Backup plans - what's yours?

[Bambzolbment]

Agreed, until I know I'm not getting a FL5 I wouldn't. Especially since the used car market is about to get its cheeks clapped lol.

Why do you think so? Given the scarcity of new supply the older cars are bound to still be desirable substitutes. Probably less so with increasing financing costs, but still not cheek slapped (i wish things get corrected a bit too and hope you’re right!)

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[RoidRage]

Why do you think so? Given the scarcity of new supply the older cars are bound to still be desirable substitutes. Probably less so with increasing financing costs, but still not cheek slapped (i wish things get corrected a bit too and hope you’re right!)

I've been keeping a very close eye on the RS3, M2C and similar vehicles on the used markets. The average price has dropped 5%-10% since May.

As interest rates go up, lending slows, liquidity dries up. What you see in the housing market will eventually cascade down to the auto market soon. Give it time, come this year 2023, I believe the used car market will look very different.

Scarcity is offset by inflation and increased lending costs. This is the intended action as expected by fed increasing the overnight rates, to cool the market. High end lux, is the first segment that cools.

Additionally, to the changes to housing costs, repos of assets (cars) will occur, which has already started to climb. Soon, soon.

 

[VarmintCong]

I've been keeping a very close eye on the RS3, M2C and similar vehicles on the used markets. The average price has dropped 5%-10% since May.

As interest rates go up, lending slows, liquidity dries up. What you see in the housing market will eventually cascade down to the auto market soon. Give it time, come this year 2023, I believe the used car market will look very different.

Scarcity is offset by inflation and increased lending costs. This is the intended action as expected by fed increasing the overnight rates, to cool the market. High end lux, is the first segment that cools.

Additionally, to the changes to housing costs, repos of assets (cars) will occur, which has already started to climb. Soon, soon.

A year from now, the Fed and Washington will be back to Easy Money Good Times, so any pullback in luxury goods/cars and home prices is likely to be transitory.

The problem is that things like used car prices and home prices take 12-36 months to correct, while stock and bond markets can crash in weeks, and the Fed and Washington will react very quickly to that.

On a good note, my 2020 Si is still sitting at Carmax unsold after 2 months (they're still asking $30k for a car w/ 44k miles). Same for the other 3 blue 2020 Si's - none are selling right now, but Carmax is stubbornly refusing to drop the prices.

 

[Tickle]

I've been keeping a very close eye on the RS3, M2C and similar vehicles on the used markets. The average price has dropped 5%-10% since May.

As interest rates go up, lending slows, liquidity dries up. What you see in the housing market will eventually cascade down to the auto market soon. Give it time, come this year 2023, I believe the used car market will look very different.

Scarcity is offset by inflation and increased lending costs. This is the intended action as expected by fed increasing the overnight rates, to cool the market. High end lux, is the first segment that cools.

Additionally, to the changes to housing costs, repos of assets (cars) will occur, which has already started to climb. Soon, soon.

Rates absolutely slow things down.

Slowing things things down absolutely matters but until vehicles are on lots of the threat of it...

No need to speculate here. It will require vehicles on lots.

 

[RoidRage]

A year from now, the Fed and Washington will be back to Easy Money Good Times, so any pullback in luxury goods/cars and home prices is likely to be transitory.

The problem is that things like used car prices and home prices take 12-36 months to correct, while stock and bond markets can crash in weeks, and the Fed and Washington will react very quickly to that.

Housing in my area already corrected close to 10-15% in a matter of 6 months over Feb, 2022 highs. My market is extremely sensitive to rates. Which has property values akin to LA.

 

[RoidRage]

Rates absolutely slow things down.

Slowing things things down absolutely matters but until vehicles are on lots of the threat of it...

No need to speculate here. It will require vehicles on lots.

Cars don't even have to be on lots when financing is 8.0% for 12-72 months. Borrowing at the dealerships have exploded in a matter of months here.

M2C's were selling for $90k in Feb, average is $79k-82k now in my area now

 

[Tickle]

[

Cars don't even have to be on lots when financing is 8.0% for 12-72 months. Borrowing at the dealerships have exploded in a matter of months here.

