By on December 20, 2021

If you’re in the market for a new vehicle, you’ve likely noticed that some of the models you were interested in aren’t available in your preferred format and happen to be accompanied by sizable dealer markups. Well the used market, formerly a refuge for those seeking a bargain and a shrewd way of dodging the steepest period of deprecation, isn’t doing much better.

According to Black Book, the typical transaction price for used vehicles has gone up by over $500 in less than a month. Pegged at $27,000 in November, the average secondhand car now trades for over $27,500. As we’ve recently covered just how wild secondhand vehicle prices have become in 2021, we’ll keep this one relatively brief. But it must be said that automotive values are starting to seem totally disconnected from anything that could be considered rational as cars now have MSRPs a third higher than they were at the start of 2021. 

The laws of supply and demand certainly come into play here. Pandemic restrictions kept everyone home last year, suppressing both demand and production. Rental agencies also felt the pinch, encouraging several companies to offload their inventories. But when demand returned, supply chain issues persisted and automakers failed to manufacture cars anywhere near their normal pace.

Initially, this seemed like a disaster for the entire industry. But it wasn’t long until retailers realized they could buy used cars at a premium and flip them for a tidy profit. The same was true for new vehicles, with MSRPs similarly holding strong due to elevated demand. Meanwhile, rental agencies that had previously dumped their inventories in desperation were now hoarding whatever they could find and charging lubricous rates in the process. The end result was everyone making more money per car and a consumer base that was seemingly willing to endure higher sums. But those prices have continued to swell to a point that’s starting to look less than sustainable.

Car & Driver, which first shared the Black Book data, noted that these prices are the highest on record for used vehicles and cover both franchise and independent dealers — accounting for 95 percent of all available used vehicles for sale. It also stated that other automotive entities had reached different figures while acknowledging that it made little difference in determining the general market trends.

From C&D:

Different analyst companies use different methods to count vehicles, but the trend is similar over at Kelley Blue Book. KBB’s numbers show that the current used-car inventory situation sits at 15 percent lower than it was a year ago, but the good news is that inventory is slowly starting to increase. Used car dealers in the U.S. had 2.31 million vehicles in stock at the end of November, up from 2.25 million at the end of October. Black Book found that when there are used vehicles available, they’re often newer models. The inventory of used vehicles that are up to two years old is growing faster than vehicles that are between two and eight years old.

Black Book also analyzed the prices of approximately two million vehicles listed for sale on U.S. dealer lots, specifically used vehicles that are between two and six years old. Black Book found that the price index for them has been mostly steadily climbing since the spring, with a bit of a plateau in the late summer. Since then, things have only gone in one direction.

As someone who is also looking to purchase another vehicle, it’s hard for your author to recommend anything other than waiting until the market reverts to something approaching normality. Unless you’re totally fine with paying more for a vehicle you probably didn’t want in the first place, and may well cost less in a few months, there really isn’t a benefit to buying now. Obviously, that advice doesn’t pertain to unfortunate people who absolutely must purchase a vehicle to ensure their current transportation needs are met and are being taken advantage of by the entire industry.

[Image: Gretchen Gunda Enger/Shutterstock]

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125 Comments on “Used Vehicle Prices Are Still Totally Insane...”


  • avatar
    pmirp1

    My daughter just bought a Tacoma 4×4 TRD sport in Atlanta for 45,000. They charged her 2,500 market adjustment to order. I told her no problems, I cover it. It is what it is. That is the market. At the ginormous Toyota dealer they told her used Tacomas 2021 model year are running 5000 over new sticker. So 2,500 over sticker is a deal. The only catch is she must wait 3-4 months to get it. I think they are building it for her now in Mexico.

    • 0 avatar
      1337cr3w

      I bought a new Rav4 Hybrid yesterday from a dealership an hour outside of Pittsburgh and they didn’t upcharge me. I got the vehicle for MSRP (33k) + tax. It seems like dealers in urban areas are the biggest culprits.

      I looked at used ones but prices were higher than new models.

      • 0 avatar
        pmirp1

        1337cr3w, My daughter is a smart cookie. Like her dad. She called dealers around the country for specific trim and color she wants. When it comes to Tacomas it is not like what it seems.

        She called autotrader dealers and in other towns, they told her what showed available was in fact already pre-sold. They would not even order for her. For Tacomas, they said the allocation they have, is for people that live in their zip codes.

        She ended up calling dealer near her in Atlanta area. They agreed to order for her what she wants. Market adjustment is the first they tell you. They are not hiding that.

    • 0 avatar
      swester

      @pmirp1

      Congratulations, you and your daughter are part of the problem by giving the dealer exactly what they are asking.

      • 0 avatar
        FreedMike

        What’s he supposed to do – have the kid ride a Big Wheel until prices come down? Lighten up.

        Besides, are YOU paying inflated prices for anything? If so, then you’re part of the problem too.

      • 0 avatar
        Art Vandelay

        Lol…yeah some.dude trying to buy his daughter a reliable vehicle is the problem. Do you blame rape victims too?

      • 0 avatar
        pmirp1

        Swester. we also test drove a Frontier. She did not like it. Truth be told I liked it a lot. It looked good and has good pickup. But…

        Frontier they had on the lot brand new (with a 1000 market adjustment), had no LEDs. It was $40,000 SV model rear wheel drive. She wants 4×4. The Tacoma sport TRD 4×4 she got with market adjustment and leather at dealer cost her $45,000(before tax and fees). That Nissan had no leather. Nissan steering was also really stiff for her. And no telescoping steering wheel. Add Toyota reliability and resale for Tacoma, and it is a no brainer.

        I understand, it is hard to accept price above MSRP, but it really is market dynamics. No different than if you try to buy homes now and you have to bid above asking price in many instances to win it.

    • 0 avatar
      BeauCharles

      Hopefully she doesn’t waste 3-4 months only to have the dealer gouge her more.

  • avatar
    burgersandbeer

    I’m not convinced things will be much better in a few months. I doubt prices reverse before Q4 2022, and we won’t see (inflation adjusted) “normal” pricing until 2023.

