• Mar 8, 2009
The cynic in you might think that a rise in the price of used vehicles, just as new car sales are cratering worse than anyone can remember, is a not-so-transparent ploy to overcharge buyers. It turns out to be more a case of supply versus demand. Wholesale used car prices are bumping up as a result of sagging new car sales, according to auto auction company Manheim. Two-thirds of new car sales have a trade-in attached, which creates a supply stream of pre-owned vehicles to recycle onto dealer lots. With sales so far down, trades are harder to come by, so those cars that are available are fought over more fiercely. The wholesale price rise indicates that dealers are duking it out harder at auctions, more than saying anything about prices consumers are paying. It's our suspicion, looking at how long everyone's inventory is sitting around, that anyone able to buy right now can virtually write their own deal.

[Source: Auto News - Sub Req.]


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  • 54 Comments
      • 5 Years Ago
      This article is absolutely spot on. I'm a used car manager at a Toyota dealership, NICE units are tough to find right now and are bringing insane money, I watched 2006 BASE RAV4 4WDs with around 30k on the clock bring $15,500-16,000 at auction less than 10 days ago. Siennas? All the money, 05 LEs with 50k bringing $12k.. insane money isn't the word for it.

      New MSRP on that RAV is around $23k.....
      Jvijil
      • 5 Years Ago
      lol i just bought a touareg and i walked in and like u said negotiated my price with little hassle. i even got the nav option thrown in for free
      • 5 Years Ago
      Good, I need someone to buy my Mustang... :)
      • 5 Years Ago
      Interesting how no one has mentioned new car dollars are deductible this year because of the Stim.
      • 5 Years Ago
      there are so many people here ,I think most of the family have to think this question !
      • 5 Years Ago
      Hey, live from check-to-check and sooner or later it's going to come back and bite you in the rear. My wife and I paid off our 30-year mortgage, without having refi'd in between, in 8 years by just paying on-time and doubling up when we could to pay down the principal, instead of just paying interest month-to-month. After a year of having no mortgage, we got ourselves a nice little used LS430 with all the fixing and 28k miles, which we always wanted, for about the price of a new Accord I4.

      Look, if you sacrifice in the beginning and live a little smarter and don't spend like there is no tomorrow... then you find out that there is a tomorrow and you can live it much better.
      • 5 Years Ago
      quote:
      Autblogist: "the last time I checked you still needed financing for a used car, "
      umm, no you don't.
      i've been in school all my life so far, work part time, and have just bought my 4th car. Every one of them i've paid cash. you don't need financing to buy a used car. It's called SAVING up. It's a concept most Americans don't understand, but it's really quite simple. You put money in the bank, and then wait and put some more in, and then eventually you will have enough to buy a car with it! And guess what, every now and then, the bank adds some money to your money! It's awesome! You should try it.
      • 5 Years Ago
      O Rly?

      I've been watching a pre-owned car online for four months and in that time, the price has dropped $6K.
        • 5 Years Ago
        Check the engine bay for squirrels.
        • 5 Years Ago
        Sean- Yes, yes, yes, and yes. And it's only a year old.

        Oh, and economical and "easy on the MPGs" pretty much amounts to the same thing.
        • 5 Years Ago
        Can you be a little more specific? Is it economical, safe, reliable, and easy on the mpgs?
      • 5 Years Ago
      I'm in the business and financing is available for anyone with good credit. It doesn't have to be perfect but they are looking harder at debt to income ratio, the amount financed in relation to the loan value of the used vehicle or invoice on a new vehicle. If you can't pay for what you have, why should they put you in a more expensive vehicle? Gone are the days of financing 120% of MSRP with no money down. Most lenders are wanting some equity. It only makes sense. Stupid lending is and was the whole problem with housing, cars, etc. In the 80's and early 90's banks only loaned 80% of MSRP. Plus they did not stretch out the terms to 72 or 84 months. If you are financing a car for more than 60 months, you are buying more car than you can afford. Smart money stops at 48 months with at least 10% down. You build equity much quicker.

      New Car Sales are way down and that means fewer vehicles being traded in. Auction prices are up because fewer vehicles are available. With new car margins being squeezed by the manufacturer some dealers may drop new cars altogether. Used Cars are profitable and most New Cars lose money after everything is said and done.

      The problem is not all about the economy. Cars are better built and people are hanging onto them longer. We have more people working from home and shopping on the internet. This means people are putting fewer miles on their vehicles and they don't need to trade as frequently.

      We can bail out the industry but it will not create demand.

        • 5 Years Ago
        "If you are financing a car for more than 60 months, you are buying more car than you can afford."

        not necessarily, sometimes its just stupid lending

        i don't know how it is now but when i bought a year ago, the interest rate was the same for 2 3 4 or 5 years. with no penalty for early buyout, woulda been silly for me not to give myself the option of lower monthly payments when i need them.


        • 5 Years Ago
        I agree. Sometimes we just have enough stuff. With cars being so well made now there is no reason to get a new one every three years. You can't create demand when people have what they want unless you screw them to begin with (I Phone).
        • 5 Years Ago
        Driver X, how dare you come here and suggest people buy what they can afford. You are a terrorist, you want us to stop living our lifestyle, fancy cars, houses we can not afford, vacations (guilty), secret santa gifts, buying expensive gifts for birthdays and all that.

        Living small and saving.....................please.
      • 5 Years Ago
      I would think as the transaction price of new cars drops due to buyer-friendly deals, this should push down used car values as well. You can't have a 2-year old used car being only $2k less than the new version of the same car, right?
      • 5 Years Ago
      Keeping a car longer or buying used makes great sense. However for many who are car-mechanically challenged it might make more sense to buy a new car with a brand new warranty.

      You may save money by buying used but if the car suddenly needs some work on replacing some parts, it can get very costly, especially with dealers or mechanics charging close to $70/hour or more for labor. One $1,000 job is already 4-5 months of a Honda Civic lease payment.
      • 5 Years Ago
      I was told by the dealer that in the past two months my car's value has increased by $5,000. I think it's a ploy to get me to buy a new car, but still...he did say they're increasing in value.
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