[dylan604]

> I think the used market in general is so bad right now

I'm in the same boat, only I've never owned a used car after the one my parents gave me as my first car. But after going through several new cars, I thought I would try the used market. All I'm seeing are not good deals that makes me wonder why anyone would take a 5-10 year old car for not enough of a difference from new to risk the maintenance.

All of these high prices just feels really really artificial to me. I've been around enough dealership owners that it just feels exactly like what they would do. If there was ever a real reason to explain the way the prices shot up, there's no way the dealers were just going to leave money on the table by lower their prices.

[AnthonyMouse]

COVID interrupted the supply chains for new cars, forcing people who normally wouldn't to buy used cars, which spiked the price of used cars. This is likely to be temporary because, of course, high used car prices will encourage more people to buy new cars now that they're available again, which will in turn ultimately lower the price of used cars by increasing supply. But first the new cars have to get old enough to become used cars.

[dylan604]

Leased cars are old enough after 12-24 months. We're far enough in for the 3rd generation of that to have been sold. Twenty four months is also long enough for newer rental cars to come on the market.

My position is that this temporary is being extended because of greedy dealership owners feel like they can vs a lack of inventory. This is based on precedence of the banks not releasing all of the foreclosed properties they still own after the '08 meltdown. Also, I've been to events sponsored by car manufactures rewarding their top dealership owners. There's fewer of them than people would think as these larger owners own multiple dealerships across the country. They absolutely have the opportunity to "talk amongst themselves" while conveniently in the same place to discuss this.

[AnthonyMouse]

The theory that dealers are going to sit on inventory to keep prices high would have to assume that they're fools.

The banks sat on the properties because they knew the government was going to lower interest rates and otherwise cause the value of the properties to increase from their post-crash low.

For dealerships to keep prices high they would have to purposely sell fewer cars. But selling more cars for high prices is the reason they want prices to stay high -- all they'd be doing is giving the high price sale to another seller. Meanwhile they're paying to store inventory and paying interest on the borrowed money they used to buy it, or foregoing alternate investment returns if it's their own money. Only to continue holding something they could sell for high prices now so that they can wait until the prices come down and sell it for a lower price later?

[jjav]

> makes me wonder why anyone would take a 5-10 year old car for not enough of a difference from new

Here is one reason: New cars are riddled with phone-home spyware. Cars from 10 to 15 years old today are the sweet spot of having everything as modern as you really need, but none of the bad things.

While I'd like to get a good deal on those used cars, I would pay more for them than for a new car if need be. Unless some manufacturer starts building simple cars again, I'm never buying a new car and will keep looking for cars from ~2000 to ~2015 forever.

[thegrim33]

I mean, there's only two possibilities:

1) There's a grand conspiracy between all the dealerships in the country where they've all secretly formed a cartel together and have all agreed to all abide by the same artificially high prices.

or

2) There's legitimate economic reasons for prices to be high. If there wasn't, then any single dealership could simply lower their artificially high prices and then make more profit by stealing all the customers away from their competitors and increasing their sales.

[caslon]

Dealerships are essentially cartels already. There's a reason it's illegal for manufacturers to directly sell vehicles, and it's not because the consumers don't want it. It's not because the manufacturers don't want it. What does that leave you?

[nradov]

Most manufacturers don't want to own dealerships. They don't see it as an efficient use of capital.