    Seems like it would take a while to both fix the supply chain and put enough new inventory on lots to reverse prices.I would love for someone to tell me I’m wrong and this will course correct quickly after parts become available.

    • 0 avatar
      Margarets Dad

      Got it, cars are expensive, thx.

      • 0 avatar
        kcflyer

        So your going to pretend the current situation with vehicle prices is normal. Got it.

        • 0 avatar
          FreedMike

          The current situation with car prices is capitalism / market economics in action.

          • 0 avatar
            28-Cars-Later

            Bad fiscal policies.

            Bad political policies.

            Loss of confidence in government and currency.

          • 0 avatar
            FreedMike

            When it comes to cars, it’s all about constricted supply of new vehicles. I don’t think that has anything with fiscal policy or anti-government sentiment.

            But I’d say it has something to do with political policies that allowed things like the supply of vital components for new vehicles – in this case, chips – to slip away overseas. Well, that was a blunder we’re paying for now. Seems to me chip manufacturing could create any number of good paying jobs, so maybe this is a good time to institute some policies that would “bring them home,” so to speak.

          • 0 avatar
            Art Vandelay

            4 years ago your party’s stance was that those jobs are gone and not coming back. So what’s changed in that equation besides you having to pay more for a vehicle…a condition the makers of said vehicles are likely just fine with.

          • 0 avatar
            FreedMike

            “Your party.”

            Yeah, here it comes – the “blame the other guy” bit. Blah blah. I’m sure Hillary Clinton ran on a “I want every factory worker out of a job” in 2016, which is why the unions backed her.

            Fact: it’s in the interest of ANY political party to try to pump up industrial employment. Why? Factory workers vote. And if Trump had done something four years ago to bring back chip manufacturing to this country, versus getting in a d*ck measuring / Twitter troll contest with Xi Jinping, maybe we wouldn’t be in this mess.

          • 0 avatar
            Art Vandelay

            No, but that was what was being said by that party. I’m just curious what has changed.

            Your best hope to be honest is to get those chips being made in Mexico. You were right…they aren’t coming back here.

            And yes, policies have effects.

            But yes, at the end of the day it is the Democrats turn to talk about bringing those jobs back and not do it…just like Trump

          • 0 avatar
            FreedMike

            @Art:

            You’re talking about what Hillary Clinton said about coal jobs, not manufacturing in general. And she was dead on because the market shifted away from coal. Nothing Trump tried to bring coal back – and he did try – made a damn bit of difference.

            A link to all the stuff Clinton proposed via job creation is below. Trump also had proposals that centered more around cutting taxes and reducing regulations. Now, whether this would have worked or not is anyone’s guess, but to say that “my party” didn’t want to do anything to create jobs is wrong, plain and simple.

            https://ballotpedia.org/Hillary_Clinton_presidential_campaign,_2016/Labor_and_employment

          • 0 avatar
            28-Cars-Later

            Much more complicated than just supply, though that is a component. The insane amount of money printing in 2020 combined with the most recent money printing a few weeks ago has triggered a wave of low double digit inflation which has impacted the entire economy. The White House is experiencing record lows of approval and confidence due to extreme ineptitude, low confidence in the government leads to low confidence in the currency at home and aboard since the two are linked post 1971. The two play into each other as they did in the 1970s, from Nixon’s resignation, to Ford, to Carter with whom the American people lost all confidence between Iran and the sweater incidents. This is similar, though the difference here is the Fed wasn’t boxed into a corner with interest rates as it is now.

            From an strictly automotive perspective, the situation is exacerbated not only because of production issues, but because of political policies. We recently saw where the incorrect Obama era EPA goals were being implemented, and in order to do so more sophisticated electronics will be required. This AWFUL decision was done deliberately as a matter of policy from the DC junta in order to further drive up costs, instead of the opposite which would be to relax such diktats for at least a year during the “chip shortage”. One cannot help but recognize the junta’s decisions have the effect of impoverishing Americans through significant inflation, runaway spending, and artificial increase of production costs. But “elections” have consequences.

          • 0 avatar
            FreedMike

            @28:

            Naw, it’s supply. As long as the supply of goods and services keeps up with money supply, inflation isn’t a problem. Supply of goods hasn’t kept up. There’s more money chasing an insufficient supply of goods. Plus, gas prices, which are a key driver of the cost of about everything we buy, have gone up. Thus, the inflation. It’s called “demand-pull inflation.”

            https://www.investopedia.com/terms/d/demandpullinflation.asp

            The value of the dollar versus other currencies has actually been steady for some time now.
            https://tradingeconomics.com/united-states/currency

            And your interpretation of what happened in the ’70s ignores that inflation was largely caused by one thing that’s still driving it today: fuel prices.

            Lack of confidence in the government is nothing new – it’s been going on for DECADES with no impact on inflation. I mean, Jesus…we had plenty of growth under Trump, who couldn’t even spell “inept” unless Twitter auto-corrected him.

          • 0 avatar
            28-Cars-Later

            I’m pretty sure you lived through the 70s, were the economic issues *just* the ’73 embargo and ’79 oil shock or was it a myriad of things?

          • 0 avatar
            FreedMike

            @28:

            Definitely a myriad of things, including Nixon taking the country off the gold standard (which I KNOW you’re in agreement with) but check this chart:

            https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi

            The two biggest spikes were in 1973-1974 and 1979-80, which corresponded exactly to the OPEC embargo and the Iranian Revolution. Both caused huge increases in fuel prices.

            At the same time, the Fed kept raising rates to keep inflation under check, but that didn’t work. Worse, it sent borrowing prices through the roof, which killed the market for housing and big-ticket consumer items like cars.

            Between all that and my acne making it pretty much impossible to score girls, it was a MISERABLE f**king time.

