Small Used Car Market Insane? Agree? Disagree?

[bretfraz]

From a somewhat inside point of view:

* At the bottom end of the market, you get all kinds. This thread is a perfect example of that. Almost all of the buyer at this end pay cash, but many of those people are cash strapped. If you are willing to look, you can find an occasional diamond, but most are nasty lumps of coal. I don't see the logic of selling a decent $2500 car just to buy someone else's $4000 junker that needs $1000 of work ASAP.

* As financing is hard to obtain (it is getting better but nothing like a few years back), many buyers are pushed down to the $4000 price point car. In the past they'd get financed for the $7500-10,000 car, but that is pretty tough nowadays. So the $2500 clunker now costs $4000.

* There has been a lot of trading down the past 24 months, and this has driven some prices up. The supply of decent sub-$6000 cars is slim and people are hanging onto them instead of selling or trading up. It's not insanity, it is the market talking to you. Listen.

* I'd like to know what dealer is SELLING at full sticker. New car sales are still depressed. Anyone can ask any price, but selling at full sticker? The only way that works is if people are buying it.

* While the massive rebates and free money is long gone, there are plenty of deals to be had if you want new. I have all kinds of new cars for thousands off sticker. Example: 2010 Chrysler 300 Touring for almost $6000 off sticker. Sure, if you want a popular car, you are going to pay close to full sticker but that is always the case.

* Bottom Line - financing still drives most purchases. Those that can get financed (and want it), do. Those that can't, pay cash. There is your price driver, right there.

 

[jcwit]

Those that can get financed, do?

Sorry, I think not all, haven't financed a vehicle since the 1960's. This encludes new Corvetts, Camaros, New P/U's ect., ect. My three vehicles are paid for as is my house, and no its not a single or dbl. wide. All depends where you wish to put your priorities. Am I rich, not hardly, just Blessed.

 

[javacontour]

I'm just a cheap-skate.

We could have purchased oilBabe's 2010 Altima with cash, but took the low rate financing because I think I can make more in the market with that money over the next four years.

So to me, it's sticker shock.

I understand it's what the market will bear.

bretfraz added to the list of factors I had, and it does make sense.

 

[bretfraz]

Originally Posted By: jcwit
Those that can get financed, do?

Sorry, I think not all, haven't financed a vehicle since the 1960's. This encludes new Corvetts, Camaros, New P/U's ect., ect. My three vehicles are paid for as is my house, and no its not a single or dbl. wide. All depends where you wish to put your priorities. Am I rich, not hardly, just Blessed.


Ok, Mr Hair Splitter, I edited my post just for you. Feel better?

Hope you didn't miss the overall message.

 

[CROWNVIC4LIFE]

Originally Posted By: addyguy
Although I can't stand the thought of putting big money into any old car that is worth very little, the general adage that it's 'cheaper to repair than replace' is generally true.

The advantage you have is you had someone who did an overall, honest assessment of the car - so you know where you stand. It's folks who blindly repair stuff, when bigger stuff is going and they don't know it, that end up frustrated.

I think you're making the right choice.


+1

 

[AuthorEditor]

The hard part of that "honest assessment of the car" stuff is that it only works if you've got the right person to do the assessment, or it's you. That mechanic is hard to find these days. Plus, the part about old cars that can be frustrating, even for those of us who have been doing this a long time, is the sudden unforeseen failure that can cost a chunk at an inopportune moment, or might leave your wife and kids stranded late at night in the middle of nowhere. I think back to unexpected stuff that just suddenly happened to me on old cars: starter motor died completely on Christmas night in a blizzard; my wife's serpentine belt let go (predictable), but caught on the alternator and ripped it off the engine (unpredictable) destroying the radiator hose on the way; the throttle stuck wide open on my wife (bad cable); my master cylinder failed completely on Rt. 128 outside of Boston during rush hour, etc. etc. Sometimes you have to drive old cars with a sense of humor and adventure, looking at each breakdown as a character building moment. That still doesn't make new cars cheaper, but they are certainly less hassle.

 

[Cutehumor]

gas prices are around $2.60 a gallon here. in the summer, gas will move up to around 3.60ish/gallon. this isn't the time to buy a small car. probably should have bought in the winter when gas prices were low. less demand.

