Car Values Rising Or Am I Losing My Mind ?

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Fillmore
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Car Values Rising Or Am I Losing My Mind ?

Post by Fillmore »

The first teen (13-19th) Saturday in May and November I go over my financial picture.

I calculate assets (based on Friday's closes) vs. liabilities and also my monthly living costs.

I take the value of my rental property from realtor.com
All my retirement accounts, my individual stocks, I-Bonds etc.
My car value from KBB, I take the mId number from trade in value and private party sale.
I don't include what's in checking and emergency fund or credit card debt that I pay in full (on the liability side).

I don't drive much because most of my driving is done in a company vehicle.

I bought a Chevy Cruze (I'm not a big car guy lol) in Nov 2018.

It was a brand new left over (2018) and a discontinued model, the sticker was 22K and I got it at 17K.

Low miles (10,171) but KBB has the trade value at 17,344 and the private sale value at 19,673. I know we live in strange times but can this be accurate ?
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RickBoglehead
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by RickBoglehead »

Fillmore wrote: Sat May 15, 2021 7:39 am The first teen (13-19th) Saturday in May and November I go over my financial picture.

I calculate assets (based on Friday's closes) vs. liabilities and also my monthly living costs.

I take the value of my rental property from realtor.com
All my retirement accounts, my individual stocks, I-Bonds etc.
My car value from KBB, I take the mId number from trade in value and private party sale.
I don't include what's in checking and emergency fund or credit card debt that I pay in full (on the liability side).

I don't drive much because most of my driving is done in a company vehicle.

I bought a Chevy Cruze (I'm not a big car guy lol) in Nov 2018.

It was a brand new left over (2018) and a discontinued model, the sticker was 22K and I got it at 17K.

Low miles (10,171) but KBB has the trade value at 17,344 and the private sale value at 19,673. I know we live in strange times but can this be accurate ?
I guess you're not watching the news or reading newspapers?

There is a huge chip shortage, which has caused well over 100,000 new vehicles to be made and sit in lots outside and near factories waiting for chips.
There is a shortage of components to make cars, especially resins.
Dealers have a fraction of the vehicles on their lots that they did a year ago.
Therefore, used car prices have skyrocketed. My 2018 Fusion Energi has a value above what I paid for it... On 12/31/20, my 2013 F-150 with just under 45,000 miles had a KBB value of $24,154 private sale. Today it has a value with just over 45,000 miles of $26,498, with a range up to $28,537. I paid in the low $30s over 7 years ago.

My 2018 comes off lease in September. I may just buy it out early (wife's job finishes in mid-June) in early July and sell it privately, may make $8 - $10K profit over lease buyout value. In late January it had a KBB value of $18,263, today it is $5,000 higher. Lease payments plus lease buyout = $25,275. Private party is $23,293, tops out at $24,949. At worst my cost for 3 y ears would be $2,000.

Two recent stories, but this has been building up for months.

WSJ, 5/13/21 - Empty Lots, Angry Customers: Chip Crisis Throws Wrench Into Car Business
Car makers have cut production of 1.2 million vehicles in North America because of a shortage of computer chips, losing sales amid high demand

"Shortages are stoking an already hot used-car market. Dealership service managers are begging customers to trade in their cars to beef up used-car inventories, one way to offset the new-car deficit.

A used pickup truck sold for 78% more in April than a comparable truck a year earlier, according to auction site Manheim.

This should be a boon for car owners like Zerin Dube. He recently looked into replacing his Jeep Wrangler and found used-car retailers Carvana and Vroom were willing to pay him slightly more than the roughly $50,000 he paid for it three years ago. The trouble is finding a replacement."


CBS News, 5/13/21 - Hot market for used cars sends prices to "bizarre" levels

"The main factor pushing up used car prices in recent weeks is scarcity, according to Edmunds' Caldwell, who said nearly all of the regular sources of used cars have been disrupted by the pandemic. Fewer new car sales in the past year means fewer trade-ins. People are extending their leases. Rental car companies, normally a reliable source of used cars, are instead buying used cars themselves in order to rebuild their fleets that were sold off last year as business travel and tourism came to a halt.

On top of all that, a microchip shortage has slowed the production of new cars, sending more would-be buyers to the used car market."
Last edited by RickBoglehead on Sat May 15, 2021 7:59 am, edited 1 time in total.
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Johnny Thinwallet
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by Johnny Thinwallet »

Our 2017 Accord that we bought new in 2017 that my wife drives shows the same thing on KBB. The private party value midpoint on KBB is right at $20k, and the trade-in value midpoint is $17,400. We paid $18,900 when we bought the car new.

Our other car is my 2007 Accord that I also bought new way back in 2007. Midpoint of the private party value range is $5,500, and I probably could sell the car for close to that amount right now as supposedly the used car market for Hondas/Toyotas is on fire.