            My most vivid memory of the economic times was getting my license in November 1979, right in time for gas prices to basically double. My dad gave me mom’s ’75 Olds Custom Cruiser (the one with the electric clamshell tailgate) with a 455. That thing literally ate every damn cent I made flipping burgers. On the positive side, it had no emissions controls, so it was a pretty fair Q-ship against the late-’70s “muscle” out there, the vinyl seats made cleaning up bong spills a breeze, and it was an absolute MONSTER when it came to giving lawn jobs.

        • 0 avatar
          Art Vandelay

          I think it’s called a correction. On the plus side, maybe those stripped down penalty boxes this site pines for will make a.comeback.

          • 0 avatar
            MRF 95 T-Bird

            June 1979-The weekend that I was graduating high school was during one of the gas crisis’ with long lines at stations. We had lived through the 73-74 OPEC crisis’ so we knew that it became a part of American life at the time along with rationing odd and even days not unlike WWII. Almost quaint compared to the recent run on fuel by stupid people using Hefty bags early in the pandemic.
            Since I was hitting a few parties that weekend I wanted to fill up my 70 Mustang.
            So I got up early Saturday morning. Dropped by the deli for an egg sandwich, a hot coco and the NY Daily News. While waiting in line about 1/4 mile up the block sitting reading and listening to the free form rock station NEW-FM what comes on. Steely Dan-Kid Charlemagne-with the inimitable lyric “Is there gas in the car…”

    • 0 avatar
      ajla

      I’m just hoping next year improves to the point that regular purchases over MSRP aren’t necessary.

  • avatar
    Superdessucke

    Less worried about the prices and more worried about the fact that Americans have so much confidence in the Administration they just voted for, they think their money is about to be worthless.

  • avatar

    Situation with cars here starts to remind me what we had in Russia in 1990s. But instead of Mexico we had Poland and Lithuania (Rzeczpospolita LOL) to rebuild for us cars totaled in Germany.

  • avatar
    gasser

    Wait until manufacturers realize that “just in in time” manufacturing is dead. The supply chain will spit out parts in bursts and fits for months before normalizing. Now manufacturers will have to keep a INVENTORY of the millions of parts they need, because they don’t know when a 5 cent widget will hold up production. Of course, this cost of inventory, will need to be passed on to consumers. After all, if someone is willing to pay $2500 over MSRP, the MSRP is too cheap, right????

    • 0 avatar
      SCE to AUX

      “Just in time” inventory works in peacetime, but not wartime.

      We consume a modest amount of plastic in the medical device my company produces. These parts are made by others. But resin is becoming very scarce, so we actually bought several thousand pounds of certain materials just to keep the lines running. We have heavy bags of resin sitting in vacant cubes in the engineering office, waiting to be sent to molders, who won’t stockpile it for us.

      We’re actually warehousing many parts and materials this way since the usual lead times don’t apply anymore.

      • 0 avatar
        ttacgreg

        This is a potentially ugly feedback loop you’re describing. My routine items at my grocery store disappear from the shelves for weeks on end. What used to be a grocery list is becoming more a wish list. It has led me to buy more of these things when they show up on the shelf than I need, essentially hoarding them. If everybody reacts to disrupted supply chain flows this way, then that increases the demand for groceries, resin, and everything else. The net effect is less economic efficiency and increased expense.

      • 0 avatar

        JIT always had issues, It does not handle supply disruptions or market changes well at all. I hated trying to do JIT when I worked for a company that did production runs (I currently work handling low volume govt contracts so build to order). I had to convince my bosses back in the day that we had to keep the inventory much higher then we wanted or we would never meet demand fluctuations.

    • 0 avatar
      GiddyHitch

      JIT manufacturing was always BS in my experience. The warehousing and stockpiling of critical parts is still taking place upstream of the factory (and even sometimes at the factory itself in VMI hubs] so any efficiency gains are purely illusory on a holistic supply chain basis.

    • 0 avatar
      FreedMike

      It’s the dealers passing on the higher costs, not the manufacturers.

    • 0 avatar
      Yankee

      Gasser/GiddyHitch: Just in Time manufacturing works very well at Toyota in Japan, where it was developed. There is a lot more to it than just moving stockpiles around. The problem is that it was developed to meet the unique set of circumstances of Japanese auto production on an island nation where your suppliers are all working together with you and are just a stone’s throw away. Something similar could have worked in the Detroit of the 1950s, but not today. Instead, with the late adoption by the big three who didn’t understand the intricacies of the process, it ended up like Total Quality Management, Six Sigma, and other management fads put in place by the manager-of-the-month at the big three. Japanese car manufacturing leaders rise from the ranks of engineering and are laser focused on efficiency. The big three are run (and repeatedly run into the ground) by nepotism, just like their dealers.

  • avatar
    MitchConner

    Dealers will ask stupid money if they think there’s someone out there dumb enough to pay it.

    Exhibit A:

    https://www.southtownehyundai.com/all-inventory/index.htm?search=Bronco

  • avatar
    Greg Hamilton

    Coming to America:
    One of my college professors lived in the USSR for a couple of months. Early on she went to a food market half-expecting to find a line out the door, but found none. She said to herself “There is NO line: that’s just Western propaganda!” She walked up to the bakery counter to buy some bread. The man behind the counter said “The food has been sold out for hours: you need to to get on line at 6AM.”

    Maybe we are already here.

    • 0 avatar
      FreedMike

      You’ve actually shown up to the supermarket recently and found no food?

      It’s silly, fear-driven thinking like this that zapped every available roll of toilet paper off the shelves for a solid month.

      • 0 avatar
        Greg Hamilton

        Comrade FreedMike,
        In the spirit of “Trading Places” and Mortimer and Randolph Duke, that unless policies are reversed in this country and soon, we will be seeing shortages of food and other goods. So I will bet you one dollar that this will happen.

        Why do you think Bill Gates is the largest private owner of farmland in this country? Why do you think Rupert Murdoch just bought the largest cattle ranch in the country? They are not stupid.

        • 0 avatar
          FreedMike

          “Comrade”? Really?

          Please define communism for me and prove to me that I’m a communist, versus someone who is just disagreeing with you.

