Side Effect of the Crisis: Used Car Prices

[neil]

As we know about 5 million fewer new cars hit the streets in North America this year than in the past few years.  I mused back in March that we would see some interesting side effects trickle down through the industry.

Millions of the "fleet" buyback vehicles just aren't hitting the market like they used to.  The rental fleets scaled back big time on new purchases, and moved to less traditional inventory (imports).

Checking the CBB, comparing March data to August shows some interesting results for the traditional big fleet items.  Clean Book

The BK pair:

2008 Dodge Charger SXT-  March  $14900    August $17750   $2850 appreciation
2008 Chev Malibu LS  $13650     $17000    $3350
2008 Chrysler Sebring Touring  $12400  $13350      $950
2008 pontiac G6 SE   $11950       $13400  $1450
2008 Chrysler 300 touring  $14000     $18500       $4500

Ford

2008 Fusion SE   $13250         $15250        $2000
2008 Focus SE    $10500         $11550        $1050

Japanese

2008 Honda Accord  LX   $19500     $21850  $2350
2008 Toyota Camry LE   $17250      $$18600  $1350
2008 Nissan Altima S  $17100    $21000     $3900

Korean

2008 Kia Magentis   $15500     $15000        ($500)
2008 Hyundai Sonata   $13250   $14100      $850

Trucks

2008 Dodge Ram 1500 SLT qc4x4   $19900    $24650     $4750
2008 Chev Silverado 1500 LT ec4x4   $23950    $25850   $1900
2008 Ford F-150 XLT SC 4x4   $22050      $24200    $2150
2008 Toyota Tundra SR5 DC4x4   $24350    $22600  ($1750)

Almost universal increase in pricing, except for Kia (spectra lost $50 as well)

Chrysler got hit the worst with the plants closing, and we see massive upswings in used wholesale values on staples like the old style Ram and 300.  Wholesale on the old RAM is only $5000 less than advertised retail pricing on the '09.

Conclusion?  The best time to buy both new and used cars was probably back in April or May.  I suspect with slow sales continuing over the next 6-8 months, we will see a carry forward of real low supply for re-sale markets.  The best time to sell a used car you own will probably be spring of 2010.

[articsteve]

 

Rental prices are moving up as well.

[mmorriso]

The best time to sell a used car you own will probably be spring of 2010.

Interesting.  I have noticed that since I bought my 2004 Toyota Sienna XLE in January 2009 that asking prices have remained the same.  Good thing if I decide to downsize.

[johngenx]

With Toyota and Honda dealers already asking the same price for a 2007 or 2008 Corolla/Civic as a new 2010 model, I wonder if perhaps used units will actually be priced HIGHER than new?  Oh, wait, the Subaru dealer already went there, asking more for a 2007 Impreza than a 2010!

[sailor723]

Rental prices are moving up as well.

I've noticed that as well. I'm paying much more for a rental in Scottsdale next month vs a year ago.

[Arctic_White]

With Toyota and Honda dealers already asking the same price for a 2007 or 2008 Corolla/Civic as a new 2010 model, I wonder if perhaps used units will actually be priced HIGHER than new?  Oh, wait, the Subaru dealer already went there, asking more for a 2007 Impreza than a 2010!

Unbelievable!

Though i'm sure the dealer is more willing to negotiate on the used car, than he would be on the 2010 MY.

[Cord]

With Toyota and Honda dealers already asking the same price for a 2007 or 2008 Corolla/Civic as a new 2010 model, I wonder if perhaps used units will actually be priced HIGHER than new?  Oh, wait, the Subaru dealer already went there, asking more for a 2007 Impreza than a 2010!

Unbelievable!

Though i'm sure the dealer is more willing to negotiate on the used car, than he would be on the 2010 MY.

The unfortunate thing that happens is that a "straight-up" dealer quotes a trade-in value of $5000 while the overpriced dealer quotes a trade-in value of $10,000. 7 out of 10 times, the overpriced dealer will get the deal because the customer thinks the straight-up dealer was trying to rip them off on their trade. Or with no trade, the same customer will believe the straight dealer "won't deal" and will buy from the overpriced guy because he is able to "bargain them down" by $4000. I know it makes no sense to sensible people but that's the way it is.

[johngenx]

Yup.  A realistic price for a 2007 base model Impreza is maybe $14-15K with low km's and excellent condition.  The dealer prices it at $24,995 or $26,995 or whatever.  People come in, they "deal" down with a "massive" price drop of $4K, or down to $21K.  Then they give the customer $2K more on their trade than it's worth, and presto, they sell a $15K car for $19K and the punter feels like he got a WHALE of a deal.

[Hank Horsey]

Explains a few things. A friend just sold his 08 STI for a great price but is having trouble finding a used replacement that's anywhere even close to Black Book (or Gold Book) value. Sellers aren't budging, and by the looks of it they shouldn't have to.