Interestingly, I just visited the Honda dealership near me for an oil change last week and I was immediately blown away by seeing that their lot is half empty. This is a big time volume dealer in our area, and they're known for having scores of Hondas on their lot at any given time in most any trim option. But not right now. Their selection of new Accords - which is usually fantastic - was less than half what it typically is. And what they did have was mostly Hybrids.
Litfury
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by Litfury »

Lots of car forums are talking about this exact same thing. This is a phenomenal time to unload a used car if you don’t need another immediately. In fact I just sold my 2020 Gladiator Rubicon which I bought used for 2 grand more than I paid for it including fees. I’m ordering a brand new one from one of the large volume dealers that will discount 6-8% below invoice. My brand new rubicon comes in at 600 less than the used one I just sold. Just have to wait on it patiently now.
runner3081
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by runner3081 »

Yes, absolutely rising.

My car is getting to end of life and I have been looking extensively, it is ugly out there for buyers.

One data point.

Bought my wife's car in 11/2019, 2012 Nissan Versa with 65K miles for 7K out the door.

Same dealer, just listed yesterday was a 2012 Nissan Versa with 66K miles for 9.2K out the door. Same trim line and in worse shape.

Sure, they may not sell it for that, but it wouldn't surprise me one bit.

Also, another data point. My buddy is buying a brand new Jeep truck (whatever they are called). He has a 10-year old Call of Duty Wrangler, currently, with 68k miles. He paid 43K for that Jeep when new, 10- years ago. He just sold it, private party for 38K last weekend.
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ClevrChico
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by ClevrChico »

See, ordinary cars can be an investment! :mrgreen: :mrgreen: :mrgreen:

I live near a huge dealer, and their inventory is so thinned out, they are taking the opportunity to repave their lot.
bgf
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by bgf »

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SquirrelEater
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by SquirrelEater »

Caravana offering 17% more for my 2017 car than what I paid for it.


I was told months ago that new pickup trucks are selling higher than MSRP.
New Providence
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by New Providence »

I don't include my cars when thinking about my financial picture. If it was a business with heavy equipment I would.

I own my cars, but write-off their value as part of my net-worth. I have expensive bicycles too, not included either.
Carguy85
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by Carguy85 »

I bought my Tundra last June new for $5k under msrp no haggle necessary and now msrp is a great deal if you can find one...the dealer internet sales guy said he’s seen several dealers out west listing these $5-10k OVER msrp....I’ve seen several private party listings where a used 2-3 year old truck is listed for more than it cost new
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dziuniek
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by dziuniek »

My best performing asset year-to-date is a Used 2018 MAzda CX-9 (grand touring) we bought at the beginning of April.

Paid $28,700

KBB: $32k-ish.

Lol.
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BruDude
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by BruDude »

I am selling my 2018 Wrangler with 26k miles to Vroom for $36.8k. I paid $34k for it brand new and the sticker price was $38k.

I just sold my 2009 911 for $12k more than I paid for it 8 months ago.

The used car market is nuts. From econobox cars all the way up to exotics, prices are up 15-30% across the board. I have seen the 911 GT3 touring and GT3RS market explode $50-80k over the last few months. Ferrari 458 market up $30-60k. Wranglers are up 20%. Tellurides and Palisades still selling for $5-10k over sticker many places. It’s all nuts.
Tingting1013
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by Tingting1013 »

KBB value doesn’t tell you much. Get a quote from Carvana or CarMax
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RickBoglehead
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by RickBoglehead »

Tingting1013 wrote: Sat May 15, 2021 10:07 am KBB value doesn’t tell you much. Get a quote from Carvana or CarMax
Don't agree. KBB and Edmunds provide what you can get on a private sale. Carvana and CarMax are paying you trade-in prices. Sure, you can be done quick, but you're giving up in some cases thousands of dollars.
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Tingting1013
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by Tingting1013 »

RickBoglehead wrote: Sat May 15, 2021 3:07 pm
Tingting1013 wrote: Sat May 15, 2021 10:07 am KBB value doesn’t tell you much. Get a quote from Carvana or CarMax
Don't agree. KBB and Edmunds provide what you can get on a private sale. Carvana and CarMax are paying you trade-in prices. Sure, you can be done quick, but you're giving up in some cases thousands of dollars.
If you want to know private party price just look at what dealers are listing used cars for on CarGurus or CarMax.