 

[Mr Nice]

$3 down here

Most people think their Honda or Toyota does not depreciate

 

[5sfe91]

Originally Posted By: LT4 Vette


Most people know their Honda or Toyota does not depreciate AS FAST


fixed.

 

[grampi]

Originally Posted By: Jason2007
I know I wouldn't take less than $4k for my GF's 2002 Cavalier 2.2ohv 5-speed manual with only 94k.


At 94K, it's time to recycle that Cavalier....

 

[eljefino]

Originally Posted By: Jason2007
I know I wouldn't take less than $4k for my GF's 2002 Cavalier 2.2ohv 5-speed manual with only 94k.


I don't blame you. I'm sure it's in above average condition for the market. OTOH everyone thinks they drive better than average and that their car is well maintained (by Jiffy Lubes incessant PCV replacement) and not jury-rigged.

Gresham's Law states that the used car market sorts the losers out and they're perpetually for sale. Few cars are maintained to reach any point in life much further than where the current owner thinks he's going to sell it. So pretty much any used car will be past due for a timing belt, brake fluid flush, etc. The best way to stumble upon a nicer-than-average car is through an estate sale or a benevolent friend/family member.

The clunkers drag down the value and the nice cars only sell at average price. They sell quickly because the first to see will buy. But sorting through classifieds, the overpriced ones don't even get considered. Luckily services like CL that allow lots of pictures and verbiage help offset this... over the old "PS/PW lk nw V6 mst see" 3-liner newspaper ad.

 

[AuthorEditor]

CL could offset the problems in finding a good used car, but the average listing is terrible. Most don't even give you the mileage, and you're lucky if you can tell what car it is in the out-of-focus photo. At least around here, the typical CL ad is nearly useless in learning much about the vehicle.

 

[brianl703]

I've always wondered why someone would post an ad without listing the mileage of the car.

 

[AuthorEditor]

I really think that CL should use a fill-in-the-blanks format for the basic information that every car ad should include: Year, make, model, mileage, engine, color, auto or manual, price, condtion, location, etc. Most CL car ads are missing several key pieces of information.

 

[rpn453]

Originally Posted By: AuthorEditor
I really think that CL should use a fill-in-the-blanks format for the basic information that every car ad should include: Year, make, model, mileage, engine, color, auto or manual, price, condtion, location, etc.


Kijiji is great for that, and much more popular than CL in my area.

 

[AuthorEditor]

Nowhere near as many on Kijiji around here (my guess is maybe 1% of CL max), but you're right it does have better listings.

 

[brianl703]

Originally Posted By: grampi

At 94K, it's time to recycle that Cavalier....


Do you seriously think that car is spent at 94K?

How long ago should my 1997 Crown Vic with 265,300 miles been recycled, in your estimation?

 

[MONKEYMAN]

I agree it is insane. My 1999 SL2 has cruise, remote start, gets decent gas mileage, and is easy to DYI. Insurance is cheap. Personal Property tax is cheap. There is a ton of info online on repairing a S-Series Saturn and that has saved me a ton of money. Luke over at Saturnfans has over 606,000 miles on his 95 SL2, so I know these engines can go the distance. My car has more value to me since I can do most repairs and maintenance myself. I know what I have and what things tend to need repairs. So, for me, the asking price of used cars in the market right now is only part of the value.

 

[Tahoe4Life]

Originally Posted By: grampi
At 94K, it's time to recycle that Cavalier....

Then according to you, grampi, Brian's 97 Crown Vic and all my police interceptors should have been put to death long ago. I still take mine on long trips and everything works just fine.

 

[eljefino]

Just fell into a place in life where I figure I can get out of my 97 silhouette van for about a grand and into a 120k 4 cyl 5 spd 2wd 2003-04 VUE for $2500-3000.

Except there are no cute utes near the price. I bet C4C swallowed up all the exploders and everyone wants cute utes. I'm intrigued by the inline four and standard shift, seems like what I want in a van/ large wagon. (Dodge stopped making minivans like this in 94 or so.)

MSRP on those stripped down VUEs was only $17k! I'm distressed that a defunct american brand holds its value so well.

Especially since the s-series brandmate was at 20% MSRP after six years. Private parties are demanding KBB retail...