Car Market going forward (1 Viewer)

[pollardsvision]

Obviously, the last couple of years have been fascinating. The aftermath of 2021/22 seems like it's going to be even more wild.

How big of a hit are auto lenders about to take?
Car payment delinquencies are the highest they've been since 2009. Yet, repo's haven't skyrocketed yet. The most likely reason is that these car loans were so unbelievably bad and people are so far upside down, the lender doesn't want it back. Dumb bank loaned an idiot $60,000 for a car now worth $40,000. A repo ain't solving that problem. Best to hope beyond hope the idiot keeps paying. Repo'ing just locks in the loss.

There's a tidal wave of massively upside auto loans coming, and it seems like the lenders are going to eat alot of this one way or another. The old saying goes, if somebody owes $1000, they've got a problem. If they owe, $50,000, the bank has a problem.

Gonna hurt dealers too. Many of the customers that got screwed in 2021/22 are going to be so disasterously underwater that they literally can't purchase another vehicle for a very long time (without destroying their credit or filing bankruptcy, at least).

The dealership model is already a little problematic. It'll be fascinating to see how they behave after the screw job of the last couple years. Or maybe all of this and the aftermath could actually garner enough support for some actual change.

BTW, the average car price in 2022 almost hit $50K. The average price of a Ford pickup truck.......$66,000.

How will the madness of the last couple of years untangle?

 

[The Z Machine]

Another piece is how EVs fit into the dealership model with the service department as a major profit center. If EVs require less maintenance and the type of maintenance is different, can dealers adapt and still meet customer demands?

 

[Ministry of Pain]

I was hoping we were going to discuss some new automobiles in the Under $40K category
How about used cars 3 yrs coming off the leases? That's how I bought my last car, almost 6 years ago
We haven't had a car payment in several years, it's been delightful.
My Volvo has 110.000+ miles on it, '14 S60, still runs OK but I've beat the hell out of that car, wouldn't mind another.
$17,500 w/30,000 miles when I bought it, doubt I could get anything close to that these days.

Yeah, I'd live a Ford Truck at a certain point, so practical but the expense to acquire one of them is ridiculous.

 

[massraider]

How will the madness of the last couple of years untangle?

https://twitter.com/GuyDealership

I have no idea if this guy's takes are any good, but he seems reasonable, and uses data. His entire timeline is pretty much which way the winds are blowing in car sales.

 

[CletiusMaximus]

Super interesting market right now. This guy is a pretty good follow. https://twitter.com/guydealership?s=21&t=qQdEwmJz3tCbDTNxjQ59ow

 

[IvanKaramazov]

Great post, and I'm with you in the sense of being very curious as to how the auto industry adjusts to all of this.

The dealership model is already a little problematic. It'll be fascinating to see how they behave after the screw job of the last couple years. Or maybe all of this and the aftermath could actually garner enough support for some actual change.

For some reason, auto dealers are apparently one of the most powerful interest groups at both the national and (especially) state level. This is a ridiculous business model that deserves to burn, but I strongly doubt that it will.

 

[CletiusMaximus]

Yeah, I'd live a Ford Truck at a certain point, so practical but the expense to acquire one of them is ridiculous

Great to haul your family around but most 150s I see anymore the bed cant even fit a sheet of plywood. For $65k I think a minivan or suv is more practical for most truck owners but I get the appeal. My neighbor has a big pickup that’s perfect for him because it can pull his boat and the bed is big enough for his dog crate and gun/tackle cases but the cab is much larger than the bed.

 

[massraider]

My Volvo has 110.000+ miles on it, '14 S60, still runs OK but I've beat the hell out of that car, wouldn't mind another.

I would keep an eye on used prices trends, and probably get serious about looking when Carvana enters bankruptcy.

 

[ChiefD]

Yeah, I'd live a Ford Truck at a certain point, so practical but the expense to acquire one of them is ridiculous

Great to haul your family around but most 150s I see anymore the bed cant even fit a sheet of plywood. For $65k I think a minivan or suv is more practical for most truck owners but I get the appeal. My neighbor has a big pickup that’s perfect for him because it can pull his boat and the bed is big enough for his dog crate and gun/tackle cases but the cab is much larger than the bed.