          No, we’re not going to show up to the supermarket and find no food anytime soon. And if that happens, it’ll be because of some kind of calamity, not communism, capitalism, or any other “ism.”

          • 0 avatar
            Greg Hamilton

            Comrade Freedmike,
            Here’s the definition:
            a companion who shares one’s activities or is a fellow member of an organization.

            As for communism, here is a quote,
            “In my study of communist societies, I came to the conclusion that the purpose of communist propaganda was not to persuade or convince, not to inform, but to humiliate; and therefore, the less it corresponded to reality the better.” Theodore Dalrymple

          • 0 avatar
            FreedMike

            “…the purpose of communist propaganda was not to persuade or convince, not to inform, but to humiliate; and therefore, the less it corresponded to reality the better.”

            By this definition, calling me a communist when I am not makes you the communist. Perhaps you should revise your definition.

            And speaking of “corresponding to reality,” no one is walking into a store these days and finding no food, and you provided no proof that this will ever happen. You just spouted political rhetoric, nothing more. Well, communists did that too…in fact, they were really, really good at it.

          • 0 avatar
            randy in rocklin

            Comrade Mike, You would fit in very well with the folks in China and Russia.

          • 0 avatar
            FreedMike

            Why? Explain, please.

      • 0 avatar
        28-Cars-Later

        Some shelves were pretty bare in April/May 2020, but the store was not bereft of goods. In a genuine emergency I could see it.

    • 0 avatar
      ToolGuy

      There is a national candy cane shortage in the U.S. right now. You can google it and choose your media source, or you can look in my driveway where my spouse’s car isn’t* because she is out doing old-school sourcing.

      The store referenced here has been in business since 1937, and this is a first for them:
      https://nypost.com/2021/12/18/candy-cane-shortage-caused-by-covid-and-supply-chain-issues/

      * Right rear Michelin has a plug in the tread as of last night – pulled from my ‘inventory’ in my vehicle trunk. (Taking odds on how long it lasts.)

      • 0 avatar
        FreedMike

        I actually bought a bunch of candy canes this weekend.

        There is also a cream cheese shortage, but the pandemic has nothing to do with it – apparently there is one big source for cream cheese in this country, and the company got hacked and had to shut down production for a spell, which screwed things up royally. Kraft will give you $20 to NOT buy cream cheese this year.

        • 0 avatar
          MRF 95 T-Bird

          I was in a Queens bagel shop the other day and the woman behind the counter said that the cream cheese supply was fairly normal but she was apparently aware of some shortages.

          • 0 avatar
            el scotto

            -harrumphing and going into complete young codger mode- For Greg Hamilton, please go to a VFW or American Legion and address their members as “Comrade”, or better yet, “Dear Comrade”. I’m sure your definition of comrade will make them all feel much better.

            Grabbing two soapboxes- one for each foot. There was no toilet paper shortage; it was dimwits buying three and four years worth of toilet paper at once. Yeah, that’ll help them fight that bad old Covid.

            Furthermore this is for all you jack-napes, poltroons, and village idiots: There never ever was a shortage of basic foot at the supermarket. There where artificial shortage caused by the media reporting there was a shortage of “free range, gluten-free, low carb carrots”. Which caused all three of the types I mentioned to go out and buy at least, at the minimum 60 or 70 pounds of “free range, gluten-free, low carb carrots”. After about 30 of these Darwin-award winners filled their grocery carts with 60 to 70 pound of “free range, gluten-free, low carb carrots”; yes, there was shortage. I suspect their offspring have beady eyes, that’s a clue.

            Yes, there were some real shortages but some really odd stuff; like yeast. Other than listening to my senior citizen mom complain she couldn’t get yeast, how often do you buy yeast? My mom: “I can’t find yeast anywhere”, el Scotto, “mom why do you need yeasts?” mom, “to make a batch of dough to put in the bread machine”, me “mom they have all sorts of mixes for the bread machine”, mom, “it’s not the same and mine tastes better”. It doesn’t but never, ever tell her that.

            I used to be even lazier and buy already cut jello squares in a bag at my local Lion of the Food. They stopped carrying them during the height of the pandemic. Oh The Horror! of having to slice jello!!

            You could always buy the basics at your grocery store. This is America; no one went malnourished. What happened is a bunch of spoiled, whiny-butt, self-entitled people thought it was great to get online and complain that they could only buy Strawberry Coconut-flaked Sprinkly Os when they had been out of chocolate ones for three whole weeks!

            Try explaining this “food shortage” or “food crisis” to anyone who hasn’t seen a fresh vegetable for for eight weeks because the supply ship was out or lived in a charming place where they heloed in bullets, water, MREs, and smokes. “Whiny Little Bitches” would probably be their reply.

            Oh let us not forget the mad out-rush of companies going overseas during “Republican Jesus”, aka Ronald Reagan two terms. I don’t blame the politicians, they’re gonna politic. I blame the MBAs telling their corporate boards, “lookee we can pay people 12 cents an hour, overtime has never been heard in that country, and flush toilets are considered company benefits.” Like a herd of lemmings, once one left, the other followed in droves. Never mind that Bubba and Sissy ended up with worse, lower paying jobs so they couldn’t afford buy things that cost 12 cents an hour to make.

            Which gets me to JIT inventory. It works extremely well when the parts supplier is just across the street. Except in America, most of the JIT suppliers are not just across the street. They’re usually miles and miles away. You know what doesn’t work well in heavy snow or heavy rains? Semis that haul the JIT inventory. Oh, I know; after getting JIT inventory started, these same brain-surgeons came up with outdoor malls for places with sub-zero temps in the winter and places with 90 degree days with 90% humidity in the summer.

            One more and then I’ll settle down. In 07, or Aught-Seven in young codger years; guys wearing 200 dollar ties to work almost, and I mean damn near almost collapsed the world banking system. All of you guys watching fox news and shaking your fists at clouds would’ve have really had an apocalypse/complete social melt-down on your hands. Since then we have came to new levels of civil and political discourse were making snide remarks about the other side is supposed to be a show of your rapier-like wit and above average intellect. Well guess what? The guys in Ferragamo and Hermes ties are right back at it. Keep fighting your “good fight”, clueless wonders.

