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?

[woodyinscc]

I'm surprised how easily people are taken these days, especially at the big-box screamer-ad dealers"

The big-box screamer ad dealers spend about 2 to 4 hundred a car on advertising (depending on volume)
I wonder who pays for it? (sarcasm)

[Uncle Sausage]

My '93 Caravan is about to reach 242K, did have to replace the transmission at around 100K. Had to replace an alternator, an intake manifold gasket, some kind of sensor, a couple of brake jobs and struts. Change oil twice a year whether it needs it or not. Drove it hard and put it away wet.

[cinFLA]

I put my eight year old Saturn SC-2 (87,000 miles) out front and sold it for $4000 cash, my asking price,

You got lucky.

[AppyPappy]

Their tactics are amazing. My aunt bought a car and called me. I asked if she liked it. "Oh I don't have it yet. I put down a deposit and they are cleaning it up". The only thing they cleaned up was HER. She went in the next day and the dealer had added $500 to the deal. She had to pay it or lose the deposit (which was $500 oddly enough). I told her "In the future, never put a deposit down on a car that you intend to drive away". I hate to think what they did to her in the F&I room. This is one of those mega motor mile dealerships. The kind that beats everyone's deal by $200 and then adds it back in at the close.

[Cacique]

bump

[The Irishman]

Do you find good prices on used pickups now?
Regards.

[Mad Dawgg]

"A vehicle is just a tool. Leasing is fleecing.

Oh How true!

A vehicle is a tool used to get you from point a to point b. It is not an investment(save for certain types like antiques and rare autos) or a status symbol and leasing is indeed fleecing!

We have a used minivan bought and paid for in cash (actually I used my discover card and paid it off in 20 days and got a cash back bonus)

I've bought one new car in my lifetime and I can never imagine doing it again.

[AppyPappy]

I bought a Accord in 1985 and paid over sricker for it. I was completely happy with the deal. But I haven't bought a new car since. I simply can't afford it.

I met a man in Raleigh who was driving a 12 year-old Caddy. My friend was his CPA and told me he was worth over a million. "Why does he drive that old wreck?" I asked. Answer: "He only spends money to make money. That's why he's a millionaire". He could buy a new Cadillac and lose money over time or buy some more rental property and make money over time.

[freeper12]

>>Do you find good prices on used pickups now?

I am not in the business, so I don't really know.

I bought my pickup used a few years ago with 8000 miles on it (F250 superduty 4wd), for about $5000 less than new...still under warranty. Someone took a bath on that one.

[AppyPappy]

The only good prices I have seen are on small 2WD pickups. Even very old pickups fetch some good money.

[woodyinscc]

The only answer (being that I agree that debt is dumb and peace of mind is priceless)is to start out with cheap transportation, use discreationary money to invest in appreciating assets and buy the depreciating assets with the profits.

[RichardW]

Well, I've been looking myself. I would say it is a good time to buy but a bad time to sell. Looking at some of these discounts that are being offered, the dealers and manufacturers must really be taking a beating.

What I found worked extremely well for me was to use the manufacturer web site and query via e-mail those dealers within a certain radius of where you live. Don't give your home number but your fax # and e-mail address. Watch the invoices come tumbling in and buy the best price. No haggling needed either.

Still the best way to sell is privately if you can find a buyer but don't expect top dollar in this environment. I'd like to sell my Ranger 4x4 with low mileage and then do a straight cash deal with the dealer. Otherwise they will only offer what amounts to a give-away price to you.

Checking ebay regularlyit appears many dealers must be getting desperate and must move the merchandise to meet their overhead costs.

[MeneMeneTekelUpharsin]

I own a car lot and currently have a quarter million dollar inventory NOT MOVING. Lot is loaded with SUV's and extended cab trucks and all listed $1m to 2.5m below NADA book value and still can't move them.

I believe you.

[Crusher138]

Think of it this way, if you have $20,000 lying around are you going to sink it into a depreciating asset or an appreciating asset?

Let's be realistic. Most decent used vehicles are going to cost at least $15,000. To save $15,000, at say $500 a month, is going to take about 30 months. You have to drive something during those 30 months. What are you going to do, walk to work for two and a half a years. "Hey, Joe Client, get on the bus with me?". Getting groceries home from the store would be fun. I guess I could walk my kids the two miles to school. Yeah that would work. So what do you do, finance a car AND save at the same time? So instead of 2 1/2 years to save it takes 5 years. And they have to hope nothing else comes along to eat those savings, like a baby, home repair, etc.

So unless someone comes into a windfall of cash, like an inheritance, lotto winning, of some other such, most folks are gonna find it awful hard to come up with the cost of a vehicle out of their pocket. At 40 I am just begining to be able to put together enough that I could buy a car for cash. What should I have done for the previous 20 or so years Mr. Pay Cash? Easy to say when you have some.

So it comes down to finance to buy or lease. Financing a new car is dumb because you get hit with depreciation and interest. So you choice is finance a used car or lease a new one. Then it is a matter of how important it is that you have a new car. If you only drive to and from work and on errands, get cheap basic transportation. If your car is more than that, you have to look at leasing.

[Mad Dawgg]

"Debt is dumb, and if Econ 101 says that debt is smart, then I am glad I never went to a university."

I agree up to a point. Debt on assets are not dumb if they truly are an asset!

This is where people get confused!

Debt on a rental property is good! If the choice is not to have the rental property or buy the rental property on credit. then it is better to have the debt becuase you are buying something that will bring in more money!

A car to drive to and from your 9-5 job, when you are working in a cubicle, is just a means of transportation. However, if you look in the parking lot of a any large office building you will see very expensive cars for middle income wage slaves. Dumb, unless your job or livelyhood depends on your car looking new and expensive it is just a huge waste of cash.

[The Irishman]

Thanks for the reply.
Regards.

[Republic of Texas]

I talked to a Dealer recently. Because of low interest rates, they sold a LOT of new cars last year. Now they have all the trade-ins from those sales, but the market for new(er) cars has been saturated. Everyone who can, and wants to buy a new car, has. It is a great time to buy a used car. Prices have dropped. Conversely, so has the amount they'll give you for your trade-in. Similar situation in some parts of the housing market.
Dave the Realtor

[EggsAckley]

Just before her death, my mother gave me her LexusRX300, the SUV. Yeah, it WAS beautiful, and loaded, but it only took driving it from Modesto to Santa Cruz (140 miles) to make the decision to sell it. Just wasn't practical.

[Mad Dawgg]

"I met a man in Raleigh who was driving a 12 year-old Caddy. My friend was his CPA and told me he was worth over a million. "Why does he drive that old wreck?" I asked. Answer: "He only spends money to make money. That's why he's a millionaire"."

Have you ever read "The Millionaire Next Door"? Your example is almost verbatim what the book describes as America's average millionaire.

[wardaddy]

I've tried to move my 99 MB M320 for 9 months. Cherry car. We had another child and got the Suburban...lol.

Now, I'm just going to keep the Benz and put my 8 year old Land Rover in the garage mostly and save it for ice/snow and deer camp.

One could blame:

A plethora of car leases.

Non-inflationary new car market.

Sluggish economy.

Surge in auto auctions that anyone who knows anyone with a dealer's card can enter.

It's the worst I've ever seen in the used car market. I'm upside down on the Benz(if I dumped it at auction) and I put down 25%....sux...ironically...I bought it in 2000 at....auction...lol