Analysis Paralysis

[aaronatstate]

[quote=""Chris GTO TT""]It's not from a manufacturer I've owned before...

And I think it's a bit of both a bubble and as Aaron said a product of new car transactions being higher than ever. People have longer terms with higher balances so it takes more money to get them out of their loans. This pushes up the cost of used cars. However I also feel there's no reason for a 100k 5 year old vehicle to hold 50% of their value.[/quote]

Cars last longer and longer these days, so values stay higher because of that. Back in the day cars were lucky to go 100k miles, now most will make 200k, with routine maintenance. Some brands are better about holding their value because of perceived better quality i.e. Toyota.

[vr4]

[quote=""aaronatstate""]There isn't a used car bubble

Cars are more expensive now, and unless you want a car with 100,000 miles, or that is 10 years old, you are going to pay at least $10,000, more if you want options. It's just how it is. It is IMPOSSIBLE to get a car that is $30,000 new, 2-3 years later, with 50,000 miles on it, for under $10,000, it just won't happen, not now, not ever.[/quote]

[ChargerX3]

[quote=""aaronatstate""]Cars last longer and longer these days, so values stay higher because of that. Back in the day cars were lucky to go 100k miles, now most will make 200k, with routine maintenance. Some brands are better about holding their value because of perceived better quality i.e. Toyota.[/quote]

This has been true since the 90's.

[DCIV]

100k and out? Come on. Your “lifetime” belts are 150k. So at 150k you have a huge expense, yet that not factored into the price of buying a lot of these cars. Plus the complexity of new vehicles and add in all the additional stuff that does break, while vehicles as a whole may last longer...they cost WAY more to fix. Thus used ones are in a bubble.


Coop

[aaronatstate]

[quote=""DCIV""]100k and out? Come on. Your “lifetime” belts are 150k. So at 150k you have a huge expense, yet that not factored into the price of buying a lot of these cars. Plus the complexity of new vehicles and add in all the additional stuff that does break, while vehicles as a whole may last longer...they cost WAY more to fix. Thus used ones are in a bubble.


Coop[/quote]

So are you saying because cars are more expensive to maintain, that used car prices are in a bubble?

Used car prices are up, because the cost of new vehicles are up.

I'll say it one more time, then I'm done. It is IMPOSSIBLE to get a car that is $30,000 new, 2-3 years later, with 50,000 miles on it, for under $10,000, it just won't happen, not now, not ever. That's expecting cars to lose 66% of their value in just 2-3 years, and sorry Coop but that's just not the case even if YOU think it should be.

[tabasco122]

[quote=""aaronatstate""]So are you saying because cars are more expensive to maintain, that used car prices are in a bubble?

Used car prices are up, because the cost of new vehicles are up.

I'll say it one more time, then I'm done. It is IMPOSSIBLE to get a car that is $30,000 new, 2-3 years later, with 50,000 miles on it, for under $10,000, it just won't happen, not now, not ever. That's expecting cars to lose 66% of their value in just 2-3 years, and sorry Coop but that's just not the case even if YOU think it should be.[/quote]

Closest ive gotten was my bmw. $48k new, purchased for 16k 4 years later with 63000 miles.

[DCIV]

[quote=""tabasco122""]Closest ive gotten was my bmw. $48k new, purchased for 16k 4 years later with 63000 miles.[/quote]

And wasn’t this when the economy was still struggling? When car prices had t gone into their bubble yet?


Coop

[Chris GTO TT]

In 2011 I paid $23k for a 3 year old 29k mile car that was originally $36k

[Duck Vader]

My Volt really depreciated. 2013 Volt I bought in 2016.

New MSRP: ~$43k

I paid $17k with 34k miles on it. CPO. Minus the extended warranty.

So figure it lost close to 60% of its value in 3 years.

See similar trends in the 2nd gen too.

[aaronatstate]

[quote=""Duck Vader""]My Volt really depreciated. 2013 Volt I bought in 2016.

New MSRP: ~$43k

I paid $17k with 34k miles on it. CPO. Minus the extended warranty.

So figure it lost close to 60% of its value in 3 years.