            Time to burn a couple weeks of vacation. Merry Christmas, Happy Holidays, and a Happy New Year to everyone who reads TTAC and their assorted kith and kin.

          • 0 avatar
            JD-Shifty

            half of the food in the US gets wasted. so stop it.

  • avatar
    Ol Shel

    Even old project cars have gone way up. Why? Greed. Certainly not due to supply chains, need, or demand.

    • 0 avatar
      6250Claimer

      Do you think maybe inflation might have something to do with it? Our currency has been devalued and it continues to devalue daily.

      • 0 avatar
        Art Vandelay

        It’s never the fault of people like ol’shel and the leaders they support. Always some greedy folks gumming up the works.

        • 0 avatar
          FreedMike

          @Art:
          We put the Jerry Lundergaards of the world in charge of used car pricing. Did we expect them to stop selling the Tru-Kote?

          Of course it’s greed. With car dealers – CAR DEALERS – what else could it be?

          • 0 avatar
            Art Vandelay

            Used car dealers are selling old project cars?

          • 0 avatar
            FreedMike

            @Art:

            I’d say the old project car market is a tiny fraction of the used car market in general – wouldn’t you agree?

            But if I were selling an old project car right now, I’d be following the lead of the dealers and asking more.

          • 0 avatar
            Art Vandelay

            Sure, but the post was about old project cars.

            I don’t think that market is the same…a project car isn’t really purchased as a means of transportation…it’s more of a hobby.

          • 0 avatar
            FreedMike

            Well, if you had an old project car to sell, and made note of rising used car prices, you’d ask more too.

    • 0 avatar
      ToolGuy

      Blaming economic problems on greed is like blaming plane crashes on gravity.

      • 0 avatar
        FreedMike

        Hmmm…OK. But both examples you cite are factors, so citing them is not unreasonable.

        In the absence of gravity, planes would not crash.

        In the absence of greed – or call it profit motive if you want a less judgmental term – used car prices would not go up.

        Of the two items above, only one is a inviolable physical law. The other is behavioral. Gravity will force a plane down if it loses lift – that’s the law of physics. There is no physical or political law forcing dealers to charge more for used cars – they do it because they want to.

  • avatar
    dal20402

    This is the first month in a while when, when I checked the KBB values of my cars, they didn’t go up substantially. I was wondering if maybe we had reached peak car inflation, but now after reading a few more stories I think it was just a blip.

    Can we get to the point where a six-year-old fully loaded Highlander with 64k miles is worth more than the MSRP of a new base-model Highlander? It’s not that far off.

  • avatar
    fasn8n

    Cars are not worth more today, but there are plenty paying next decades price today who will learn a big lesson in the near future. Those paying above market now are what is known as a bag holder and will be in for a big surprise if they get in a liquidity crunch during the next recession. The house or car they paid a big premium for today will go for a big discount at that point.

    • 0 avatar
      tomLU86

      A. Parts shortages/supply chain issues.

      B. INFLATION.

      C. (unmentioned). The supply of vehicles people WANT will naturally become tighter due to the administration’s new “great” greenhouse gas emissions regulations.

      Unlike the 1970, when the US middle class bought new cars (many factors–real income being highest, but also cars didn’t last as long…), today affluent and upper middle class buy them. Presumably they are ‘smarter’ and better read on cars.

      If one had a 4-5 year old car in 1970 or 1971 and was “smart”, rather than keep that car, they would have been better off buying that new Olds Cutlass, Dodge Dart, or BMW 2002 in 1970, rather than wait till the car was 10 or 12 years old.

      In addition to the huge price increase to buy that similar car in 1975 or 1977, the newer car did not run as well. “Rough idle, stalled when cold, surged at x rpm” were common listed by Consumer Reports and the car magazines in the mid-late 1970s.

      It has had big ugly bumpers, something many people didn’t want. So if you waited, you paid more for less.

      That’s how I feel. Today’s cars are increasingly cluttered with features I (I’m a fossil perhaps) do NOT want. I’d rather have a 6-speed auto than 8. (I’d actually rather have good manual trans…). I’d rather NOT have touch screens,or push button trans selectors. I’d rather NOT have stop start. I’d rather have a vehicle that feels brisk than one that might not, and I’d don’t want a turbo.

      So future cars hold no appeal to me. Current cars have little appeal. But if I want a car for the next 10-20 years, it’s smart to get it NOW, because I don’t like the future.

      Finally, another elephant in the room–if all these great visions of “electrification” only PARTIALLY come to pass, then conventional gasoline car supply will diminsh as manufacturers convert to politically correct and government induced EVs.

      So for those who want a car for the next 10-15 years and see something they like, yes, suck it up, and pay the price and get it NOW. Because things will not be getting better.

      • 0 avatar
        jkross22

        tom,

        Have you driven an electric car? If you like simplicity, you’d love it. No gear box to service, no oil to change, no cracking valve cover.

        And the best part is that they really are great to drive.

        I love V8’s, simple interiors and manual transmissions, but I also love instant torque, minimal maintenance and reliability.

      • 0 avatar
        TMA1

        Well put, Tom. I’m hoping to grab one of the last new Challengers while I still can sometime in 2022, because nothing like it (V8, manual, RWD, comfortable coupe) will likely ever exist again. Plan to special order or buy used if I don’t find exactly what I want in new inventory.

        From what I’ve seen of the used market, buying new brings no penalty except the need to wait and the risk that an order may be canceled due to unavailability.

      • 0 avatar
        28-Cars-Later

        I overall agree with your assessment.

        “Finally, another elephant in the room–if all these great visions of “electrification” only PARTIALLY come to pass, then conventional gasoline car supply will diminsh as manufacturers convert to politically correct and government induced EVs.”

        It won’t since the vision is for the proles to not have easy access to private transportation (I could even see them linking access to public transit to the mark of the beast they want to roll out). Smart people have run the numbers, there isn’t enough supply or capacity for 16m EVs annually in USDM.

