Any car dealers/sales thoughts on 'The Great Correction'

jinjuku

jinjuku

Moderator
Been looking at Manheim / KBB data. Next 2-3 quarters should be interesting if you are a cash buyer.
 
lovinthehd

lovinthehd

Audioholic Jedi
The Great Correction? Mind giving us a short cut education on this deduction from the data you're reviewing for us non-car dealers/salespeople ?
 
K

Kleinst

Senior Audioholic
Yeah? Are prices this high to stay or is it likely to return back to earth? I'm hoping it goes back down because I will need to replace my 2003 Yukon XL :) I still love it. My family thinks it's rediculous.

Isn't funny though I think nothing about buying new speakers that are probably 1/3-1/2 of that that is worth now.
 
jinjuku

jinjuku

Moderator
Taking Carmax as an example: They are having a $75,000,000 write down on inventory. Car loans are starting to hit 9%-11% interest rates.

Delinquencies are ramping up (90+ days).

Looking at Manheim they conclude "Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) declined 2.0% from September in the first 15 days of October. The Manheim Used Vehicle Value Index fell to 200.5, which was down 10.3% from October 2021. The non-adjusted price change in the first half of October was a decline of 1.8% compared to September, moving the unadjusted average price down 9.0% year over year. "

It's also why my title is asking for input from any members here in the industry and what they are seeing.
 
BoredSysAdmin

BoredSysAdmin

Audioholic Overlord
I regularly check the 3rd party car leasing company - "Auto Ninjas", mainly on the Honda brand. I don't yet see massive discounts. If you're interested in Ram 1500, they have 14% discounts as the best deal right now.
You could track these and more here:
 
M

Mr._Clark

Audioholic Field Marshall
Taking Carmax as an example: They are having a $75,000,000 write down on inventory. Car loans are starting to hit 9%-11% interest rates.

Delinquencies are ramping up (90+ days).

Looking at Manheim they conclude "Wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) declined 2.0% from September in the first 15 days of October. The Manheim Used Vehicle Value Index fell to 200.5, which was down 10.3% from October 2021. The non-adjusted price change in the first half of October was a decline of 1.8% compared to September, moving the unadjusted average price down 9.0% year over year. "

It's also why my title is asking for input from any members here in the industry and what they are seeing.
I realize this isn’t an answer to your question but I bought a new GMC pickup last summer in part because used vehicles were so crazy expensive. I paid sticker but got 0% financing. I normally pay cash but 0% right now seems pretty good.
On the other hand, the way the market has been I would have been better off putting money into the truck instead of the negative returns on investments
 
j_garcia

j_garcia

Audioholic Jedi
What I saw was Carvana laying people off. Carmax has massive inventory because nobody is buying. The recession is deepening slowly and it sure doesn't show signs of letting up. With an additional rate increase, I can't see why anyone would buy a new car right now, but we haven't hit the "we'll cut off an arm and a leg to get you to buy a car" point yet. That will probably come early next year.
 
Mikado463

Mikado463

Audioholic Ninja
combine interest rates, supply chain issues, EV future and overall economy and we certainly have a topsy turvy auto industry right now
 
j_garcia

j_garcia

Audioholic Jedi
Carvana was always a stupid idea in my book. I guess I don't understand who would buy a car without actually seeing it in person first, but apparently there are people like that.
 
M

Mr._Clark

Audioholic Field Marshall
Assuming this report in thehill.com is correct, it's not clear to me why dealers apparently have more leverage right now to charge more for used vehicles even though the wholesale price of used cars is dropping.

>>>The wholesale price of used cars is falling off a cliff while the retail prices that car shoppers are paying is way up, suggesting dealers are making a killing while consumers are taking a bath. . . . The fact that dealers are paying less for cars than they were a year ago while shoppers are paying more suggests that dealers are holding onto the difference and are driving inflation in the used car market, economists say. <<<

 
j_garcia

j_garcia

Audioholic Jedi
They are just trying to make up for the lack of sales. Aren't they making a killing on overcharging everyone for new cars already? Dealers have a little more leverage because eventually someone will be dumb enough to buy it they figure, and the same goes for new cars I guess.
 
highfigh

highfigh

Audioholic Slumlord
Carvana was always a stupid idea in my book. I guess I don't understand who would buy a car without actually seeing it in person first, but apparently there are people like that.
Are you familiar with the line from Otter in 'Animal House', after they brought Flounder's brother's Lincoln back, trashed? Something like "You can't go through life blaming other people for your mistakes. You f&cked up- you trusted us!".

Mail order cars? Uh, no.
 

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