I have a 2021 F-150 and love it. It’s a super crew so I can haul my family of 5 comfortably. My oldest son is 6’2” and has legroom to spell in the back seat.

Its a short bed but with the tailgate down I can haul full sheets of plywood, sheetrock - any 8’ goods. Longer trim and such just hangs off the back a bit but that would be the case with a full bed anyway.

There is really nothing I can’t haul and it pulls my fishing boat like it’s not even there.

Edit: and I didn’t pay anything close to 65k for it. I think I paid 43k. It’s not the fanciest one, but it’s the F150 with the STX package. Very nice truck.

 

[Dinsy Ejotuz]

The average price of a Ford pickup truck.......$66,000

This thread is a great topic, and this specific point is one I've been thinking about a lot lately.

In 2004/2005 I was renting a 1940s garden apartment in middle one of the ground zeroes for the pre-2006/7 real estate run-up. And as I looked at what people were paying for new 1BR in new buildings it just felt like the whole damn world had lost it's mind. Enough that I went looking for people trying to explain what was happening and came across Calculated Risk back when Tanta (RIP) was also writing for them.

After a few weeks of reading I was 100% convinced that the real estate market was going to collapse and take banks down. People thought I was effing nuts up until 2008. I wish I'd known how/what to short because I had the story down cold, but no way in hell was I going to put money into housing at that point.

When I found out that those pickups I'm seeing EVERYWHERE are $60-70k I had the same reaction. Like normal people just can't swing that kind of payment if/when things get tight. There's so many people overextended in the auto world, and prices have gotten so high for even used that I'm just sitting it out until the inevitable crash comes -- higher interest rates, super high prices and a cooler economy seems like it'll crush auto prices at some point. Hoping to pick up something a lot nicer than I'd be willing to pay for today when it happens.

What's the short/option play? Ford?

 

[FairWarning]

I was hoping we were going to discuss some new automobiles in the Under $40K category
How about used cars 3 yrs coming off the leases? That's how I bought my last car, almost 6 years ago
We haven't had a car payment in several years, it's been delightful.
My Volvo has 110.000+ miles on it, '14 S60, still runs OK but I've beat the hell out of that car, wouldn't mind another.
$17,500 w/30,000 miles when I bought it, doubt I could get anything close to that these days.

Yeah, I'd live a Ford Truck at a certain point, so practical but the expense to acquire one of them is ridiculous.

I’m at the opposite end - my 39-month lease is up soon on a equinox and would like to lease another.

 

[gianmarco]

I've been leasing for well over a decade now. Current lease is about to end and simply can't at this point because the numbers just don't work. Things are normalizing, but geez.

I'm actually going to be shopping for an auto loan in the next few days for the first time in over 15 years. Don't even know what to expect. Research on it starts tomorrow.

 

[DA RAIDERS]

We have no car payments. Kid is about to start driving. I’m really hoping prices come down. The loose plan is give the kid moms 2018 Toyota and get a new or barely used car for mom. @gianmarco post what you find.

 

[BeTheMatch]

We have no car payments. Kid is about to start driving. I’m really hoping prices come down. The loose plan is give the kid moms 2018 Toyota and get a new or barely used car for mom. @gianmarco post what you find.

You're about to have a "car payment" added to your insurance bill. Not fun.

 

[massraider]

I'm actually going to be shopping for an auto loan

My completely non expert experience:: credit unions have the lowest I have seen.

Wasn't there a big thread here started by some car dealer?

 

[fruity pebbles]

I've been leasing for well over a decade now. Current lease is about to end and simply can't at this point because the numbers just don't work. Things are normalizing, but geez.

I'm actually going to be shopping for an auto loan in the next few days for the first time in over 15 years. Don't even know what to expect. Research on it starts tomorrow.

Yeah leasing is dead right now. They had an ad on the radio yesterday for a Kia Rio, a roughly $20,000 car with all fees etc. The deal was $300 a month with $3500 down for 36 months. How is over $14,000 to rent a $20,000 car for 3 years anything anyone would consider.

