Used Car Prices are Skyrocketing

[xpin2winx]

Bought a 2005 corolla with 101k miles on it, 5 years ago for $3800. KBB Fair value for is more than what i paid for it 5 years ago

[tng83]

Everything is skyrocketing in this economy.

I have a used car dealership and it’s insane how much I’m getting compared to this time last year.

Inflation is real boyos.

You have a dealership and you think inflation is the cause?

It's lack of new cars combined with tax/stimulus money. Can't buy new ones and demand for auction vehicles is driving prices up.

[lntense]

You have a dealership and you think inflation is the cause?

It's lack of new cars combined with tax/stimulus money. Can't buy new ones and demand for auction vehicles is driving prices up.

What do you think stimulus money will contribute to?

It’s a combination of factors obviously. I’m saying prices on vehicles will go up permanently to a degree even when production increases.


Demand is high and money is high, supply is somewhat low. We are just starting to feel the effects of all this printed money.

[SouthDakotaBrah]

You have a dealership and you think inflation is the cause?

It's lack of new cars combined with tax/stimulus money. Can't buy new ones and demand for auction vehicles is driving prices up.

durr what is inflation

https://www.xe.com/currencyconverter...rom=USD&To=CNY

[Azzurri]

I mean inflation does hurt, but it has to do with the lack of inventory that's keeping these prices insane.

[katya422]

Happens that I've read something in the past few days about car prices and it has charts.

I constructed the WOLF STREET “Pickup Truck & Car Price Index,” which takes the Manufacturer’s Suggested Retail Price (MSRP) by model year of the best-selling truck and of the best-selling car over the decades and compares them to the CPI for new vehicles. The discounts and incentives are there every year and so cancel out when comparing year-over-year price increases.

Since 1990, the CPI for new vehicles has risen by 22.5% (green line). Over the same period, the base MSRP of the Toyota Camry LE has soared 68% (red line); and the base MSRP of the Ford F-150 XLT has skyrocketed 170% (blue line):



In dollars terms, since 1990: The Camry LE base MSRP rose from $14,658 to $24,970; the F-150 XLT base MSRP rose from $12,986 to $35,050; and the CPI for new vehicles rose from an index value of 121.9 to a value of 149.4, and stunningly is today just a tad above where it had been 23 year ago in January 1997:



A big part of the difference between actual price increases and the CPI for new vehicles are the “hedonic quality adjustments” that started to be applied with increasing aggressiveness in the late 1990s through today. Vehicles have gotten a lot more sophisticated over those years. The hedonic quality adjustments remove the costs of these quality improvements from the CPI.

Even if this is calculated properly it puts the consumer in a bind because at the lower 60% of the income scale, wages have barely kept up with the overall CPI, but have not nearly kept up with the price increases deemed to be due to quality improvements.

Consumers have responded by buying fewer new vehicles, switching from new to used vehicles, driving vehicles for longer, from 8.9 years on average in 2000 to 11.9 years in 2020, and financing them for longer, with seven-year auto loans now being all the rage.

The CPI for used vehicles is also subject to hedonic quality adjustments. So the same scenario is playing out here. But, but, but… among the distortions of the Pandemic was a sudden and historic spike in used vehicle prices over the summer that couldn’t be removed with hedonic quality adjustments. In January, the CPI for used vehicles was still up 10% from a year ago.:

https://wolfstreet.com/2021/02/10/do...y-adjustments/

Trucks are stupidly expensive IME.

I know that I purchased a Toyota Corolla [base model IIRC] for about $13K in 1999 and a Honda Fit Sport for around $18K in 2007. The Corolla now "starts at $20,025" while the Fit hasn't moved and I guess has gotten less expensive when you consider inflation. Mine is actually fun to drive though, if kind of noisy. And I don't have a CVT.

[nosirrahx]

You have a dealership and you think inflation is the cause?

It's lack of new cars combined with tax/stimulus money. Can't buy new ones and demand for auction vehicles is driving prices up.

So ..... inflation. Give it a year or 2 and no one will be able to deny it anymore. The asset holders will be fine and the poor with be screwed. "Just give them $ until things are fixed" does not have a good track record.

