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Used Car Prices Keep Getting More Shocking

The Fed

Old Guys Rule
Worse than ever.

'What used to be a $5K car is now $8K. What used to be $8K is now $11K or $12K'

A couple of months ago, a woman paid a visit to Jeff Schrier's used car lot in Omaha, Nebraska. She was on a tight budget, she said, and was desperate for a vehicle to commute to work. She was shown three cars priced at her limit, roughly $7,500. Schrier said the woman was stunned. "'That's what I get for $7,500? ‘" he recalled her saying. The vehicles had far more age or mileage on them than she had expected for something to replace a car that had been totaled in a crash. The woman eventually settled on a 2013 Toyota Scion with a whopping 160,000 miles on it. Schrier isn’t sure he made any profit on the deal. "We just helped her out," he said. As prices for used vehicles blow past any seemingly rational level, it is the kind of scenario playing out at many auto dealerships across the country.

Prices have soared so high, so fast, that buyers are being increasingly priced out of the market. Consider that the average price of a used vehicle in the United States in November, according to Edmunds.com, was $29,011—a dizzying 39% more than just 12 months earlier. And for the first time that anyone can recall, more than half of America's households have less income than is considered necessary to buy the average-priced used vehicle. The days when just about anyone with a steady income could wander onto an auto lot and snag a reliable late-model car or buy their kid's first vehicle for a few thousand dollars have essentially vanished. “I’ve never seen anything remotely close to this—it’s craziness,” said Schrier, who has been selling autos for 35 years. “It’s quite frustrating for so many people right now.”

When the government reported that consumer inflation rocketed 6.8% in the 12 months that ended in November—the sharpest jump in nearly 40 years—the biggest factor, apart from energy, was used vehicles. And while the rate of increase is slowing, most experts say the inflated vehicle prices aren't likely to ease for the foreseeable future. The blame can be traced directly to the pandemic's eruption in March of last year. Auto plants suspended production to try to slow the virus’ spread. As sales of new vehicles sank, fewer people traded in used cars and trucks. At the same time, demand for laptops and monitors from people stuck at home led semiconductor makers to shift production from autos, which depend on such chips, to consumer electronics. And from there, the dominoes continued to fall.
 

Gray_Panther

Go Kart Champion
Last year I considered my 55k mile 2016 GTI to be maybe worth 15k on private sale. Carvana offers me 18.5-19k with 62k miles at the end of 2021.
The people without sufficient means to purchase any type of car are the ones truly hurting. It costs more to be poor than well off. The poor are forced into purchasing much lower quality of products that need to continuously siphon money into whether it be cars, boots, homes, etc.
 

uberdot

Autocross Champion
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Gray_Panther

Go Kart Champion
Imagine thinking Biden caused car and microchip production issues, before he was even President, and in other countries.
Doesn’t change the fact that during the whole pandemic, there was an extreme shift in wealth.
those who didnt need money or government assistance continued investing and saw their investments grow.
Those who needed the money or their jobs spent every dollar they had to maintain their belongings and put food on the table.

There is still a microchip shortage that has been going on for well over a year, but plenty of available office and building space….what happened to investing and opening up microchip manufacturing facilities so we don’t have to rely outside help?
 

mrmattolsen

Autocross Champion
Doesn’t change the fact that during the whole pandemic, there was an extreme shift in wealth.
those who didnt need money or government assistance continued investing and saw their investments grow.
Those who needed the money or their jobs spent every dollar they had to maintain their belongings and put food on the table.
100% agreed. I don't know what that has to do with Biden and used car prices though, which is what I was replying to.
There is still a microchip shortage that has been going on for well over a year, but plenty of available office and building space….what happened to investing and opening up microchip manufacturing facilities so we don’t have to rely outside help?
Do you know how long it takes to open and start running new facilities? Unfortunately you can't just do that in a few months. Several new factories in the US have been announced, but they won't be operating until like 2024.
 

ElectricEye

Autocross Newbie
Imagine thinking Biden caused car and microchip production issues, before he was even President, and in other countries.
While I don't like the way the game is played, if the previous President were President now - he would be absolutely hammered without mercy for all of this now.
Supply chain issues, Omicron... It would all be "his" fault.
 

Gray_Panther

Go Kart Champion
100% agreed. I don't know what that has to do with Biden and used car prices though, which is what I was replying to.

Do you know how long it takes to open and start running new facilities? Unfortunately you can't just do that in a few months. Several new factories in the US have been announced, but they won't be operating until like 2024.
Yeah I agree as well, I am just adding on to what you posted.

That’s a whole two years away. It just seems that many of the new factories do not need to be new at all and that they can refurbish an existing building which will cut down on time. But right now times are very good for these big companies who are enjoying record profits by exploiting the supply shortage and hiking up prices to maximize profits. Why should big companies who are making historical fortunes stop the ride?!
 

GTIfan99

Autocross Champion
Worse than ever.