 

[Dinsy Ejotuz]

You're about to have a "car payment" added to your insurance bill. Not fun.

Hey, what's the story on this? We just added a 17 year old to our policy, but they said that the $1000/6 month increase wasn't just that. We don't drive much and both of our cars are old, but our rates apparently got jacked anyhow.

ETA: nevermind, I misread who you were responding to here.

 

[DA RAIDERS]

We have no car payments. Kid is about to start driving. I’m really hoping prices come down. The loose plan is give the kid moms 2018 Toyota and get a new or barely used car for mom. @gianmarco post what you find.

You're about to have a "car payment" added to your insurance bill. Not fun.

It’s surprisingly not too bad.

 

[BeTheMatch]

We have no car payments. Kid is about to start driving. I’m really hoping prices come down. The loose plan is give the kid moms 2018 Toyota and get a new or barely used car for mom. @gianmarco post what you find.

You're about to have a "car payment" added to your insurance bill. Not fun.

It’s surprisingly not too bad.

Then it goes up again at 18 (at least if it's a boy). Apparently 18-year-old male drivers carry the most risk.

 

[MTskibum]

I have been flipping vehicles the last couple years and made 3000 dollars on selling my used cars and buying new after all fees.

I ended up with a 2022 tacoma and i waited too long to flip it. Every month I check how much carmax, vroom, etc will give me and It has dropped 4000 dollars in the last 5 months.


The new market is not dropping near as fast as the used market though and older vehicles are dropping faster than newer used cars.

 

[belljr]

If you can wait second half of 2023 will be the time to purchase used

 

[DA RAIDERS]

We have no car payments. Kid is about to start driving. I’m really hoping prices come down. The loose plan is give the kid moms 2018 Toyota and get a new or barely used car for mom. @gianmarco post what you find.

You're about to have a "car payment" added to your insurance bill. Not fun.

It’s surprisingly not too bad.

Then it goes up again at 18 (at least if it's a boy). Apparently 18-year-old male drivers carry the most risk.

I have a daughter.

 

[massraider]

Then it goes up again at 18 (at least if it's a boy). Apparently 18-year-old male drivers carry the most risk.

Seems right, it was a terrible error in judgement to insure me at 18

 

[HellToupee]

Just bought a new car this week. Hate the process although the dealer where I purchased was low key and upfront about everything. It would’ve been 3.9% to finance . Some places are still trying to bend you over on the new and lowball on the trade. A real spitroasting

 

[Zegras11]

I went to Carmax three months ago. Traded in a 2021 Tacoma I bought new for $30k and they gave me $32k.

 

[the rover]

Yeah, I'd live a Ford Truck at a certain point, so practical but the expense to acquire one of them is ridiculous

Great to haul your family around but most 150s I see anymore the bed cant even fit a sheet of plywood. For $65k I think a minivan or suv is more practical for most truck owners but I get the appeal. My neighbor has a big pickup that’s perfect for him because it can pull his boat and the bed is big enough for his dog crate and gun/tackle cases but the cab is much larger than the bed.

i have a shortbed (5.5') F-150 and have never had an issue

 

[culdeus]

If you can wait second half of 2023 will be the time to purchase used

For carvana meltdown or ?

 

[KGB]

I went to Carmax three months ago. Traded in a 2021 Tacoma I bought new for $30k and they gave me $32k.

is that a store or app? downloaded app, but see where I can sell

 

[Zegras11]

I went to Carmax three months ago. Traded in a 2021 Tacoma I bought new for $30k and they gave me $32k.

is that a store or app? downloaded app, but see where I can sell

Carmax is a nationwide car dealership.

I've done about 8-9 transactions with them. Always a great experience. Turned out I didn't like the car I bought after three weeks. They have a 30-day return policy and I love the new car. No hassles at all with them ever. Price on the window is the price you pay.

 

[gianmarco]

I actually have a vehicle I ordered (VW id.4) that still hasn't come. I ordered it back in August.