At least those are real world prices. KBB is just a fiction.
marshall
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by marshall »

If you are coming to the end of a lease, it's a good idea to check on the value before turning the vehicle back in. I have a family member who sold her car to one of the major car buying services instead of returning the car. This was a relatively common commuter car but she walked away with a $6,500 check. I was blown away.
Tingting1013
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by Tingting1013 »

marshall wrote: Mon May 24, 2021 11:55 pm If you are coming to the end of a lease, it's a good idea to check on the value before turning the vehicle back in. I have a family member who sold her car to one of the major car buying services instead of returning the car. This was a relatively common commuter car but she walked away with a $6,500 check. I was blown away.
Lease financing companies are getting wise to this and started banning third party sales of their leased vehicles
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Petrocelli
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by Petrocelli »

Yes. Used car values are going crazy due to lack of inventory. Examples:

1. My wife's lease for her 2018 Audi Q3 just ended. We bought it for $21,000 at the end of the lease. That's what Audi thought it would be worth. However, it's selling for around $25,000 on the open market.

2. I leased my 2019 MBZ C300 Coupe based on a sales price of $44,000 almost 2 years ago. That same car is being advertised for sale for around $40,000.
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rascott
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by rascott »

Yep.... bought a used 2018 Sienna in early March....similar vans (if you can even find them) are now selling for $3-6k more just two months later.
adamthesmythe
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by adamthesmythe »

1. Yes, it can be right.

2. Does it matter? Do you need to sell your car to realize cash?

3. Don't worry, the value will go back down soon.
PowderDay9
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by PowderDay9 »

I just looked at the prices of the year and model of our current cars and was surprised how much they were asking for them. I roughly track the value once a year in January and the prices have gone up about 20-30% since then.
psteinx
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by psteinx »

Does anyone have a feel for how much a well negotiated NEW car, in the $20K range (i.e. Honda Civic & similar) is elevated, pricewise, compared to more typical (say, 2019) levels?

i.e. My guess is that 2 years ago, one might once have expected a well negotiated price of ~ 8-12% off MSRP, OTD, but before taxes and fees on this kind of car. Are things at ~MSRP (i.e. 0% discount) or what now?

And if it's some kind of chip shortage/supply & manufacturing issues/elevated demand, what's a reasonable timeframe estimate of something closer to *normal* (say, 2/3 of the way back to normal)?

(All else equal, I'd probably be buying a new car in August, but have some timing flexibility.)
livesoft
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by livesoft »

psteinx wrote: Tue May 25, 2021 11:34 am Does anyone have a feel for how much a well negotiated NEW car, in the $20K range (i.e. Honda Civic & similar) is elevated, pricewise, compared to more typical (say, 2019) levels?

i.e. My guess is that 2 years ago, one might once have expected a well negotiated price of ~ 8-12% off MSRP, OTD, but before taxes and fees on this kind of car. Are things at ~MSRP (i.e. 0% discount) or what now?
Don't know about $20K car, but last week a MSRP $32,130 top-5 selling vehicle in a popular color (white) sells for about 8% to 10% less than that plus sales tax, but including ALL other fees and taxes.
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psteinx
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by psteinx »

livesoft wrote: Tue May 25, 2021 11:45 am Don't know about $20K car, but last week a MSRP $32,130 top-5 selling vehicle sells for about 8% to 10% less than that plus sales tax, but including ALL other fees and taxes.
OK thanks - that's not bad at all...
av111
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by av111 »

Tempted to sell 2011 Sienna xle .. Carvana is offering 13k. Used to be 8k last year
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by iamlucky13 »

SquirrelEater wrote: Sat May 15, 2021 8:33 am Caravana offering 17% more for my 2017 car than what I paid for it.


I was told months ago that new pickup trucks are selling higher than MSRP.
Not just pickups. Of 3 dealers I contacted for pricing on Honda Civics, 2 would not offer better than MSRP, and the 3rd was around $1,000 above MSRP. They would not discuss lower prices. This was in February or March. There was another jump in prices since then.

I was thinking at the start of the year that I would wait a year or two before buying, but an issue came up on my current car. Considering the options of paying to fix issues that would not fully be paid back in resale value and hoping prices come down in the near future (and hoping Honda didn't eliminate the configuration I wanted from their lineup, which they did), or paying a premium to buy now, I ended up paying basically full MSRP for a very lightly used car. This would have driven me crazy in normal times, but my shopping experience confirmed KBB's indication it was a good deal.

Now, 2 months later, even though I was too late to avoid the first jump in prices, KBB says I could trade in my car for basically what I paid, including tax, and I could sell private party for a profit.

In contrast, when I was starting to evaluate my options a year ago, shortly after my state's stay-at-home order ended, I was seeing Ford Ranger XLT's listed for $7,000 below MSRP. I decided not to go with a pickup, so I didn't try negotiating even further, but I had the impression Ford and the dealers both were trying anything they could at that point to convert their inventory into cash.
cutterinnj
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Re: Car Values Rising Or Am I Losing My Mind ?

Post by cutterinnj »

You're not going crazy.
Bought my Lexus ES350 with 35k miles on it for 23k November 2017. Checked KBB, now with almost 90k miles on it, valued around 19k. Cheapest ownership I have seen!

Of course, I won't be selling for another 10 years, at which point I assume it will be work 2-3k.
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