'What used to be a $5K car is now $8K. What used to be $8K is now $11K or $12K'

A couple of months ago, a woman paid a visit to Jeff Schrier's used car lot in Omaha, Nebraska. She was on a tight budget, she said, and was desperate for a vehicle to commute to work. She was shown three cars priced at her limit, roughly $7,500. Schrier said the woman was stunned. "'That's what I get for $7,500? ‘" he recalled her saying. The vehicles had far more age or mileage on them than she had expected for something to replace a car that had been totaled in a crash. The woman eventually settled on a 2013 Toyota Scion with a whopping 160,000 miles on it. Schrier isn’t sure he made any profit on the deal. "We just helped her out," he said. As prices for used vehicles blow past any seemingly rational level, it is the kind of scenario playing out at many auto dealerships across the country.

Prices have soared so high, so fast, that buyers are being increasingly priced out of the market. Consider that the average price of a used vehicle in the United States in November, according to Edmunds.com, was $29,011—a dizzying 39% more than just 12 months earlier. And for the first time that anyone can recall, more than half of America's households have less income than is considered necessary to buy the average-priced used vehicle. The days when just about anyone with a steady income could wander onto an auto lot and snag a reliable late-model car or buy their kid's first vehicle for a few thousand dollars have essentially vanished. “I’ve never seen anything remotely close to this—it’s craziness,” said Schrier, who has been selling autos for 35 years. “It’s quite frustrating for so many people right now.”

When the government reported that consumer inflation rocketed 6.8% in the 12 months that ended in November—the sharpest jump in nearly 40 years—the biggest factor, apart from energy, was used vehicles. And while the rate of increase is slowing, most experts say the inflated vehicle prices aren't likely to ease for the foreseeable future. The blame can be traced directly to the pandemic's eruption in March of last year. Auto plants suspended production to try to slow the virus’ spread. As sales of new vehicles sank, fewer people traded in used cars and trucks. At the same time, demand for laptops and monitors from people stuck at home led semiconductor makers to shift production from autos, which depend on such chips, to consumer electronics. And from there, the dominoes continued to fall.

These are all market forces acting on the market. Everyone loves free market capitalism until they can't get chips, employees, etc...
 

shovelhd

Autocross Champion
These are all market forces acting on the market. Everyone loves free market capitalism until they can't get chips, employees, etc...

It's true that the current car market issues are rooted in free market capitalism and the laws of supply and demand. But if anyone believes that this is a demand problem and not a supply problem, they need to stop wearing their mask 24/7.

I worked for three different chip fab plants in the 80's and 90's. There were several right here in Massachusetts. We pioneered and optimized this technology right here. They've all been gone for decades. It wasn't the cost of labor that caused this, it was the corporate tax rate in the US. When a company invests in a country that has a 40%-50% tax rate, and Ireland or Malaysia offers you 20%, you move your fab there.
 

kyLman

Ready to race!
I work in supply chain, the inflation hits immediately to the manufacturing.
There are a ton of factors at play in this. Our current administration is not doing favors in regards to this. We are in emergency mode as a country, but it seems like one side would like to "re-invest" your tax dollars into new infrastructure, meanwhile many American factories are hardly keeping doors open...if they can find the employees.

It's stupid to blame this entirely on Trump. It's also dumb to blame this on Biden. But I can blame Biden for not doing enough.
Then again, I don't expect a senile, geriatric "President" to make the best business decisions for our failing country.
 

mrmattolsen

Autocross Champion
LMAO time to unwatch this thread already, I see. Didn’t take long to devolve.
 

GTIfan99

Autocross Champion
It's true that the current car market issues are rooted in free market capitalism and the laws of supply and demand. But if anyone believes that this is a demand problem and not a supply problem, they need to stop wearing their mask 24/7.

I worked for three different chip fab plants in the 80's and 90's. There were several right here in Massachusetts. We pioneered and optimized this technology right here. They've all been gone for decades. It wasn't the cost of labor that caused this, it was the corporate tax rate in the US. When a company invests in a country that has a 40%-50% tax rate, and Ireland or Malaysia offers you 20%, you move your fab there.

So corporations should pay no taxes to use our countries educated workers, roads, ports, airports, court system, etc....?

And if we don't give them a free ride, then we forced them to leave?

Straight up Stockholm syndrome.

Pure greed led them to leave. Profit margins have doubled over the same period.

And what does wearing a mask have to do with anything?
 

riceburner

Autocross Champion
we have one safe space for political talk, keep it there.

i cant believe the price of used cars, either. I was looking for another MK6 before somehow landing a pre-pandemic price on my R. MK6 GTIs which were going for like 8-11k two years back were going for 14-17k with average 20k more miles! Literally what you could by a MK7 GTI for a year ago. Pure insanity.

It got my wife and i thinking of seeing if VW themselves would buy back her Tiguan for what we got it for a year ago, or if we can sell it for more than what we got it for a year ago.
 
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