Yeah true... there will be a glut of used cars. Therefore more people can afford to get a used one, which will lower the brand premium they've been enjoying.
I doubt it with multiple large manufacturers discontinuing cheaper cars and continuing to push up market. If there was a market for cheaper cars, there wasn't enough demand to be sustainable.
Lightly used cars have become far better value than new cheap cars.
Yes, only new cars. I think it this could also mean the reverse for used cars: They get more expensive because everybody wants them and no new are produced.
Exactly. That's clearly not sustainable. Either new car prices will keep going up or used car prices will plummet. I think the latter is much more likely.
We won't really know until it happens, of course, but perhaps the glut will be new cars, not used -- if a lot of people change their purchase decision from a new car to a used one to save a few bucks.
That's not "certain." When market conditions change, you'll occasionally be able to get a new car for less than what you'd pay for a used one of the same type. Drastic changes in fuel cost and manufacturers discontinuing an unpopular model are the sorts of things that lead to this situation.
I for one cannot wait for the used car market to crash. The new car prices have gone and I don't expect them to come down. They will keep the prices at the same inflated level and offer deals and/or loans. However there is room for elasticity in the used car market and can see it coming down as new car availability becomes better.
This is a natural market progression and will happen. Most automakers built higher cost, lower volume "premium" products for less price sensitive early adopters. As the product and market matures, costs reduce and more mass market products are available at lower costs (Model S->Model 3 -> Model 2 etc). Used cars also become available over time to increase supply and lower costs for a different market segment.
So new cars are going to be come more expensive due to supply limitations and in turn used cars will continue to become more expensive as they can rise to a certain % of the new car price. At the same time housing prices continue to sky rocket. Seems like not a great time for someone just stepping into adulthood and financial responsibility.
Yes, this current crop of vehicles is still on the high even of what a middle-class family might spend on a car, calling the for the rich is an exaggeration. If you only look at Teslas and Porches you are not seeing the complete picture. You’ve also got Hyundais, Kira, Fords, and Chevys at lower prices. The next round of vehicles promise to be less expensive. New cars have always been hard to afford for the lowest incomes but as sales volumes increase, that means a large supply of used cars start to become available.
I wouldn’t hold my breath - there is still plenty of excess demand for new cars to be worked off before auto manufacturers will need to lower prices - evidence of this is the decline in used car prices, but now where bear back to “trend” levels… https://site.manheim.com/en/services/consulting/used-vehicle...
Though, if you're budget-conscious, why buy a new car at all? Used cars are a better deal. Leave the new cars for people with more money.
reply