Complete collapse of the used car market?

[chassis]

Today I spoke with a marina/boat dealer when ordering a repair part for an outboard engine. The guy on the phone said they have never sold so many personal watercraft (waverunners/jetskis) as this year. Generally consistent with what I saw on waterways this weekend - loaded with people and boats, enjoying the great outdoors (and spending money).

This supports the notion that a collapse in prices is unlikely for discretionary vehicles, for example high horsepower German four door models.

[NickyC]

Originally Posted by Jbrown7403

Pretty interesting site to follow:

https://www.cargurus.com/Cars/price-trends/BMW-M4-d2258

Prices are definitely going up for used M4s (all years) over the past 30 days

Yeah I noticed that just last night. Private party and trade in for my M4 went up around $3k since last time I checked (early last month or so).

Bizarro world. I'm out of the future guessing game.

[W///]

Originally Posted by chassis

Today I spoke with a marina/boat dealer when ordering a repair part for an outboard engine. The guy on the phone said they have never sold so many personal watercraft (waverunners/jetskis) as this year. Generally consistent with what I saw on waterways this weekend - loaded with people and boats, enjoying the great outdoors (and spending money).

This supports the notion that a collapse in prices is unlikely for discretionary vehicles, for example high horsepower German four door models.

Coworker bought a travel camper and told me same thing. Boats and RV's are selling like hot cakes, which makes little sense to me during these uncertain times.

I've been fortunate that Covid has not affected my pay, but I'm using this year to be very conservative with spending.

[freakystyly]

I can't speak for Americans, but here hardware stores and similar places are having a hard time keeping up with demand.

At first it was grocery stores with toilet paper, now its 2x4s

Some are stir crazy due to being cooped up inside for month(s), can't travel like they used to... etc.

I don't think the financial impact has affected many people yet outside of the service industries. I know people who are able to work from home are making bank with less expenses, and money burning a hole in their pockets.

[jeff113]

Originally Posted by NickyC

Yeah I noticed that just last night. Private party and trade in for my M4 went up around $3k since last time I checked (early last month or so).

Bizarro world. I'm out of the future guessing game.

Simple explanation - the pics of the new M4 grille were released recently.

[VChenz]

Took my bike into high end bicycle store....3 week backlog of work. The inventory that normally takes all summer to sell (and assemble) is pretty much sold out. Noticing the same online.

I assume that with everyone no being able to go out they saved money on dining and entertainment and now have a fistfull of cash to blow.

[Alfisti]

RIght but the job losses have been massive, not just entry level either. The hurt will come, it's inevitable.

[spiceyxi]

Originally Posted by VChenz

Took my bike into high end bicycle store....3 week backlog of work. The inventory that normally takes all summer to sell (and assemble) is pretty much sold out. Noticing the same online.

I assume that with everyone no being able to go out they saved money on dining and entertainment and now have a fistfull of cash to blow.

To add to the discretionary spending spike I was looking to get a racing wheel setup and everywhere seems to be essentially sold out and on backorder. I was hoping to scratch my not being able to drive for fun itch... People seem to have a lot of extra cash to spend. Probably a combination of the WFH, not being able to go to bars and restaurants, cancelled vacations and stimulus money.

We'll see if this trend continues in the future. Will this be the thing that teaches Americans to save our money? Or are we all going to blow it on impulse buys and go back to spending like normal next year.

[chassis]

Yes, agree on bikes. A month ago I called 2 dozen bike shops from Chicago to Philadelphia, and one of them had the model and color I wanted. I drove 5 hours each way (10 hours round trip) to pick it up. The bike section in Walmart has been devastated (no inventory) for months.

[Jbrown7403]

When I started my nationwide search for my “perfect” ‘16 F82 coupe last summer, there were around 800 - 900 used listings to sort through on Autotrader. Today, there are a bit over 300. Folks are definitely holding onto their rides which makes the price increase make sense

https://www.cargurus.com/Cars/price-trends/BMW-M4-d2258

[NickyC]

Originally Posted by Jbrown7403

When I started my nationwide search for my “perfect” ‘16 F82 coupe last summer, there were around 800 - 900 used listings to sort through on Autotrader. Today, there are a bit over 300. Folks are definitely holding onto their rides which makes the price increase make sense

https://www.cargurus.com/Cars/price-trends/BMW-M4-d2258

Yep, noticed that too. Carmax has even completely dried up of M4s. They only have one nationwide right now, and it's a "new arrival".

They had a beautiful 2020 M4CS with CCBs for a few days this past week. 2k miles and they only wanted $79k for it. I should have gone after it, but I'm still not ready to give up my 6MT.

They also had a crazy deal on a 2016 GT4 in red. 6k miles for $76k, before I could think too long about it though it was *poof* gone.

[RMachuca3d]

As someone else mentioned, dealers are definitively hoarding lease returns and decent tradeins, I suppose they are just waiting this covid thing out for now.

[chassis]

Either hoarding them, or selling them. The temporary hiatus of new vehicle production, and continued demand for replacement (new or used) vehicles has meant the total inventory of new+used vehicles has been depleted to some extent.

I have driven 5,000 miles in the past month, through most southeast states and several midwest states, and the number of temporary license plates/tags is very high. This means vehicles transactions are occurring.

