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Originally Posted by Who8myrice
I think current used car market is controlled by young #lifestyle kids. Most of so called fixed up cars I see locally are stanced. I am not hating on them but seems like they like certain cars and price has gone up.
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I'll hate on them. The price is going up because many of them are idiots. With idiots comes a greater tendency for lack of financial resources. When these idiots decide they want a "cool car" that they can't really afford, they have to use every penny they can scrape together to afford it. Then if they go to unload it, they have an unrealistic expectation of the price because they simply can't handle taking a loss on it. They do everything they can to try and make their case, including try and hype the things up and claim that they're rare. If a sufficient number of idiots do this and a sufficient number of other idiots buy into it, you start to see that sort of trend. Just look at some of the laughable prices being asked for shitbox Honda and S-chassis cars.
Quote:
Originally Posted by Tcoat
Even those can be a gamble since they can go up and down in price in truly wild swings. You also have to consider the investment in storing and maintaining it for 30 or 40 years. Not like you can just park it in the back yard and sell it off later. We can't forget the fact that every single mile you drive it drops the value so you have capital tied up in something you are not even using all that time. You are way better off putting the money in the bank and collecting interest for the same period.
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Yeah but savings account interest is a joke. You might as well keep your money in a safe in your house at that point. I don't account for storage fees because I have a garage and there would be some sort of cool car in there either way. Maybe one day it will be a rare/valuable one that I can hang onto for a while as an investment. There has been a 30,000 mile NSX for sale locally for a few months but I'd rather pay off my house first, haha.
Quote:
Originally Posted by strat61caster
Whoever said it earlier nailed a huge detail that seems to cause this.
Sellers want to sell private party because more money in the pocket.
Buyers want to buy at a dealership because they need financing to afford it.
This is driving up the price at the dealerships, high demand, low supply
Driving down the price of private party, high supply, low demand
Ideally dealerships adjust and offer better trade in values, but I believe most know they hold the power, most sellers need to trade in for a different car, most buyers need the financing.
Microcosm effects of the car loan bubble we're sitting on.
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I have to add that I could have bought mine outright and would have, had they not offered me an extremely good loan rate. Also, I looked at a bunch of private party cars but they were all in horrible condition for the age and owned by cretins. The dealership car was in great condition and very reasonably priced, comparably to what people were asking private party or even less. That's why I bought it there.
I'm not sure I agree about buyers needing the financing though. I paid almost exactly 2/3 of what my car cost new for a 20,000 mile certified used car. That's a significant savings on a car that is pretty much still new. I'm assuming the person who sold it was paid even less than that, and that since they bought and sold the car in a couple of years, they probably bought another new car that they will subsequently lose their ass on in a few years. To me that says they afford to buy new and lose big. They have money and probably only finance if they are given an attractive enough rate. Then they tank the resale value because they simply don't care about taking a big loss when they sell it.
An opposite example is the used pickup market. I was keeping track of this because I intended to buy one via low balling combined with model year end deals before I crashed my Miata and had to scoop up the twin real quick. Decently equipped V8 4x4 Rams and Silverados were going for $35k or less. That was the asking price on the sticker for a brand new, albeit, end of model year truck. Then you turn around and idiots on craigslist are asking the same price for one a year older with some mileage built up on them. I've even heard owners of these things complain about their excellent resale value, which basically tells me that they expect them to literally not depreciate at all. This to me says, they can't afford a $40k vehicle. They went out and financed something, probably for 72 or 84 months, and they use the heck out of it. Then when they decide to replace it, they expect to get all of that money back because they haven't paid a whole lot down and they can't afford to take a loss. I'm seeing some of this happen with the twins but I think those owners are just laughed off. In the truck world, those sales are actually made, which blows my mind.