NO MARKET FOR USED CARS

Vanity | 10 January 2003

[MeneMeneTekelUpharsin]

I've noticed that a lot of used vehicles are for sale everywhere. A LOT of nicer later-model vehicles are for sale and they're not moving very fast. SUVs sitting there week after week are NOT selling. Cars are NOT selling. One used car lot near here put out some used Mercedes Benz cars for around $4000 apiece and then moved them off of the lot and now has put them back on the lot (hoping someone would think they sold, I guess). What's the situation elsewhere?

[cmak9]

More people prefer to lease their cars now.

...then most people are stupid. That is a sure way to poverty.

[1Old Pro]

THANKS, IT'S GOOD FOR PRICE COMPARISONS

[1Old Pro]

would love a great used 4-Runner at a good price.

My friend's is 3-4 years old and had a rust problem on the back hatch. I've since noticed this on other used 4 runners. Be careful.

[BrooklynGOP]

Definitely possible. My friend got a '95, fully loaded, for about $12k in '98. That was a steal.

What was the mileage? Plus I think the retail for the new maxima went up since then... Anyhow, my dealer just called to tell me that he picked up a Nissan Maxima SE (2000) for $13.5k (42,000 miles). Not too bad.

[Citizen of the Savage Nation]

I'm looking into buying a new or used Toyota Sienna in the next 6-9 months. Lately, it seems that the dealers are eager to unload the new stuff at good price and terms, but the older stuff, they are asking too much. I see 3-4 year old Siennas with 50-100k miles on Toyota's website being listed for $20k and up, with a crappy warranty. A new one costs $25-30k, with full warranty.

Throw in the financing differences, and its hard to go with used. I want to go used but right now the dealers are not being realistic with their prices and so of course the inventory will not move. Why should I pay 80% of a new van with inferior warranty and financing and serious miles? I don't think so.

[AppyPappy]

My dad was a car dealer as was my grandfather. We should do a thread on how to buy a car. I'm surprised how easily people are taken these days, especially at the big-box screamer-ad dealers..

[Citizen of the Savage Nation]

It was right at 75k miles. They were asking 17k at the time. He even got a warranty which covered the transmission replacement. I've had tons of problems getting my cars TO 75k miles, aside from his transmission and an axle repair, his car is never in the shop. I'll never buy a new Chrysler again.

[hopespringseternal]

You have to look at what else you could be doing with the money. Assuming you aren't going to keep it stuffed in a mattress, the 25k vs 32k is only half the story.

[Crusher138]

Lets say I have a teenage son and I would like to get him some basic transportation that he wouldn't be embarassed to drive. Since reliability will be important, I'll look at a Honda Civic.

I go to carspot.com and look for Honda Civics newer than 1996 with less than 20,000 on them. Sorted by price the cheapest is a 2001 DX with 18,000+ miles for $12,195. The most expensive is a 2001 EX with 11,000+ miles for $16,995. Most in the middle are in the $13,500 range with between 14,000 and 18,000 miles.

My mouse then takes me to edmunds.com where I look up the price of a new Honda Civic. 2003 Honda Civics sell from $13,270 - $21,820. A DX model, fine for my son, with side airbags, is $13,520. This is with full warrantee and without someone else's problems.

Tell me again how good of a deal used cars are?

[cmak9]

Like my accountant told me, on big ticket items you buy things that appreciate (real estate for instance) and lease or rent things that depreciate (boat or car). Unfortunately there are many who buy their car on a five year note and rent an apartment to keep their monthly expenses low and never figure out why they never get ahead.

No offense intended here, but the advice is SO bad I can't let it pass. Your accountant is wrong. You buy used and pay cash, especially when it is is depreciating. Would you finance or lease a hammer, or a chainsaw (hint: not if you're smart)? A vehicle is just a tool. Leasing is fleecing. You are right about the buying the car on a 5 year note and renting a house being stupid, but just because something is less stupid, doesn't make it wise. Ask a millionaire how they became a millionaire, and they won't reply that they got rich by leasing cars.

[freeper12]

>>Tell me again how good of a deal used cars are?


Guess it depends on the state you live in, but a new car, not only costs more to buy, cost more to insure, costs more to pay sales tax, cost more on personal property tax etc.