        Gasoline I’m fuzzy on, if Peak Oil has indeed arrived you’ll see less of it slowly over time but it should be available for the foreseeable future. But the dictatorship may also use it’s clout to make it scarce once the true big money has moved into something else, also would likely take many years.

        • 0 avatar
          tomLU86

          They don’t have to convert 16M annual units from internal combustion to electric.

          There are many moving parts here. Interest rates. The perceived wealth of affluent people if their paper fortunes in equities evaporate. Inflation.

          From 2015 to 2019, total units sold in the US AVERAGED over 17 million, so that’s five record years. 2020 was 14.5 million. So that’s a lot of potential late model used cars.

          Yet, with between 11 and 12M vehicles sold for 75% of 2021, which is around 14.5M cars, the way the car market is behaving seems like the new car market was under 10M (it crashed to 10.4M in 2009, from 16M in 2007), given the price ‘madness’.

          Even before the pandemic, the typical new car transaction was close to around $35k (it was at least $32k in 2019, I’m sure). Not it’s over $40. How sustainable is that?

          I liked the stories of people here who were of driving age in the late 1970s.

          If there is a vehicle you like, I’d get it now. Gasoline will be around for a while (as you note), but a vehicle you like may be harder to come by in the future.

          • 0 avatar
            28-Cars-Later

            “it crashed to 10.4M in 2009”

            A “crash” of sorts is what I am expecting to happen over the next few years, though not bullish on a production rebound thereafter. I doubt there is an exact target, but with supplies constrained and all of the artificial interference with diktats I expect the percentage of EV to go up from whatever it is now but not grow to more than 10% while overall production maybe hovers around 12m units in the short to mid term. This is intended behavior.

            I agree with your other points but will add nothing since roughly 2000 has been sustainable. They goosed interest rates down to create a post Dot Com/9-11 real estate boom and then crashed them in 2008 while they started printing more money than they ever had before. Every printed dollar buys less and less but from what I recall the reason massive inflation did not occur prior to 2020 was because most of those dollars never entered the real economy. IIRC a great deal sat in IOER accounts collecting interest and most of the rest went into various stock markets worldwide. Now many new trillions entered the real economy and I imagine some of those IOER reserves are now out chasing yield due the inflation domino effect.

  • avatar
    ttacgreg

    One nice thing this crazy market is that it allowed me to dump my rattle trap, recalled and buggy 2020 RAV4 hybrid and upgraded to a Venza that I found out of state that was listed for hundreds less than MSRP. (maybe sleek hybrids are not in demand in Montana?) I could’ve done better but for convenience and expediency I sold the RAV back to the dealer for $500 less than I paid for it after 23,000 miles and 18 months. Had the usual depreciation rates been operative, I would have been stuck with the RAV and all of its quirks and glitches.

    • 0 avatar
      FreedMike

      I’ve always had a soft spot for the Venza, and I like the new one too. If nothing else, it’s the only Toyota whose styling isn’t ridiculously overdone.

      I do wish they made a non-hybrid, performance-oriented version.

    • 0 avatar
      1337cr3w

      You know the Venza is a RAV4 hybrid with different sheet metal and plastic, right?

      • 0 avatar
        FreedMike

        Basically, it’s a luxury version of the RAV4 hybrid. Works for me – I’ve never liked the RAV4’s styling or cheap-ish interior.

      • 0 avatar
        ttacgreg

        Okay a bit of topic but here goes. Absolutely I do realize that lots is shared with the RAV4 but it is a different model. It rates 5/5 on consumer report’s reliability compared to the 3/5 for the RAV. It has a compliant quiet ride instead of brutally brittle ride that brought out all the rattles, creaks and structural groans on the RAV, and that is what I had hoped for. The RAV’s basics are solid, they just did not execute the details very well. And I had a few service department calls, a TSB for the fuel tank, as well as some not yet attended to gremlins that now I don’t have to deal with. The weirdest one was after a couple of long road trips the brake system loudly chirped and whooped for a few days after, even when the car was turned off. Get in the car and touch the brake pedal, and, WOOOP! Really, WTF?? Then there was the mysterious 12 V battery discharge overnight, widely reported on chat lines. Happened to me. After which I always carried a LI ion jumper battery with me just in case. I had cruise control fail. Had to restart the car to restart the cruise control. One of the rattles I experienced was not structural. After months of trying to figure it out I finally did. The leading edge of the rear plastic bumper where it tucks in underneath the vehicle is so thin and flimsy that it was literally flapping in the underbody airstream at highway speeds. My example was built in Japan too, which is supposedly higher quality. Not.

  • avatar
    olivehead

    Can someone explain to me the discrepancy between the rise of new car prices versus the rise of used car prices. For example, take a Honda Accord. A 2019 of that car in a given trim level with 15,000 miles may go for around 28,900. Same car, same generation, 2022 model, brand new, is maybe $800-1,000 more than the 2019. I don’t know about you, but at that price level, it’s a no brainer to pay the extra $800-1,000 and get the new car. In other words, while new car prices seem to have gone up, say, 5%, used car prices are up 25%. Makes no sense to me unless driven by a huge contingent of consumers who refuse on principle to ever buy a new car, even upon pain of death. Anyone have insight on this?

    • 0 avatar
      FreedMike

      Right, but that new Accord is basically unavailable now because Honda would rather put the parts they’d normally be putting in Accords into SUVs, which sell at a higher markup. The other manufacturers are doing the same thing. So, the “steady” sticker on an Accord is basically irrelevant, because you can’t get one.

      As a guy who once worked at a dealership, I’d add this: the used car department has ALWAYS been the moneymaker. Why? Because the used car guys can charge literally whatever the customer is willing to pay, and you wouldn’t believe the stupid money some customers spend on used cars. Right now, because the customer can’t get that new Accord you’re talking about, they’ll pay more for a used one becuase they literally don’t have a choice.

