Used Car Prices Crash To Lowest Level Since 2009 Amid Glut Of Off-Lease Supply

Tyler Durden's picture

The U.S. auto market is at an interesting crossroads with used car prices crashing to new lows every month while new car prices continue to defy gravity courtesy of a somewhat 'frothy', if not suicidal, lending market that has seemingly decided that anyone with a pulse is financially qualified for a $0 down, 0% interest, 80 month loan on a brand new $40,000 luxury vehicle of their choice. 

As the Labor Department’s consumer-price index data showed last Friday, used car prices once again dropped in July to the lowest level since the 'great recession' of 2009.  In fact, since the end of 2015, the cost of used vehicles has dropped in all but three months and are now roughly 10% off their 2013 high.

 

Unfortunately, the outlook for the used market is only expected to get worse with the volume of lease returns expected to soar to nearly 4mm units by 2018.

Auto Leases

 

Meanwhile, despite modest weakness over the past two months, new car prices have held up fairly well...

 

...even as the domestic auto OEM's continue to flood dealer lots with new inventory that isn't moving.

 

Of course, logic would dictate that some level of substitution would have to take over at some point as the financial benefits of buying a used car eventually outweigh the social indignity of cruising around town in a 3-year old clunker. 

That said, those innovative "Low Credit Score" discounts do make new car buying very attractive...

Truck

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Blue Balls's picture

Why doesn't Janet lower the interest rate?    /sarc

The_Juggernaut's picture

THey have a lot further to go before I'm interested.

MozartIII's picture

Oh don't worry. The prices are about to go alot lower. They will soon come to a cliff that they can not avoid falling over. Cheap shit vehicles for all!

Peacefulwarrior's picture

"Let them Eat Cars" (instead of Cake)

knukles's picture

Well, I for one am going to stick with my 2 y/o Tesla because so far I haven't had to put a drop of gas in it.
I'm driving for free!

(do I really need the sarc?)

bamawatson's picture

powered by red wine & ambien; magic !

Stuck on Zero's picture

I'm waiting for a massively tricked out used Jeep Rubicon to come on the market for $10K.

dasein211's picture

40,000$ for a new piece of shit dodge who's tranny is worse that a drunk kaitlyn Jenner?!

Canadian Dirtlump's picture

366k kms on mine never had an issue. co workers is 1 year newer and is just under 300k same thing. lucky twice i guess.

Haus-Targaryen's picture

Used car prices still need to fall much much much further before I would be interested.  

I keep thinking of replacing the now 12 year old Lexus I drive with something a bit newer.  The new Infiniti Q50d seems appealing as its got the exact same engine and transmission as in the Mercedes C220d but for €10k less.  The Lexus has A/C issues now, and squeeks over bumps, but by-God it starts; it goes and its paid off. 

Perhaps I'll just deal with the A/C issues and stack 20k in silver. 

The central planners can eat out my ass with a spoon. 

political_proxy's picture

how succinct

if they [the heavily gov subsidised US auto makers] could make cars where the odometer made it (even) close to the 200k mark...

the artist's picture

I know of a slightly wrecked Dodge Challenger...

Haus-Targaryen's picture

I hope someone is following the VIN on that thing.  Put it in a museum somewhere. 

Utopia Planitia's picture

2 y/o? How can you stand it? Oh, hope your batts don't catch on fire...  :-)

yogibear's picture

See so many cars on lease. Three years and their in the used car lot.

 

HarryKallahan's picture

.

It's been that way for a very long time. Leases are NOT new.

It's complete bullshit that used car prices are in a freefall.

Look here:  

  www.cargurus.com/Cars/price-trends/

cheeseheader's picture

Yep, my new name is cheap bastard.  Can't wait (well, maybe I can) for the bestest new 10yr. old F-250 in our local market to come on down for my perusal.  I ain't too picky on color.

wisehiney's picture

The nigger in the kitchen making your cracka ass a "tasty" meal, just had his car repo-ed.

You will get some extra tonight.

cbxer55's picture

My favorite place, and the only restaurant I go to, they're all white. I know, that's racist! ;-)

cbxer55's picture

I see what you did there!

Never been in one! LOL though. Can't get a margarita at the Cracked Barrel. ;-)

Kurpak's picture

My paycheck is the same as it was in 2009, welcome to the party used cars

Bill of Rights's picture

Work harder then, there are 24 hours in a day.

translator zero's picture

Kurpy - like the rest of us - your paycheck is the same, but it's made out in rubber dollars => we are all going backwards.

