Attention Late Model Car Shoppers

"SBA Thanks You For All The Fish" (santabarbarianlsx)
05/06/2020 at 01:59 • