Car prices to plummet amid oversupply

[2019CRVlx]

Car prices to plummet amid oversupply

Financial analysts are calling this a simple story of supply and demand, predicting that an oversupply of new vehicles will lead to a price war that pushes those high MSRP’s way down

www.nbcdfw.com

Yeah "plummet" is a strong word.

 

[2strokeNorthstar]

 

[billt460]

This may very well be true. If based on nothing more than the old saying, every hot market is followed by a cold one. (From a dealers perspective).

But it doesn't jibe yet from what I'm seeing in the Toyota, Ford, and Chrysler Jeep dealers here in town. Most all of the lots are barely one third full. A LOT of open parking places, that before were filled with new cars.

 

[Oillover]

Fake news

 

[GON]

Fake news

HMMMMM... some of the footage appears to be from vehicles that were manufacturer discontinued in 2020 (Ford Fusion). Could the TV station not find a dealer lot in 2023 that was overflowing with cars to support its storyline?

 

[Jetronic]

IDK, volkswagen already has an oversupply here in Europe.

 

[cptbarkey]

Didn’t watch the video, the article is trying to predict things in a Nostradamus fashion. The facts are sales are strong until they aren’t. September used to be the time to buy for a discount but that was 8+ years ago. Today’s $12k off advertising is already a lie due to huge YoY msrp markups.

 

[Zee09]

Many Japanese cars are in very short supply. No deals and limited choices still...

 

[SC Maintenance]

Wholesale prices for used cars are in fact falling. You can find it at Manheims website and it is updated monthly. There still 40% higher than pre-pandemic levels, but they are off their peak. This of course doesn't mean retail prices have neccesarily fallen yet.

I don't think it will ever get back to normal. There has now been years of too little new supply. Maybe a massive recession, when everyone is unemployed

Used Vehicle Value Index

Print Market Insights Overview Index Release DateFriday, Apr 5 Mid-Month Release DateWednesday, April 17 View Full Release Calendar Quarterly Conference Call The next quarterly Manheim Used Vehicle Value Index (MUVVI) conference call is scheduled for Friday, Apr 5 at 11am ET. Please register to...

publish.manheim.com

 

[Cujet]

I hope truck prices drop, as they are exactly 50% higher than they have traditionally been, when adjusted for inflation, via the CPI (consumer price index)

A $38K truck in 2009 should be $55-56K and have incentives/discounts, Instead, that very same model with no additional features is now $79,999 with 5% to 10% dealer mark-up.

 

[billt460]

I hope truck prices drop, as they are exactly 50% higher than they have traditionally been, when adjusted for inflation, via the CPI (consumer price index)

A $38K truck in 2009 should be $55-56K and have incentives/discounts, Instead, that very same model with no additional features is now $79,999 with 5% to 10% dealer mark-up.

That's unbelievable. What's even more unbelievable is people are actually paying that!

And if these things do plummet in price the way they're predicted to, (and it's only a matter of time before they do), imagine how many underwater car loans there will be.

 

[MParr]

It’s got to be true because, the lots are void of new cars.

 

[SC Maintenance]

I hope truck prices drop, as they are exactly 50% higher than they have traditionally been, when adjusted for inflation, via the CPI (consumer price index)

A $38K truck in 2009 should be $55-56K and have incentives/discounts, Instead, that very same model with no additional features is now $79,999 with 5% to 10% dealer mark-up.

The lots here are full of $70K new pickup trucks.

What you can't find is base model anything.

 

[MParr]

The lots here are full of $70K new pickup trucks.

What you can't find is base model anything.

Many people are not going to pay the ridiculous prices of new pickups or other vehicles for that matter.

 

[SC Maintenance]

Many people are not going to pay the ridiculous prices of new pickups or other vehicles for that matter.

I am one of those many people that won't pay, except were still awash in too much money, and there always seems to be many people that do - live for today.

You will notice at the very end the money supply has increased again in the last couple months. The Fed balance sheet continues to decline, so it must mean banks are lending more? https://fred.stlouisfed.org/series/M2SL

 

[RhondaHonda]

For reference, my Raptor I sold to givemethevin.com in April just sold this week after sitting at a dealer in Oklahoma for 4 months. The last advertised price I saw was $73,995 but it started at $79,995. I got $71,500 for it so I don’t think the dealer made much, if anything.

I miss the days of large discounts and hope we aren’t too far off from that, but we’ll see.

 

[methusaleh]

For what it’s worth, a friend of mine attended his first auction this year yesterday. He stopped going last year because prices were silly-crazy. He’s been going for 22 years, both as seller and buyer.

At least here in Vermont, prices are certainly down from last year. His examples were a seemingly-fine Chevy Cobalt with 80k or so miles going for about $500, whereas last year beater Cobalts were in the $1800-2000 range. A later model F-150 with 111k miles sold for $12k; a year ago he said that would have moved for $20k.

 

[GON]

For reference, my Raptor I sold to givemethevin.com in April just sold this week after sitting at a dealer in Oklahoma for 4 months. The last advertised price I saw was $73,995 but it started at $79,995. I got $71,500 for it so I don’t think the dealer made much, if anything.

I miss the days of large discounts and hope we aren’t too far off from that, but we’ll see.

RH,

If the selling dealer provided the finance- might have made a nice profit on the indirect loan.

 

[billt460]

The lots here are full of $70K new pickup trucks.

What you can't find is base model anything.

But that's true most anytime. Dealers like to load up vehicles with high priced packages and options, because it greatly enhances their profit margin. Bare bone base models have minimal profitability.

You have to order a contractor pickup from the Ford, Chevy, and Ram dealers here. But crew cab, long bed diesel duallys are plentiful...... Just bring 6 figures if you want one.

 

[fdcg27]

There remains worldwide excess capacity in the passenger vehicle manufacturing and assembly infrastructure. The extreme disruptions of the past few years are gradually being resolved and at some point we'll see a return to the days of more plentiful supply leading to lower pricing. Certainly every maker is working to increase output to take advantage of the current high price environment.
A wild card would be what happens with the economy. A recession would deflate retail prices almost instantly, although it doesn't look like we'll see one this year.