Local M-B dealer said, "We had a great May." Meaning good sales.

Local M-B and local BMW dealers have no or thin selection of used vehicles on premises.

No meltdown or collapse in site, yet.

[R N M]

People that kept their jobs have now excess cash for the following reasons:
1) No travel
2) No sporting events
3) No gambling
4) No shows/concerts
5) No summer camp, afterschool program, various activities- piano, swimming for my kids
6) Much less eating / Drinking out

Plus much more!

People using this savings to buy cars, boats, vacation home, renovation projects etc

[Flacht3]

Originally Posted by R N M

People that kept their jobs have now excess cash for the following reasons:
1) No travel
2) No sporting events
3) No gambling
4) No shows/concerts
5) No summer camp, afterschool program, various activities- piano, swimming for my kids
6) Much less eating / Drinking out

Plus much more!

People using this savings to buy cars, boats, vacation home, renovation projects etc

The first time I read this I misunderstood because I thought you were saying people were saving money on those things and that was leading to lack of spending...then realized you meant that money is going into things like second homes, boats, projects etc. which is spot on for the wealthier folks but I think you see the same apply to shopping and more mundane goods across the board. People aren't pinching pennies right now even though they should be.

Part of the reason we haven't felt the "pain" yet is because people are still funneling money into the economy. Hell even those on unemployment are taking home MORE money than they were before with the relief. It's if/when that dries up that we may be in a world of hurt. It all depends on if we can keep making slow progress or if we're pulled backwards and are right back to square one.

[Alfisti]

Yeah if the US really does stop the $600 a week as of end of July, there will be a knock on effect.

[Flacht3]

Originally Posted by Alfisti

Yeah if the US really does stop the $600 a week as of end of July, there will be a knock on effect.

I don't disagree, but a counterargument is that some folks are slow to get back to work because the unemployment benefits are superb right now, so we may see an increase in employment rates over the next few months if:

1) The jobs are there, as things reopen
2) $600 benefit is removed, incentivizing a return to job hunting

[DarkstarZero]

Originally Posted by Flacht3

I don't disagree, but a counterargument is that some folks are slow to get back to work because the unemployment benefits are superb right now, so we may see an increase in employment rates over the next few months if:

1) The jobs are there, as things reopen
2) $600 benefit is removed, incentivizing a return to job hunting

I agree with this. I'm seeing help wanted signs around town now but why go to work when you're making more money sitting at home? There are jobs, they're just not the same jobs as everything has changed.

[DarkstarZero]

Update#5
What we're seeing now is that sports cars, offroad cars, classic cars, and otherwise 'fun' cars are in high demand and prices are up. People have nothing to do but they are allowed to drive, and driving is fun. They want fun cars. So values are on the rise.

Cars that would plummet, boring econo-boxes, soccer-mom cars, commuter cars, basically anything a rental car company would own, are artificially being held up by storing cars away. Eventually they'll be released and sold for pennies on the dollar - but given the current climate, I don't think they'll effect sports/fun car values much.

Luxury cars are an unknown. Cities being hot beds for COVID + Riots + Protests + everyone can work from home now and there's no reason to be close to the office, means there's a city exodus underway. If someone was on the fence about moving out of the city before all this, they are moving out now. This is evident by home sales going up and home builders selling out. That's a lot of people/families that didn't have a car or multiple cars and now suddenly need one or two. And that can change everything.
/Update#5

[Flacht3]

Originally Posted by DarkstarZero

Update#5 If someone was on the fence about moving out of the city before all this, they are moving out now.
/Update#5

This is more or less me. Waiting to see what working conditions will be like in a year before I pull the trigger.

Humans have a short memory and I can see office life returning in a few years. My realistic expectation is that I will still need to be near an office and go in 2-3 days a week, so will not migrate too far until I understand what that looks like.

I am grateful I own a house and have plenty of space, despite being in a major city, otherwise my desire to GTFO would be greatly accelerated.

[chassis]

Humans are social beings. In-office work won't go away, and it will likely return to something close to pre-pandemic arrangements.

How are people going to schmooze the boss? Not a bad thing, call it relationship development if that sounds better.

When will it happen? Good question.

[hellrotm]

Originally Posted by chassis

Today I spoke with a marina/boat dealer when ordering a repair part for an outboard engine. The guy on the phone said they have never sold so many personal watercraft (waverunners/jetskis) as this year. Generally consistent with what I saw on waterways this weekend - loaded with people and boats, enjoying the great outdoors (and spending money).

This supports the notion that a collapse in prices is unlikely for discretionary vehicles, for example high horsepower German four door models.

I can second this. Local marine stores are short on inventory. Marinas are packed daily with boaters.

Originally Posted by DarkstarZero

Update#5If someone was on the fence about moving out of the city before all this, they are moving out now. This is evident by home sales going up and home builders selling out. That's a lot of people/families that didn't have a car or multiple cars and now suddenly need one or two. And that can change everything.
/Update#5

Second this as well. I am in real estate, new homes sales are through the roof. They can't build them fast enough. Overall home inventory is low and prices rising. Homes in my area are selling within days. Buyers from New York and California, just had a couple fleeing Washington. I have local clients that want to upgrade and sell now, but they have no where to go.