[EliteBrah]

the 2 most expensive things people normally purchase, cars and houses, are skyrocketing
inflation of peace

[SouthDakotaBrah]

So ..... inflation. Give it a year or 2 and no one will be able to deny it anymore. The asset holders will be fine and the poor with be screwed. "Just give them $ until things are fixed" does not have a good track record.

I can still go to my local Mexican restaurant and buy a burrito for $7.99. There's a lag between commodity markets and the retail pricing that consumers pay for goods, and the separation between the two is generally larger and more delayed when it comes to local, mom-and-pop shops that don't have dedicated financial analysts.

Today, we're seeing the largest of Fortune 500 consumer retailers adjusting their prices based on rising commodity prices - it is only a matter of time before this spreads to the rest of the industries in our economy. It will be a big surprise when retail prices of consumer goods are all 20-30% higher next year than they are today. Even when the COVID-related supply chain constraints for new cars are resolved, new car prices will still be higher than they are today (inflation of peace) and the used car "bubble" likely won't show signs of waning as long as the federal reserve keeps interest rates where they are.

https://markets.businessinsider.com/...1-4-1030335277

[Zackad]

I could probably sell my truck right now for $5k more than I paid for it, and i've put on 24k miles in 1.5 years. Could probably fetch even more if I was willing to wait.

[Antonio519]

The cheapest gt4 on the market right now is 82,500 at a dealer, it has 4k more miles than mine and is a wayyyy lower spec and a less desirable color (about 25k less msrp) and I bought mine for cheaper.

feels good mane

[Retoaded]

I keep hearing it's because the shortage of new cars when mfgs had to shut down due to COVID. But it still doesn't make sense. You'd think they would have caught up by now?

Its the computer chips in the cars they are waiting on.

[lockdev]

But no inflation guise I swear!

Inflation is fuarking insane.

The Fed changes their definition to fit their narrative. Like they seriously stop considering things to be part of the inflation rate when it gets too high.

Right now, it's "zomg pandemic bad, have liquidity". The real reason they are doing this is because we live in a corrupt-as-fuarking-hell country where banks are getting filthy rich by siphoning the value out of the dollar.

[Jms89]

the poors are out in droves using their income tax return and "stimmy" like its going out of style. Noticed this last week driving past a dealer. Give it a year, we will be knee deep in some 2008-2009 chit again with obama part 2 in office.

[FoxMcCocks]

Only makes sense to sell if you can get by without that car or if you can get a good deal on a new car which is hard right now

It’s like housing prices. So your house has appreciated, great. But if you sell it you’re gonna buy something equally overpriced so it makes no difference

[HairyWBush]

Only makes sense to sell if you can get by without that car or if you can get a good deal on a new car which is hard right now

It’s like housing prices. So your house has appreciated, great. But if you sell it you’re gonna buy something equally overpriced so it makes no difference

this

[lntense]

I mean inflation does hurt, but it has to do with the lack of inventory that's keeping these prices insane.

Yes. Lack of inventory.


And what is one of the primary reasons there is lack of inventory right now?



Damn. Do you people not know what early signs of inflation are? Probably the same fellas who actually believe the current CPI data.

[Venom08]

Would it be a good time to become a car salesman then?

[Azzurri]

Yes. Lack of inventory.


And what is one of the primary reasons there is lack of inventory right now?



Damn. Do you people not know what early signs of inflation are? Probably the same fellas who actually believe the current CPI data.

Yea, Microchip shortages on new cars. This leads to people buying used cars because new cars are on hold.

I'm not saying inflation isn't playing a part with all the current printed money pumped into the economy due to covid, but the main culprit is the lack of supply due new cars being on hold, and the need for vehicles when the country started opening and the need for a new/used vehicle went back to normalish purchasing ways. It cleaned out lots

[USAPump]

Yes. Lack of inventory.


And what is one of the primary reasons there is lack of inventory right now?



Damn. Do you people not know what early signs of inflation are? Probably the same fellas who actually believe the current CPI data.

nothing more dangerous than a retard who thinks he isnt retarded




the shortage of new cars is largely due to a market wide chip shortage and the fact that tons of plants were shut down last year.