Never One Roach's picture

"You're just lazy."

 

~ Jack Ma

Bill of Rights's picture

Restaurants, Cars who cares. But it amazes me how we were told things were so wonderful under the former puppet administration.

Korprit_Phlunkie's picture

We all reminice back to the days of Cash for Clunkers. Obama's second greatest accomplishment behind obamacare.

political_proxy's picture

"were" -- "are" the names change the game remains the same

example:the unemployment rate is 5% ish
yet the number of unemployed in the US is well over 90 million working age people
in a nation of about 310 million of all ages

BGO's picture

Time to fire up the bailout machine! Its only money.

The Gun Is Good's picture

Yeah. Aren't we about due for some wild bail-out / bail-in action?!

Mr 9x19's picture

bail in and bail out are essentially the same, at the end you are the one fucked who pay.

peippe's picture

most of us are waiting for the exciting new 2018 Hybrid Rikshaws to arrive at the dealers.

11b40's picture

Can you negotiate for a Coolie?

Is that racist?

cbxer55's picture

You certainly can negotiate for a hummer! ;-)

Ray Donovan's picture

I've been looking at Acura SUVs something decent mileage wise around 2008-09 is 14k and up. I just don't want to spend that kind of money, it can keep on dropping I can wait.

digitalrevolution's picture

I drive a 2011. Had a 2007 prior to that. Spend the money - they're worth every penny. Just make sure if it's 100K miles or more that it has timing belt service done. Otherwise no deal.

yellensNIRPles's picture

Yup. The used car prices are still way too high. Let them all collect dust and buy when it's obvious it's the right time.

1.21 jigawatts's picture

Ima wait one more year to pick up a pickup for .3 BTC.

MonkeyKnutz's picture

Damn it, and I just moved back to Michigan, this one horse town is going to get raped.  

Conax's picture

I took a bath on my old Bronco. You can hardly give away older trucks because so many newer ones are for sale cheap.  Actually I like the idea that working people can pick up a better car for less, this gives them a little more disposable cash for such necessities as ammo and silver coin.

political_proxy's picture

would be awesome to procure a '70s Bronco!

youarelost's picture

Cars Lives Matter.

dangerb407's picture

10 Horrific Sports Wardrobe Fails Matter

cbxer55's picture

Social indignity of driving around town in a three year old clunker! Really? I have a 19 year old Ford Ranger that I drive every day. It's pretty beat up, which is why I keep it, since Mother Nature can be pretty mean around these parts. Otherwise it's mechanically sound and I keep it that way. 

Also have a 13 year old Ford Lightning. Nothing indignant about driving a Lightning, I can assure you. 

Have an 11 year old motorcycle that still gets the BIG THUMBS UP every time I ride it. 

Indignant my ass. Even if it were, who cares? I certainly don't give a rat's ass what anyone thinks of my vehicles. 

Nobody For President's picture

Yeah, I flashed on the 'social indignity' meme as well, maybe depends on where you live.

My one and only set of wheels now is my 31 year old Toyota pickup, which is (ahem) a little beat up, especially on the passenger side bed, but I cleaned it up, bondoed a few dents and painted the gravel dits and dents and all last month when it became my one and only, and it don't look bad. Get compliments on it because, despite the 8 foot bed, it is small enough to be able to park easily, gets 17 miles a gallon which ain't great, but i don't go far anyhow, and has a killer low range in 4WD that gets me up my road with a big ass load without strain, year around. Plus, a lot of folks around here used to have a mid-eighties Toy, and many of them wished they still did, instead of their current monster pickup.

Probably get a 2-4 year old car later this year for trips to the city, but doubt very much I'll ever buy new again. 

The statement in the article "Unfortunately, the outlook for the used market is only expected to get worse..." does not mean worse for shoppers, and I really don't see any damn thing unfortunate about it, but that's just me.

hxc's picture

Agreed. I live in SoCal and drive a 14 year old porsche, doesn't hurt the amount of girls looking at me (and i'm only in my late twenties).

 

IMO people that buy new cars are fucken idiots. 72 month financing, ugly as sin, and these pieces of shit have more central points of failure than a rube goldberg machine. Go ahead and lose half the value of your car in a year, i fucking dare you. Dipshits

Paul E. Math's picture

One of the great things about ZH: people brag about how old and shitty their cars are.

I drive a 2004 Honda Accord so take that, bitchez!