See similar trends in the 2nd gen too.[/quote]

I wonder how much of that was due to the tax credit you get when you buy one new? If you take that out, it's not nearly as much of a drop.

[Chris95RT]

Welcome to the result of lasting low interest rates.

Houses are the same thing, when money is cheap you'll borrow more of it and look at how many 0% loans Ford and the like were offering.

[ChargerX3]

[quote=""Chris95RT""]Welcome to the result of lasting low interest rates.

Houses are the same thing, when money is cheap you'll borrow more of it and look at how many 0% loans Ford and the like were offering.[/quote]

Lending money is not free. They pay for that 0%. Its usually in leu of bonus discounts. Less frequently do they take it from their bottom $.

[aaronatstate]

[quote=""Chris95RT""]Welcome to the result of lasting low interest rates.

Houses are the same thing, when money is cheap you'll borrow more of it and look at how many 0% loans Ford and the like were offering.[/quote]

[quote=""ChargerX3""]Lending money is not free. They pay for that 0%. Its usually in leu of bonus discounts. Less frequently do they take it from their bottom $.[/quote]

I got my Focus for 0% for 72 months, and $1,000 off (on top of X-plan pricing). It was the end of the model year though

[Chris95RT]

[quote=""ChargerX3""]Lending money is not free. They pay for that 0%. Its usually in leu of bonus discounts. Less frequently do they take it from their bottom $.[/quote]

No, no money is free.

But as you know the residual on the car is higher, since the price of the car is less discounted and after a normal refresh cycle (lets say 3-5 years) the car is going to be more.

I think that's what you're seeing, a series of 40k dollar cars where the guy only paid down 10k on it.

[ChargerX3]

[quote=""aaronatstate""]I got my Focus for 0% for 72 months, and $1,000 off (on top of X-plan pricing). It was the end of the model year though [/quote]

And i got my truck with $12k in discounts too and 0% for 36 months. I bought it for $5k less that what they originally paid Ram. In end of year situations dealers will take a loss on a hand full of vehicles if they need to make up sales to meet their year end Bonus with manufacturers. In my case the local dealer stood to get paid nearly $100k back if they met their RAM volume goal. Win for him and me.

My point is that lending money Isn't free. All of the OEM's borrow $ from banks, just like us and have to pay the going rate (4,5,6%, etc.). So most of the time when an OEM sells a new car and offers 0% they offset it with less discounts, or holding list pricing. That way the cash used over the term of the sale is a wash.

I just sold a machine to a customer this week who only cared about having 0%. I had to buy down our current rate to meet his wants. I could have gave him discounts up front, but he was more focused on 0%, so hes financing more up front. Either way it was a wash and hes happy.

[aaronatstate]

[quote=""ChargerX3""]And i got my truck with $12k in discounts too and 0% for 36 months. I bought it for $5k less that what they originally paid Ram. In end of year situations dealers will take a loss on a hand full of vehicles if they need to make up sales to meet their year end Bonus with manufacturers. In my case the local dealer stood to get paid nearly $100k back if they met their RAM volume goal. Win for him and me.

My point is that lending money Isn't free. All of the OEM's borrow $ from banks, just like us and have to pay the going rate (4,5,6%, etc.). So most of the time when an OEM sells a new car and offers 0% they offset it with less discounts, or holding list pricing. That way the cash used over the term of the sale is a wash.

I just sold a machine to a customer this week who only cared about having 0%. I had to buy down our current rate to meet his wants. I could have gave him discounts up front, but he was more focused on 0%, so hes financing more up front. Either way it was a wash and hes happy.[/quote]

Oh I totally understand, sold cars for a year

When we bought my wife's explorer sport, we were focused on 0% at first, but then the finance guy showed us we could get a $3800 discount if we financed through a different bank. Since she was putting a good chunk of money down, and plans to pay off early, it made way more sense to take the discount instead of the 0%.

[vr4]

2.9% on a 10 year old car. Can't complain

[DCIV]

What the freak did you buy already?!


Coop

[Chris GTO TT]

No money has been transferred yet so nothing

[tabasco122]

Fake news