I'm waiting for some type of exotic (slow and unloved Ferrari, 911, NSX, Lotus, etc) to pop up in "needs some love and I'm desperate to sell" condition.
I mean pretty much every Europa fits that description.
I'm waiting for some type of exotic (slow and unloved Ferrari, 911, NSX, Lotus, etc) to pop up in "needs some love and I'm desperate to sell" condition.
I mean pretty much every Europa fits that description.
TJL said:It wont be good for the financial side of the country prob, but Im glad there is going to be a reset. Why the berk it ever became "normal" or acceptable to have a 800$-1200$ car payment for a pickup truck or suv is beyond me. And on top of that so many of the new cars are butt-arse ugly i wouldnt want them anyways.
but im a cheapo and not in their market anyways so my opinion is moot to them.
people need to be a bit more financially responsible. Im waiting for the housing market to take a crap. The house behind me which was a dump, has 1/3rd the lot size of mine, sold for 198k a few months ago. That house actually was a ghost of 2006, they were about half done with it when the market tanked and it sat unfinished until about a year ago when it got bought, crapily finished and flipped.
My house was 99k 8 years ago. People forgot 2006 very quickly. Sure, blame the banks and whatever, but who signed the loan paperwork?
Easy credit makes everything more expensive because it becomes accessible to more people.
Heck, when Paypal Credit started practically giving away $2500 worth of 6- and 12-month zero interest credit, the price of JDM drivetrains on eBay soared. Now it's like you can't touch an SR20DET dropout for under $3k, and the only cheap RBs are nonturbo RB20s because some joker in Japan shoved it into the container and now the importer has to move it or scrap it.
On the other hand with less new cars being sold, there are less trade-ins for sale at the auction. Less trade ins mean the ones that are there should stay relatively stable price wise right? Supply and demand.
I think the newer used cars are going to be the hardest hit price wise. With dealers making deals on a new car why buy a 2 year old used one.
The 20 year old cars we play with I think will stay fairly steady price wise.
I have been keeping an eye out for a 987.2 Cayman or a z3 m coupe and have not seen those prices drop yet.
So, for those of you in the know, what does a dealer expect to make on a used car?
Pretty open question, I know, but more specifically, on a $10k, $15k, or $20k car? I ask for a reason. Another car I'd inquired about was originally $12,500 and dropped to $10,900 after a month. I wasn't interested after I spoke to them, but noticed it's now popped up at a medium sized used car dealer for $8800. For sure the used dealer paid way less than that, unless they're affiliated, but I have no reason to believe that. Would it not have made sense for the original OEM dealer (it was a trade in) to just be fair with the price?
Decided to follow the rules this time and stay home today. The other car will still be there when this E36 M3 is over, and they'll still be looking to deal
Alot of dealers pay for cars with a floorplan. They basically use the auctions money to pay for the car. Most floor plans are 90 days. If the dealer doesn't sell the car within that time frame they have to pay said car off. If a unit has been on the lot for awhile and the floor plan on that car is coming due the dealer will often sell it at a loss to pay it off.
As far as average profit per car I averaged $750 a vehicle for the 9 years I owned my used car lot. Most cars I sold were in the 4k to 6k range.
I sold 15 cars last year and averaged right under $1000. Most were in the 3k to 5k price point.
Peabody here said:So, for those of you in the know, what does a dealer expect to make on a used car?
Pretty open question, I know, but more specifically, on a $10k, $15k, or $20k car? I ask for a reason. Another car I'd inquired about was originally $12,500 and dropped to $10,900 after a month. I wasn't interested after I spoke to them, but noticed it's now popped up at a medium sized used car dealer for $8800. For sure the used dealer paid way less than that, unless they're affiliated, but I have no reason to believe that. Would it not have made sense for the original OEM dealer (it was a trade in) to just be fair with the price?
Decided to follow the rules this time and stay home today. The other car will still be there when this E36 M3 is over, and they'll still be looking to deal
Sub $15,000 inventory is high risk/high reward territory. These tend to be older, higher mileage cars that can eat you alive in reconditioning costs. Conversely, they are also the highest profit margin vehicles ($3000 profit isn't uncommon) and clean ones are very difficult to source. Typically there are three paths for these car if they're taken in on trade:
1) Car requires too much recon and gets kicked wholesale. Any decent used car manager will assume this is the default option and will make customers an offer accordingly.
2) You're a scummy dealer and you don't mind selling these types of cars "as is." Customer signs paperwork absolving the dealership of any liability. Only recon required is whatever it takes to pass your state's safety inspection.
3) You're a decent dealership and don't sell ancient vehicles that leak oil like a seive. This eats into your profit margin and likely drops you back into the $1500-$2500 range.
Source: 15 years at two Fortune 500 used car companies. AMA.
Hmm. Maybe I'll finally be able to pick up a half decent AE86...
As several others have said, it's likely to hit the hobby spending, not the investment spending. So muscle cars with already stagnating prices and the mid-level classics are likely to be hit harder than the high end cars. Although I wouldn't be surprised if bargains can be had in the upper echelons as well, but I suspect they'll be rarer.
In reply to BoxheadTim :
Wouldn't it be the other way around? The investors would not be so keen on spending money, but the hobbyists would.
Project cars never seemed to slow down in a down economy, in fact a lot of times they were the only work we had. People with money will still spend it on toys.
The trick is to be interested in something too under the radar for the free spending to take interest in.
In reply to Pete. (l33t FS) :
I was more thinking about distress type sales - it's more likely that you'll end up having to sell one of your toys in a down economy to tide you over because you have to make up the shortfall in income or cover unexpected additional expenses. That's less likely to apply if you have serious collector money (like people who happily shop for 200-300k cars, not people who buy a pristine Integra Type-R).