[Retoaded]

Only makes sense to sell if you can get by without that car or if you can get a good deal on a new car which is hard right now

It’s like housing prices. So your house has appreciated, great. But if you sell it you’re gonna buy something equally overpriced so it makes no difference

I just so happen to have an extra car I'll be selling in about 2-3 months. Hope the prices hold until then!

[78novacaine]

I suspect the (D)s are going to lose the next election on purpose so they can suddenly see and report on all the negative financial fallout that was definitely not caused by the lockdowns but instead the next (R) president.

It's always the last guy's fault. Unless the guy currently in office is not your guy, and the last guy was your guy. In that case it's the current guy's fault and the last guy in office carries zero fault.

[RobParks2M]

Would it be a good time to become a car salesman then?

BRB usedcarsalesman brah going HAM right now. Maybe that's why he stopped making new accounts for a bit.

[engj]

Happens that I've read something in the past few days about car prices and it has charts.



https://wolfstreet.com/2021/02/10/do...y-adjustments/

Trucks are stupidly expensive IME.

This doesnt account for increased value in the base models of pickups.

Every vehicle has seen improvements, but the base load of a 1990 F150 compared to today is a mile apart.

Houses have increased faster than inflation as well, but average house sizes have doubled.

[lntense]

nothing more dangerous than a retard who thinks he isnt retarded




the shortage of new cars is largely due to a market wide chip shortage and the fact that tons of plants were shut down last year.

You believe the reason for the increased demand in the market is mostly due to a chip shortage? It's one factor.



Good luck in your future finance goals. lol

[ImJJames]

Recently same dealership I bought my car from is trying to buy it back for 5k more, its been a year since I bought it. (Camaro 2ss)

[FrankGrimesJr]

Why are people so happy about used cars prices going up? When you have to buy a new replacement vehicle it is also up. It's not a win-win situation.

[Azzurri]

Why are people so happy about used cars prices going up? When you have to buy a new replacement vehicle it is also up. It's not a win-win situation.

If you're going new then I don't think it's an issue as you can still get good deals on new cars depending on the model and such. I mean if it's some limited ot hard to get car/suv/truck then ok. But like an Accord or a civic, you can still get some great deals.

SO if you're getting top dollar for your used car and getting a good deal on a new car, why wouldn't you be happy??

[kovalchuk71]

BRB $16.5k for my 2013 335i with 76k miles.

Paid $18.2k three years ago. Only in clown world would a BMW depreciate at an average of $600/yr. Fukin shocked.

[dogorman7]

Yup. Logged in just to comment.

I bought my old reliable 2000 SD v10 for 7k ( guy wanted 8 ) with only 116k on the clock and 4x4 back in May of last year.

Old but it’s well taken care of and reliable as ****. Extended cab , 8 ft bed , looks great with aggressive tires and a small lift.

I got hit in December and I’m just now getting my payout settled with a lawyer because the guy who tboned me was uninsured so the rental car company will give me the state minimum coverage ( I didn’t carry full coverage because I was with State Farm and they wanted to fuk me for it).

Anyway she still runs good and I’ve been offered what I paid for her with passenger side door and rocker panel damage , lmao u wut m8 ?

I’m not selling my Ford but even so looking for a second vehicle is sodomizing rn because I know a guy who can fix it for really cheap. Friend of a shady friend.

I’m moving in with my sister in a much more crowded city and want a fun car for everyday driving with awd and preferably a hatch or “wagon” to carry all my tradie tools around.


Old wrxs are out of the question , brb 10k for 250k mile 02 sedan or wagon.

Dodge Magnums Are overpriced but are a little long concerning my parking worries

12k+ for a 150-170k hemi lmao , I bet it burns a **** ton of oil and smokes because of a dropped valve at that mileage


The only decent priced options I see are the Golf GTI ( not awd ) or its more complicated cousin

Audi A4 avant. Audi’s are sexy and I love their awd system but man , if that timing chain wasn’t done or if it starts gulping oil you’re ****ed.

DIY wrenching won’t help you here. None of the other meticulous small stuff bothers me.

It’s ****ed boyos , my guy can fix my truck for 2-3 k no joke and I probably can spend 10k after I save a little after that payout

What am I to do ? Give up and buy a hatch civic ?