      • 0 avatar

        You also have a fun effect where it’s often easier to finance a used car for people with bad credit then a new one, in normal times there is some logic behind this right now I have questions if the algorithms are making poor choices. I had a customer a while back who was the head of finance for a dealer group he always found it amusing that some sub prime lenders would let him sell a used ES for monthly payments 100-200 more a month then he could have sold them a new one for.

        • 0 avatar
          FreedMike

          Well, lending is all about returns, and you can make more charging a higher interest rate to people with poor credit. Thus, lenders are willing to take on more risk.

          Plus, these days, with used car pricing being what it is, I imagine the prospect of repos isn’t as scary.

          • 0 avatar
            28-Cars-Later

            Golden age for subprime.

          • 0 avatar
            FreedMike

            @28:

            I’m seeing a a definite uptick in riskier loans, but it’s not like before 2008. Back then, it was people with s**t credit, or zero down payment, or no provable income (or, hey…check all three boxes for the trifecta!!!) getting bought.

            Today, it’s more “alt income” – stuff like loans where you add up a business owner’s monthly deposits. Of course, that’s bulls**t income, but the credit and LTV requirements are fairly high, and you need a few months’ reserves in the bank. A bit risky, yes, but nearly as horrifying as the stuff I saw before.

            On the “ill wind” front, though, the nail salon ladies are making a big comeback. All of them make precisely $8,000 per month, no matter whether they’re in L.A. or Mobile, Alabama. It’s magic. It’s like all the mortgage brokers in the United States have agreed on a fictional salary for all of these folks, and it’s $8,000/month – no more, no less. The number of the counting shall be $8,000 and $8000 shall be the number of the counting. Saw TONS of them before things blew up the last time. I have to remind myself this is not 2007.

          • 0 avatar
            28-Cars-Later

            @Freed

            What you are describing, is it more for mortgages or all types of loans?

          • 0 avatar
            FreedMike

            Mortgages are the only loans I am involved with.

          • 0 avatar
            28-Cars-Later

            Thanks. I think the subprime is happening more for vehicle and other sales vs real estate. I think subprime buyers along with qualified ones are simply being shut out due to bidding wars and cash deals coming in from funds and from overseas.

    • 0 avatar
      AK

      The root of the issue is that there are no new Accords.

      No new Accords means used Accords are in demand. Demand goes up, price goes up.

      A used one for $1k less than a new one seems silly but the used one exists and can be taken home today. To get the new one, you’ll have to put down a deposit and get on a waiting list (and in a lot of cases have to deal with dealership markup and add ons).

    • 0 avatar
      Art Vandelay

      It is like the current situation with computer graphics cards…the MSRP of a 3080 isn’t relevant because nobody has them in stock new.

      Incidentally I could have purchased a used car last year for what I got for my old 2080 super. The market is crazy.

  • avatar
    FreedMike

    Well, I’d say this is good evidence that “the economy is in free fall” argument is off – clearly there are people out there that want cars, and can pay for them, but can’t buy enough of them off the new car showroom. Therefore, the higher prices for used cars.

    Supply and demand, folks. Capitalism in action.

    • 0 avatar
      JMII

      Correct. And the lack of new vehicles means no trade ins and thus cycle repeats. I’ve got two dealers that are actively trying to buy my used truck, never experienced that before. However there is no inventory for me to buy its replacement so its a bit of a catch 22.

      As mentioned many dealers are adding ADMs (markups) so MSRP is now considered “normal”. In some ways this is a good thing as your no longer playing games trying to get a lower price. The downside is at some point the market should correct. But the longer things drag on and interest rates go up MSRP is going to seem like a bargain. At this point just finding a vehicle that meets your requirements is hard enough so your going to pay thru the nose.

    • 0 avatar
      jkross22

      Mike, you don’t believe there’s something odd smelling about supply constraints right now? Last year, sure, fear was leading everyone around by the nose and people thought covid somehow attacked your butthole. Hence the run on tp. /s

      • 0 avatar
        FreedMike

        @jk:

        When the pandemic started, I was living with my ex-girlfriend. She panicked and bought a ton of canned goods, and when she couldn’t buy toilet paper, she bought two 20-pack boxes of Kleenex. I told her she was being silly (in less judgmental terms, of course) but she was having none of it. When we split up and I moved out last November, she still had all the Kleenex – and was b*tching about having to pay move them to her new place. Of course, this is the same person who still did laundry and room clean up for her 26-year-old incel kid who literally lived in the basement, and when he wasn’t working (VERY part time), he was playing video games and watching hentai porn…loudly.

        Ah well…live and learn.

        I think the chip shortage is very real. Car manufacturers would CLEARLY want to build more vehicles if they could – the used car market proves there’s people out there who are willing and able to buy vehicles, even if they’re used and inflated to new-car MSRPs.

  • avatar
    ponchoman49

    Getting us prepped for those electrics that will average 50-60K in the not too distant future. The family unit has been destroyed. The entertainment and music industry is a shadow of its former self. Christmas has been ruined by consumerism, greed and rotten people. Now they are after the auto industry and this is only the beginning. And naturally the pandemic is being blamed and utilized in so many ways to bring this about. It is going to be a very rocky ride so hold on tight!

    • 0 avatar
      FreedMike

      “Getting us prepped for those electrics that will average 50-60K in the not too distant future.”

      The best selling vehicle in America is the F150, which routinely goes out the door for $50-60,000. Number two and three are also full size pickups that also routinely go out the door for $50-60,000.

      And the manufacturers can’t make enough of these vehicles that you seem to think are too expensive for the average consumer to buy.

      I don’t see your point.

      • 0 avatar
        jkross22

        How many of those F150s are work trucks? How long do F150 buyers typically hold onto their rigs vs average SUV buyers?

        Easier to justify a big price tag if it’s a business expense or the runway of ownership is 10+ years.

        Average fleet age in US was 12 years a year or 2 ago.

        • 0 avatar
          FreedMike

          @jk:

          I don’t know how many trucks are sold for personal versus business use, but if you look at a dealer’s lot, you’ll typically find more for the former than the latter.