But I take your point re spending on project cars in a down economy. I'm definitely still in the working stiff class, but I probably spent more on the hobby vehicles in the last couple of months than I did in the previous year.
I'm sitting at an interesting place for this discussion. I have a classic car for sale on autotrader that has been professionally valued at a certain price and I am asking $4000 under the selling valuation price on the sales site. Definitely not a blue chip car, It is a driver level car, which is not the bottom of the market, it needs nothing to drive anywhere but its got some miles and a small bit of rust.
What puts me in a decent position is that both me and my wife's jobs are essential so we both work full time, and the only debt we have is the mortgage, which will be paid off in 4 years regardless. I already drive the car whenever I want, and however I want. I lovingly care for it, as if I was keeping it forever, and with the current market that may well happen. At any rate, either it will sell at or near my asking price, or it will get driven regularly as it was meant to be and enjoyed and will be scrapped with 400,000 miles on the clock when I die of old age, or sooner, and then my wife will likely offload it to the first person to show up with 50 bucks.
I think it will be interesting to watch the car market over the next 100 years as we transition to autonomous cars and our precious vehicles get relegated to the role of the horse. Makes me reminisce about the song Red Barchetta by Rush.
In reply to BoxheadTim :
Yeah, it seems like distress type sales will be far more probable while the economy is massively down. Cashflow will be an issue for individuals and businesses alike. So, it seems like there will be good deals to be had if you find that person willing to cut bait on something in order to get cash for essential needs. That said, for cars priced at the "transportation" level - like sub 10k, there is going to be strong demand since the majority of people need a car to earn a living in the US. And a good chunk of folks trading down into more affordable transportation.
I think people are probably going to start honing in on buying the $7-$12k. vehicles. I got out of the auto industry last November and at that point, $10-$15k vehicles were the ones people were interested in.
Put my money where my mouth is and put some offers/trades out on a Merci, nobody is even biting at 15-20% under market. Nobody wants the ACR as a trade that is for sure. Tons of people offering to buy at about 70% of market right now though at least in the exotic world. Like normal if you offer about 7-9% off asking for the stuff marketed by a dealer you find yourself with a car is what I hear from friends.
Low end is going cheap though for projects right now. Keeping my eye out for a Thunder ranch Riot as I found my old one for Sale in Louisiana and got the bug to build something AC VW based when I get some space cleared out. Shipping would have been the cost of the car.
In reply to wearymicrobe :
Why wouldn't an exotice car dealer want your ACR as a trade? The accident?
dxman92 said:I think people are probably going to start honing in on buying the $7-$12k. vehicles. I got out of the auto industry last November and at that point, $10-$15k vehicles were the ones people were interested in.
Interesting - I've been thinking about "upgrading" my Powerstroke - I don't really drive it that much anymore so the Diesel maintenance tax is biting harder, and it's rust free so it should still fetch a few bucks.
Anything that you could consider a decent family-ish truck (ie, more than two seats) that looks like it may still have some life left in it is between $6k-$12k.
docwyte said:In reply to wearymicrobe :
Why wouldn't an exotice car dealer want your ACR as a trade? The accident?
Liability. They don't want to do test drives in a 800hp car with no safety features that is hard to finance. Its right in that price range where someone will stretch to buy it on a loan but not pay cash. Plus I am beating them up on the other side to get the Merci. Lot of older lambos have deferred work that they need to fix and eats in to the resale numbers.
I am looking at 4runners and came across a distressed sale add. They were looking for someone to take over payments and/ or rent it from them. They did not want to transfer title.
Cost for this privilege for a 2018 4runner premium (one with fancy grill and AWD) $970 per month. I think this speaks to were the troubles are going to be seen. Must have been upside down to get into a 4runner for that much scratch. Loss of income and that becomes a big nut.
What was the number pre pandemic? 33% of people rolled additional money into cars? I feel we will be seeing repo's in the 1-5 year old cars that have a ton of neg equity. Will take a bit longer to kick in, repos are still a few months away and maybe longer with loan forgiveness being offered. True question is how long will people be down on pay?
former520 said:I am looking at 4runners and came across a distressed sale add. They were looking for someone to take over payments and/ or rent it from them. They did not want to transfer title.
How does that even work from a legal standpoint? I bet the lease agreement prohibits renting out the vehicle. But if you did, and the next person stopped paying you, how are you going to re-possess a vehicle to which you don't have title? This sounds like a hot mess in the making.
Although, as former520 pointed out, they are already in a hot mess paying $970 (!!?!?!?!?!?!?) per month payment.
In reply to DWNSHFT :
Probably had the last truck's upside-down loan rolled into it... which also had an upside-down loan rolled into it.
The automakers love this, because the money is not in selling vehicles, or selling service, the money is in financing. The vehicles are just something to finance.
In reply to former520 :
Lawd
yupididit said:In reply to former520 :
Lawd
Really. That's a house payment in some parts.
In reply to Floating Doc (Forum Supporter) :
thats how i think of it. Am i going to ever be OK with spending house $ on a car? Absolutely not.
much better investments for that $$.
Floating Doc (Forum Supporter) said:yupididit said:In reply to former520 :
Lawd
Really. That's a house payment in some parts.
I also wish that was a house payment lol
This article from R@T sums things up pretty well.
yupididit said:Floating Doc (Forum Supporter) said:yupididit said:In reply to former520 :
Lawd
Really. That's a house payment in some parts.
I also wish that was a house payment lol
Man, $970 is a house payment AND a car payment...
You'll need to log in to post.
