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

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

Comments

Haus-Targaryen Canadian Dirtlump Tue, 08/15/2017 - 04:27 Permalink

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. 

In reply to by Canadian Dirtlump

Ray Donovan Mon, 08/14/2017 - 20:09 Permalink

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.

Conax Mon, 08/14/2017 - 20:23 Permalink

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.

cbxer55 Mon, 08/14/2017 - 20:52 Permalink

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 cbxer55 Mon, 08/14/2017 - 22:04 Permalink

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.

In reply to by cbxer55

hxc Nobody For President Mon, 08/14/2017 - 23:23 Permalink

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

In reply to by Nobody For President