Trade In Value Plummet of Death

[OhioJeeper]

Curious, I checked the value on my '21 2dr rubi with 27K. (MSRP about 48K, pd 44k) They want to give $34.5K, not surprising.

Carvana makes their money not on actual car sales, but on selling the subprime debt on financed car sales. The company was set up to specifically benefit the early shareholders (The son and father), no so much anyone else. That said, the used market seems to be softening, new prices will only get worse. We refreshed the family fleet in Mar '21 - glad I'm out of the car market for the forseeable future.

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[CT_LFC]

I don’t know what you people are talking about. Just watched the news, inflation was transitory a year ago and is no problem. The economy is booming. Gas is going down, Everything is going great. Where do you people get this stuff. Prices on cars and houses are going up from here. Better buy everything right now and beat the rush.

Good news is since the inflation reduction act is in effect inflation will be back to pre-pandemic levels any time now.......surprised it hasn't already to be honest

The housing market is in the early stages of a correction with rates now hovering around 7% making affordability a huge problem and pricing many out of a house and others choosing to wait.

January of this year Vroom was offering me $53K for my JLUR and now it's under $40K last time i submitted for an offer. Crazy times ahead.

 

[The Last Cowboy]

Sad thing is that all of those who kept “trading up” and bragging about having the same, or a slightly lower payment are going to be so completely upside down that they will be stuck for years in what they have. It’s not about payments, it’s about the amount of debt (how much you owe).

 

[zrickety]

Sad thing is that all of those who kept “trading up” and bragging about having the same, or a slightly lower payment are going to be so completely upside down that they will be stuck for years in what they have. It’s not about payments, it’s about the amount of debt (how much you owe).

I keep thinking about Bronco buyers that paid $30k over sticker...they are going to be upside down for 20 years.

 

[TheNewGuy]

I keep thinking about Bronco buyers that paid $30k over sticker...they are going to be upside down for 20 years.

They'll just roll it into their next $1000/month payment lol

 

[five9dak]

You bought a $30,500 2 door jeep with $33k in options. Of course you're going to get hosed as soon as it drives off the lot.

Base Jeeps keep their value the best proportionally. The rubi's just have high absolute resale values.

 

[Hennessey17]

You're comparing a brand new vehicle to a used one?

I paid $36K for mine... I've been offered as high as $42K... right now I could get $39K... but mine is a base Sport.

Mine is a '21 with 10.5K miles on it.

 

[Dyolfknip74]

I paid $36K for mine... I've been offered as high as $42K... right now I could get $39K... but mine is a base Sport.

Mine is a '21 with 10.5K miles on it.

Ok.

 

[Hennessey17]

Ok.

???

 

[JPThing2]

???

Plug it into Vroom to see. Doubt it, but the good news is, with a Sport your hit won't be as bad as highly optioned versions. I am picking up a new base Willys shortly and driving to Maryland to get the best deal as locals were thousands off. I've bought and sold cars my whole life (too many to count). I don't expect to gain on the Willys, but instead minimize depreciation. Cars go down in value. Bizzaro World of the last few years is ending.

 

[JPThing2]

Many of us have discussed the bizarre “covid retail market” of the last few years and repeatedly reminded younger folks that the market conditions we’ve been experiencing couldn’t and wouldn’t last.

In other threads younger folks have urged buying new and turning/trading their jeeps in 12 to 18 months as a strategy for getting ahead. They’ve suggested that because they got away with fortunate timing once or twice others could do the same, but old goats like me cautioned that it’s a very bad plan to assume you can continue to pay near MSRP for Jeeps and expect to get what you paid (or more) a year or two later.

What we’re seeing now is a gradual return to historical norms. We’re not there yet, but you can see the writing on the wall. If you think the resale/trade numbers are bad now, just wait until inflation persists, fuel prices climb another dollar per gallon, mortgage interest rates are at 8%, and dealer inventories are restored to former levels. When new sales soften enough we’ll see the return of cash rebates and subsidized interest rates on new Jeeps. You’ll also be able to buy at or below invoice, and that combination of influences will hammer the used market values, as it always has in the past. (The same will be true of Toyota and other SUV and truck brands. In 2008-09 we had a bunch of car dealers putting signs in front of their lots saying “Not accepting trucks and SUVs in trade”. I went to one of them and bought a loaded one year old GMC Yukon with 13,000 miles on it for $24,000, which was less than HALF of the monroni sticker.)

I’ve been buying Jeeps, cars, trucks, motorcycles, boats, and RVs for more than 45 years. With the exception of boats and RVs, which have always depreciated much more quickly, it’s usually been safe to assume that if you buy “right”, and its a reasonably durable, popular vehicle, you can expect your new vehicle to depreciate about 20% the day you drive it off the lot. (Or 30% if it’s an American luxury SUV.) Of course, many variables can push that percentage one way or the other, including extraordinary supply and demand pressure, the presence of factory rebates, and climbing fuel prices, but the crazy market we’ve experienced over the last four years is unlike anything I’ve ever seen. Supply was suppressed and people were spending like drunken sailors, so prices remained crazy-high.

The summer before last we sold our 16 year old boat, which should have depreciated about $25,000, for $1,500 more than it cost new. Based on the number of cash offers we got within a day of posting the ad, I should have asked much more. Four months ago our 3.5 year old Tiffin motorhome, which would normally have depreciated by about $60,000, sold for $42,000 more than it cost new. That’s nuts! I doubt we’ll ever see anything like that market again.

March discussion of Jeep value/pricing

Spot on post! Someone who clearly understands the car market.

Also, anyone looking at interest rates shouldn't be buying new cars. Some folks won't like hearing that, but it's the harsh truth.

 

[Dyolfknip74]

???

Lol, you quoted me, I just responded.

 

[Hennessey17]

Plug it into Vroom to see. Doubt it, but the good news is, with a Sport your hit won't be as bad as highly optioned versions. I am picking up a new base Willys shortly and driving to Maryland to get the best deal as locals were thousands off. I've bought and sold cars my whole life (too many to count). I don't expect to gain on the Willys, but instead minimize depreciation. Cars go down in value. Bizzaro World of the last few years is ending.

I'm in SE Wisconsin. The market is weird around here. There are a lot of dealers with 25% full or less lots, and many people around here wont travel more than 15 miles from their house... they certainly won't go down to Chicago to look for a better deal. I totally get that the bubble is bursting, but the Midwest is also usually the most stable place.... very slow to react.

 

[Hennessey17]

Lol, you quoted me, I just responded.

carry on...

 

[JPThing2]

I'm in SE Wisconsin. The market is weird around here. There are a lot of dealers with 25% full or less lots, and many people around here wont travel more than 15 miles from their house... they certainly won't go down to Chicago to look for a better deal. I totally get that the bubble is bursting, but the Midwest is also usually the most stable place.... very slow to react.

OK.

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