I'm actually getting another car instead but, since the deposit is fully refundable, if I don't decide to buy it, I still haven't cancelled the order. When it finally gets produced and arrives, if the market is similar, I'm going to consider buying it and then sell it myself. This dealer isn't charging any markup. The issue for buyers is that there is still limited inventory for certain vehicles and the wait on an order is just so long.

 

[gianmarco]

Just bought a new car this week. Hate the process although the dealer where I purchased was low key and upfront about everything. It would’ve been 3.9% to finance . Some places are still trying to bend you over on the new and lowball on the trade. A real spitroasting

I'll take 3.9% all day. My high yield savings is 4%. That's free money.

From looking at things briefly, I'll be lucky to get 5%. Anything under 5% I'll finance for sure.

 

[Jobber]

I actually have a vehicle I ordered (VW id.4) that still hasn't come. I ordered it back in August.

I'm actually getting another car instead but, since the deposit is fully refundable, if I don't decide to buy it, I still haven't cancelled the order. When it finally gets produced and arrives, if the market is similar, I'm going to consider buying it and then sell it myself. This dealer isn't charging any markup. The issue for buyers is that there is still limited inventory for certain vehicles and the wait on an order is just so long.

I have an ID4 and love it. I assume the other car you’re getting is an EV. Not paying for gas feels like stealing.

 

[massraider]

The new market is not dropping near as fast as the used market though and older vehicles are dropping faster than newer used cars

When it makes more sense to buy new (when has that ever made sense, financially??), it lowers demand for used cars. Such a weird couple of years for car prices and such.

 

[culdeus]

I actually have a vehicle I ordered (VW id.4) that still hasn't come. I ordered it back in August.

I'm actually getting another car instead but, since the deposit is fully refundable, if I don't decide to buy it, I still haven't cancelled the order. When it finally gets produced and arrives, if the market is similar, I'm going to consider buying it and then sell it myself. This dealer isn't charging any markup. The issue for buyers is that there is still limited inventory for certain vehicles and the wait on an order is just so long.

I have an ID4 and love it. I assume the other car you’re getting is an EV. Not paying for gas feels like stealing.

Which version did you get? Still looking at a id4 but there are some funny decisions they made with one pedal driving and some funky software decisions that has me rethinking it.

 

[gianmarco]

I actually have a vehicle I ordered (VW id.4) that still hasn't come. I ordered it back in August.

I'm actually getting another car instead but, since the deposit is fully refundable, if I don't decide to buy it, I still haven't cancelled the order. When it finally gets produced and arrives, if the market is similar, I'm going to consider buying it and then sell it myself. This dealer isn't charging any markup. The issue for buyers is that there is still limited inventory for certain vehicles and the wait on an order is just so long.

I have an ID4 and love it. I assume the other car you’re getting is an EV. Not paying for gas feels like stealing.

No, actually not an EV at all.

But, I was otherwise excited to get one.

 

[Judge Smails]

Used market sure has dropped if you’re trying to sell. Lots of lowball offers out there.

As for me, absolutely can’t stand car payments. Pay cash for 1-2 year old cars with low miles and drive them for 10+ years. Then do it again. Leasing just never made much financial sense for me either.

 

[New Binky the Doormat]

https://twitter.com/GuyDealership/status/1619880891526033408

saying used car prices have bottomed for the time being

 

[Sand]

Another piece is how EVs fit into the dealership model with the service department as a major profit center. If EVs require less maintenance and the type of maintenance is different, can dealers adapt and still meet customer demands?

Do we have data on that? Do EVs really require less maintenance and repairs?

Except Tesla, of course.

 

[dnurk]

Sehorn for future reading. I have a 2019 expedition I love and bought as a one year old cpo from Ford. Wife has a 2013 outback that our 16 year old son will take at some point soon and wife will be looking (most likely hybrid suv). Like some posters above we hate car payments and always buy one year old cars.

 

[Sand]

I was hoping we were going to discuss some new automobiles in the Under $40K category
How about used cars 3 yrs coming off the leases? That's how I bought my last car, almost 6 years ago

Car leases have gone way, way down. Supply issues, cost, etc. It means less used cars on the market. Not sure we'll see the big price crash that people expect. There are some countervailing trends here.

