[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?