        • 0 avatar
          el scotto

          @jkross22 Sir, I am by no means trying to stir up the truck guys. Ford F-150 XLTs are usually Ford’s best selling F-150. They’re not vinyl seat, vinyl floor no CD player cheap like an XL. Ford guys correct if I’m wrong; then the F-150 goes Lariat, King Ranch, and then Platinum. Feel free to yell at me Bow-tie, Jimmy, and Ram guys but I think those three have the equivalent trim models and pricing.

    • 0 avatar

      I think what you seeing is more the class divide. Automakers see much more profit from the top 20% of households then the rest so they have decided to basically only cater to that market and let the rest of the market be used cars. I only see this getting worse in the future.

    • 0 avatar
      swester

      @ponchoman49

      Minus the whole electrics and pandemic part, your tiresome tirade could be applied to what old, out-of-touch people have been saying during almost any decade of the past 150 years.

      Yeah, blah blah blah, the future is scary. Morals are gone. Prices are up. Won’t somebody think of the children?!

  • avatar
    Land Ark

    28-cars-later: If you read this, can you pull the latest auction results for 2018 Jag XF Sportbrakes? I have my eye on one locally and it seems like it’s about the only car that hasn’t appreciated over the last 12 months.

    All of this makes me think cars were under priced. If people in great numbers are paying dealer markups at a time when supposedly unemployment is high, it seems more likely that prices will remain high as there is clearly the market ability to bear the current trend.
    Which ultimately is good, I guess, since manufacturers will have the ability to price EVs so they they can make a profit and people will still buy them.

    • 0 avatar

      The pandemic caused a huge increase in income for the top 20% (over 135k a year household income) in both wages and savings (stock market etc). So basically the people who already had some money now have a lot of money, those are the people buying cars right now.

    • 0 avatar
      28-Cars-Later

      I’ll have to check later this evening, work put in a thick access control list and a lot of stuff is blocked now (though strangely not TTAC).

      • 0 avatar
        28-Cars-Later

        Pondering… how is my $17,500 Toyota now worth $21,000+ used? How do I have *equity* in a used car I’m still making payments on? Mad, mad world.

        2018 TOYOTA COROLLA IM 4D HATCHBACK

        12/8/21 $22,000 23,449 4.2 4G/A Black Regular West Coast California
        12/2/21 $23,000 24,061 4.4 4G/6 White Lease Southeast Caribbean Subasta De Autos
        12/6/21 $18,200 24,126 – – 4CY/M – – Regular West Coast myCentralAuction
        12/10/21 $20,500 24,129 4.2 4G/6 Black Regular West Coast Nevada
        12/21/21 $22,600 24,493 4.3 4G/A White Lease Southeast Caribbean Subasta De Autos
        11/22/21 $21,100 26,199 3.9 4G/6 Silver Lease Southwest Denver
        12/17/21 $21,250 27,442 4.3 4G/- – White Regular Northeast Pennsylvania

    • 0 avatar
      28-Cars-Later

      @Land Ark

      I’m not seeing a “Sportbrake” trim for the XF in MY18, it has the trim listed as “4D HATCHBACK S” and then “4D HATCHBACK FIRST EDITION” and I have no idea what those are supposed to mean (whyyy can’t they just have normal trims again?). Looks like they pull about mid 40s with the S being slightly more expensive on average. I’m not seeing this “hatchback” trim at all in the XF for MY19, not sure why (could be none have come up for sale yet or maybe it was dropped?). Car and Driver said Jaguar only sold 12K units in USDM in MY18 so yeah these sound kind of rare.

      MY18 JAG XF AWD V6 – 4D HATCHBACK S

      9/7/21 $46,000 20,088 4.8 6G/A White Regular Southeast Orlando
      8/25/21 $47,900 23,373 4.7 6G/A White Regular Southeast Wilmington
      12/2/21 $47,500 26,477 – – 6CY/A White Regular Midwest Minneapolis
      10/29/21 $49,250 29,924 4.1 6G/A Red Regular Northeast Pennsylvania
      10/29/21 $47,000 30,140 4.9 6G/A White Regular Northeast Pennsylvania
      9/16/21 $43,500 41,595 4.6 6G/A Silver Regular Southeast Palm Beach

      MY18 JAG XF AWD V6 – 4D HATCHBACK FIRST EDITION

      9/9/21 $46,200 11,908 4.6 6G/A Black Lease Midwest Chicago
      1/5/21 $43,000 13,404 – – 6G/- – Black Regular West Coast Seattle
      4/19/21 $45,500 14,753 4.4 6G/A Black Regular Southeast Orlando
      7/30/21 $44,500 26,353 4.6 6G/A Black Regular Northeast Pennsylvania
      10/22/21 $45,250 34,715 4.8 6G/A Black Regular Northeast Pennsylvania
      10/14/21 $43,750 35,163 4.4 6G/A Black Regular West Coast Phoenix
      10/1/21 $38,957* 43,834 – – 6CY/A Black Regular Midwest Chicago

      • 0 avatar
        Land Ark

        Awesome! Thank you so much!

        Those trims match up with the Sportbrake, the First Edition was only available on the Sportbrake. If they sold them in 2019 in the US I’ve not seen one for sale. It’s pretty amusing to think the First Editions were part of a single model year run. Those were apparently the highest trimmed versions so it’s odd to see them selling for lower prices.

        I’m going to pretend I didn’t see this since the dealer is asking $48k with 28k miles – meaning the price isn’t outrageous. The one I’m looking at isn’t perfect, it’s got quite a few flaws for something with 27k on it I wouldn’t expect. The front bumper looks to have been rock chipped more than I would expect.

        Again, I appreciate your help.

  • avatar
    ajla

    I think a few of you are too much on the doom side. Production volume will eventually go up and prices on new and used vehicles will fall. I don’t think it will be next year but it won’t take until 2033 either.

    Some manufacturers might have it in their heads they can “new normal” low supply but unless their business cards say “Ferrari” it isn’t going to work.

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