 

[Nathan R. Jessep]

Still trying to coax another 100K out of my 2010 F150. Will NOT be spending 60K on a new one.

 

[massraider]

r/UsedCars

r/UsedCars: UsedCars: Everything with Buying & Selling Used Cars.

www.reddit.com

A very good resource as well. Anything I know nothing about, and want to find obsessives who know waaay too much about said subject, I head over to Reddit.

 

[Buck Bradcanon]

July 2019 (perfect timing in retrospect..pre pandy) bought my daughter a used Ford Escape with 35k miles for $11,800!! One of my best purchases ever.

Looking into a car for my younger daughter now and will have to pay about 1.5x that for a comparable vehicle.

 

[Buckna]

My 20 year old Tacoma is getting pretty long in the tooth. Thankfully COVID and work from home has extended its lifespan considerably. May have to shoot the lock off my wallet and replace it this year.

 

[belljr]

My 20 year old Tacoma is getting pretty long in the tooth. Thankfully COVID and work from home has extended its lifespan considerably. May have to shoot the lock off my wallet and replace it this year.

my 09 traverse needs a timing chain and a catlytic converter. It only has 130K on it but the thought of shelling out 4kish has me considering a newish car. My commuter vehicle was a civic that when my daughter got her license we gave to her. But same as you the Travers is our third vehicle and I use it twice a week

 

[Buckna]

My 20 year old Tacoma is getting pretty long in the tooth. Thankfully COVID and work from home has extended its lifespan considerably. May have to shoot the lock off my wallet and replace it this year.

my 09 traverse needs a timing chain and a catlytic converter. It only has 130K on it but the thought of shelling out 4kish has me considering a newish car. My commuter vehicle was a civic that when my daughter got her license we gave to her. But same as you the Travers is our third vehicle and I use it twice a week

Yeah, two years ago replaced some of the control arms and one of the wheel hubs. It’s old enough tech I had to find a specialty shop to do the wheel hub. It’s been throwing a vacuum leak check engine code for a long while that I haven’t been able to chase down. Lots of little things that will add up are needed: new tires, the arms holding the glass on my camper top have to be replaced, need a new windshield, fuses and sensors going out every once in a while. Stuff that’s not expensive compared to getting something new or used, but at some point it becomes work to keep it going. Plus it doesn’t have anything near the creature comforts of even 10 year old vehicles. Still a in-demand vehicle though, I get people asking me if I would like to sell it all the time.

My wife’s Outback is great and getting close to 8 years old, only 116k miles but it got rear-ended a few years ago and it’s never been fully “right” since that accident. Weird stuff like the tailgate not closing sometimes, or the computer saying there’s an obstacle in the road when there’s nothing there. Not relishing the thought of going from no car payment for a while to 2, but she just got a new job making nearly twice what she was before so there’s comfortable room in the budget now.

 

[fruity pebbles]

Ha those are all new cars compared to me. 1996 Lexus Ls400. Kids go to a school with affluent parents. I feel like Uncle Buck when dropping them off and picking them up.

 

[Van Dyman]

My 20 year old Tacoma is getting pretty long in the tooth. Thankfully COVID and work from home has extended its lifespan considerably. May have to shoot the lock off my wallet and replace it this year.

Work from home has to be a long-term factor suppressing demand, right? Tons of people in your situation not needing to buy as often. Tons of people in my situation...not buying a car for my teen, just giving her the one I no longer need since I don't commute anymore.

 

[Nathan R. Jessep]

It’s been throwing a vacuum leak check engine code for a long while that I haven’t been able to chase down.

I had a friend with a Chevy Tahoe that was doing this. I did some digging trying to help and it ended up being the gas cap. Got a new one for $15 and that fixed the problem.

 

[Buckna]

It’s been throwing a vacuum leak check engine code for a long while that I haven’t been able to chase down.

I had a friend with a Chevy Tahoe that was doing this. I did some digging trying to help and it ended up being the gas cap. Got a new one for $15 and that fixed the problem.

Yeah, had tried that and no luck in this case but thank you for mentioning.

My guess is it’s a bad sensor somewhere, have done a smoke test and couldn’t find a leak anywhere.