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      09-14-2020, 10:14 PM   #221
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Quote:
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, 12:53 AM   #222
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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, 04:43 PM   #223
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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, 05:46 PM   #224
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Originally Posted by _g_cypher_ View Post
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, 08:31 PM   #225
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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, 08:11 AM   #226
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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, 12:23 PM   #227
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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 12:36 PM..
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      10-12-2020, 04:22 PM   #228
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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 08:22 PM..
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      10-23-2020, 11:25 PM   #229
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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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      12-03-2020, 11:43 AM   #230
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Latest government data shows a small decline in vehicle sales. While one data point does not make a trend, it’s something to note. My local MB dealer said things were slow in October.

Maybe some deals will materialize for our low mileage, gently used preowned target vehicles?
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      12-03-2020, 01:11 PM   #231
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According to CarGuru's used car price tracker, prices are ever so slightly starting to track back downward the last couple weeks. In general prices are down 0.3% from the peak in early to mid-November.
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      12-20-2020, 03:49 PM   #232
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      12-20-2020, 08:33 PM   #233
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I still can't believe this market. My 3-door GTI MK7 has gone up since the beginning of the year. Yet unemployment is still high and the small businesses that fuel the country are suffering because of an almost year long shut down.

How has this market not collapsed with auto debt being at an all time high?!

Edit: I have no interest in selling my cars and buying another car. My cars are all paid off and driving them for as long as feasibly possible.
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      12-20-2020, 08:53 PM   #234
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Quote:
Originally Posted by Gray_Panther View Post
I still can't believe this market. My 3-door GTI MK7 has gone up since the beginning of the year. Yet unemployment is still high and the small businesses that fuel the country are suffering because of an almost year long shut down.

How has this market not collapsed with auto debt being at an all time high?!
Nothing makes sense any longer. I gave up trying to predict how things are going to go because it's just embarrassing now, but I have learned one thing since 2007.

Don't fight the Fed.
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      12-20-2020, 10:25 PM   #235
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Quote:
Originally Posted by Gray_Panther View Post
I still can't believe this market. My 3-door GTI MK7 has gone up since the beginning of the year. Yet unemployment is still high and the small businesses that fuel the country are suffering because of an almost year long shut down.

How has this market not collapsed with auto debt being at an all time high?!
Nothing makes sense any longer. I gave up trying to predict how things are going to go because it's just embarrassing now, but I have learned one thing since 2007.

Don't fight the Fed.
I am young, relatively speaking, but will this be a norm to expect an economic maelstrom that makes no sense every ten to fifteen years?!

I just hope I can pay off my house as fast as possible to not have to rely on the government or bankers in the future!
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      12-21-2020, 03:00 AM   #236
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I'm saying the USA broke all kinds of records for people claiming unemployment a few months ago, blew allrecords cean out the water. It makes ZERO sense that there is no knock on effect unless something is propping up the economy.

You're very smart people in here but i sense you're letting your ideology get int he way of your smarts, clearly, with that many people unemployed, there should be a huge knock on effect of lost jobs among professionals and there for a lack of demand for cinsumer goods.
Entry-level people which have lost their job where already hand-to-mouth, their situation has been financially stabilized thanks to the stimulus removing the edge of the unemployment (at least temporarily). They are not the one buying all sort of consumer goods and cars, but they were not before either. So their situation change has little effect on car demand.

On the other hand, people in mid-ladder and high-bracket jobs have a lot more 'available' disposable income because they stopped blowing money on restaurants and gym clubs. Now they blow that same money on cars and 'entertainement' goods, like bicycles and camping gear, which are sold out pretty much everywhere.
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      12-21-2020, 02:07 PM   #237
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Quote:
Originally Posted by Gray_Panther View Post
I am young, relatively speaking, but will this be a norm to expect an economic maelstrom that makes no sense every ten to fifteen years?!

I just hope I can pay off my house as fast as possible to not have to rely on the government or bankers in the future!
This is my plan. I bought 2 years ago, and it doesn't really make a lot of sense to re-finance for me. If I can pay off the last 1/4 of the mortgage sooner than later, that's a ton of money saved, that I can move onto my next life adventure with.

Better in my pocket (eventually) than the bank's.
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      12-21-2020, 02:29 PM   #238
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Quote:
Originally Posted by Meeni View Post
On the other hand, people in mid-ladder and high-bracket jobs have a lot more 'available' disposable income because they stopped blowing money on restaurants and gym clubs. Now they blow that same money on cars and 'entertainement' goods, like bicycles and camping gear, which are sold out pretty much everywhere.
+1. If you have money right now, you can't really spend it. 10's of thousands of dollars that would've been spent on vacations are just sitting in bank accounts. Plus it's easier to justify spending on assets that don't significantly depreciate (fun cars, expensive bicycles, etc). If you were gonna take a $10k vacation with your family and are now willing to spend the same money on depreciation on a car, you could buy a hell of a car (used, at least).
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      12-21-2020, 03:31 PM   #239
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Right but NONE of you are addressing what I keep saying. With this many people out of work, even if they are all entry level people, it SHOUD have an impact on demand for goods and services which in turn sees companies cut back on better paying jobs to cover the shortfall in revenues. I mean, this is exactly why we have ebbs and flows in our economy.

So somehow, that is not happening and it HAS to be the money bring poured in by governments to keep both people and businesses afloat.
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      12-21-2020, 04:05 PM   #240
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Quote:
Originally Posted by Alfisti View Post
Right but NONE of you are addressing what I keep saying. With this many people out of work, even if they are all entry level people, it SHOUD have an impact on demand for goods and services which in turn sees companies cut back on better paying jobs to cover the shortfall in revenues. I mean, this is exactly why we have ebbs and flows in our economy.

So somehow, that is not happening and it HAS to be the money bring poured in by governments to keep both people and businesses afloat.
Current unemployment rate is 6.7%, exactly the same as it was in Feb. 2014 -
https://www.thebalance.com/current-u...d-news-3305733


Name:  Unemployment.JPG
Views: 1608
Size:  72.1 KB

For a lot of the population they kept their normal pay and their expenses have dropped significantly (gas, car maintenance/repair, restaurants, bars, vacations, sporting events, movies, clothes, general shopping)
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      12-22-2020, 08:24 AM   #241
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Really? How on earth is it that low?
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      12-22-2020, 09:23 AM   #242
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Quote:
Originally Posted by Alfisti View Post
Really? How on earth is it that low?
It seems like retail and restaurants - the service industry doesn't account for a large part of the population.

Even under this so called recent lockdown, businesses and manufacturing are mostly open and have been all year under more lax regulations (speaking of Canada).

We can criticize the governments' choices all we want but it is what it is. The mods aren't looking to have people argue about politics and it's for the best.

I agree tho, there should have been a shock to the economy in general given all of this uncertainty but the truth is that nothing major really changed. Looking at the housing market for instance, it's hotter than ever.
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