...and BTW, no one suggested you should *overpay* for a used car. Shop around, there are deals to be had.

but by all means, if it makes you feel better, buy new. Just leaves more used cars for me to look at in a few years!

[freeper12]

>>More people prefer to lease their cars now.

>>...then most people are stupid. That is a sure way to poverty.

Couldn't agree more...only a fool would lease a car...with the exception of someone who is using it for business and writing off the cost...even then it is debatable.

[freeper12]

>>No offense intended here, but the advice is SO bad I can't let it pass

I agree, bad advice...and a bit dated at that.

[Johnny Gage]

I've owned 2 caravans (1 new, 1 used with high miles), and currently have a Stratus, and I've only had 1 problem with any of them. The coolant crossover pipe in the Stratus went bad and had to be replaced at 92,000.

I've also owned many dodge vehicles in my driving years and have always been happy. Good friends of ours just bought a T&C van with all the bells & whistles, and he's told me several times he regrets trading in his Durango for a Lexus RX300

[Citizen of the Savage Nation]

I've done it 2 times and I'd have to agree. It's a money sink. The one positive is that it gets you cars you couldn't afford to buy. I've outgrew that philosophy.

OTOH, I'm looking for a used Toyota Sienna, and the Toyota dealers are asking quite a bit for them. Where would you look for used car deals?

[cmak9]

An automobile is a depreciating asset. ie you are buying miles of transportation. The more miles the less value. Econ 101 "put as less cash as you can into a depreciating asset and put the cash into an appreciating asset" Bernard Baruch

What about the interest you are paying on the loan? In this economy, where are you going to put this money to make more money? What about the risk factor (no job, lose the vehicle, house, whatever you're in debt for). Debt is dumb, and if Econ 101 says that debt is smart, then I am glad I never went to a university. A car is a depreciating asset. That is why you should never go into debt for it. Cash rules (whereever possible). Peace of mind is another factor that is hard to quantify, but priceless. Repeat after me everybody: DEBT IS DUMB! (I know, I've BEEN dumb, just not anymore)

[freeper12]

>>Where would you look for used car deals?


Personally I would like to a private sale...dealers are trying to make a profit...most private selllers are just trying to get a little more than they can get on a trade in.

If you are not mechanically inclinded, you might want to have a mechanic look at it before you buy privately.

I agree, I leased once, and I'll admit I was foolish...you make payments about 80% of what the loan payments would be, but then when the lease is over you got nothing to show for it....and I did when I was very young and for the same reason as you...so I could get a car that I couldn't otherwise afford to drive.

[Crusher138]

Well, my father-in-law is a millionaire, and he leases his Caddy.

The guy I do computer work for who rents hanger space at the airport and is a millionaire several times over, leases his Buick. BTW, he wears clothes that look like Sears Sales Days and buys food in bulk from Costco.

Lots of people lease. If you are happy driving around an old car, if you can be without your car for a couple of days because it is in the shop, if you don't have to take clients out, if you never valet park, great, buy and keep a used car.

On the flip side, if your car is an integral part of your life, if you take clients out regularly in your car, if you must take your car to places where you have to valet park, if being without your car for a couple of days can cost you income, basically if you get a new car every 3 to 5 years anyway, leasing is probably better for you than buying, and if all things are even, let some other bozo eat the depreciation.

[taxed2death]

If you had read trade publications pertaining to new car sales / service, there were many articles floating around several years ago relating to the distinct possibility of a glut in the used car market when all these lease cars were put on the market for sale. Many people feared it would kill new car sales. Dealers were warned against flooding the market by pushing leases rather than sales. It would appear they were more interested in the "short" money and fast rollover rather than thinking long term.

On the face of it, this would appear to be the case.

When talking to car salesmen, they tell me this is much worse than the recession in the late 80's. They tell me that new car sales have never been this bad. Some of these salesmen are in their 50's and 60's, so I guess it must be pretty bad out there.

There are serious deals to be had in the used car market. You can pick up $40,000 cars with relitively low miles for $12,000 - $15,000 around these parts, all were leased, many with maintenance records.

[AppyPappy]

There are other cars besides Hondas. Hondas are not a good used car deal.