 Lexus’ to Carmax 2 years in on 3 year leases. All high end trims. Carvana was $2k over CarMax in late 2020 on the Honda Accord touring, . Carmax was always $2-3k higher than Carvana and at times $4k+ higher than a Lexus dealer (late 20’ and early 22’) on the Lexus models. I checked weekly and sometimes daily on each platform for the Lexus’ I was looking to sell. The range could fluctuate as much as $1500 or more during the course of the week. Often midweek and early weekend prompted higher offers but that was never a consistent bet. It felt like gambling to some degree because there were weeks the offer would drop $2k . Then rebound the next week and rise higher. Part of my success was obtaining fantastic deals then flipping at the right times. I flipped a $12k single pay lease on a 2019 accord touring after 13 months for $8100 in late 2020 to carvana. I flipped a 2019 es350 lux for $8900 profit in Jan. 22 to Carmax. Carmax was always higher than any other platform for selling Lexus. I attributed it to the fact that nationally they had fewer high-end Lexus trims for the ES 350 than the other platforms. Therefore they presented significantly higher offers.