M2C's were selling for $90k in Feb, average is $79k-82k now in my area now

Lol, okay...

I can't wait until we all meet in our CTR one day.

 

[RoidRage]

[

Lol, okay...

I can't wait until we all meet in our CTR one day.

I mean .. when an FK8 LE (1 of 100) has gone from $77k CAD to $67k CAD and is still unsold over 4 months haha it's pretty telling in the largest auto market here up north. I'm not sure about you guys but cheeks getting clapped up here LOL.

But agreed hope we all get one.

 

[Tickle]

I can't speak for Canada.

Here... Rate matters... But in the end... Prime is prime. People willing to borrow outweigh the supply.

Where are you in Canada? I've wanted to visit up north.

 

[RoidRage]

I can't speak for Canada.

Here... Rate matters... But in the end... Prime is prime. People willing to borrow outweigh the supply.

Where are you in Canada? I've wanted to visit up north.

GTA (Greater Toronto Area), Ontario.

 

[TypeSiR]

I mean .. when an FK8 LE (1 of 100) has gone from $77k CAD to $67k CAD and is still unsold over 4 months haha it's pretty telling in the largest auto market here up north. I'm not sure about you guys but cheeks getting clapped up here LOL.

But agreed hope we all get one.

Dang, that’s actually quite reasonable in USD. It’s practically brand new at 5000 miles. Most US buyers probably paid more than $51K initially for the LE. This is actually a better deal than the FL5 in the long run (appreciation); mass production vs limited.

 

[VarmintCong]

Housing in my area already corrected close to 10-15% in a matter of 6 months over Feb, 2022 highs. My market is extremely sensitive to rates. Which has property values akin to LA.

I've hard Vancouver real estate took a big hit related to restrictions on Chinese taking money out of China to buy North American real estate. Dunno if that's true.

If it's down 10-15%, it's to what, early 2021 levels? At some point dropping real estate (reverse wealth effect) will start to hurt car buying, but by then, the Fed might be back to money printing.

 

[citrus]

I've hard Vancouver real estate took a big hit related to restrictions on Chinese taking money out of China to buy North American real estate. Dunno if that's true.

Not enough of a hit to drop prices, if that's what you mean (similar story here in PNW). The properties already sold are still gone. Some pressure on the supply has eased, but at the same time, demand for property from other factors hasn't, and it's not like supply was able to expand with any real speed in the last two years.

CarMax, dealers, etc. bought high and they're not exactly keen to take a loss unless they absolutely have to, market correction or not. Auto loan defaults are rising as well, but I don't expect prices to fall very dramatically in the short term yet.

 

[VarmintCong]

CarMax, dealers, etc. bought high and they're not exactly keen to take a loss unless they absolutely have to, market correction or not. Auto loan defaults are rising as well, but I don't expect prices to fall very dramatically in the short term yet.

Carmax paid me $24,600 for my 2020 Si, and put it up for $33k. They dropped it to $32k after 2 weeks, and $30k after a month. They used to target more like 10-15% profit so maybe they just haven't adjusted back to normal yet.

But you're right, they were offering $28k for my car a few months before, so they probably overpaid for some of the cars on their lots.

 

[Bambzolbment]

Carmax paid me $24,600 for my 2020 Si, and put it up for $33k. They dropped it to $32k after 2 weeks, and $30k after a month. They used to target more like 10-15% profit so maybe they just haven't adjusted back to normal yet.

But you're right, they were offering $28k for my car a few months before, so they probably overpaid for some of the cars on their lots.

Hey its called Carmax for a reason. They didn’t name themself “Carmin” now did they

Average car loan in USA is 48k, and average monthly payment is 700-something; which is insane if you compare ratio to people’s rent/mortgage.

Absolutely repo market is going to trigger supply, panic sellers will compete to lower prices, and high mileage luxury car segment for people that hold multiple vehicles will offload pricey assets first. If your debt is more than market value of car, incentive to keep paying drops…

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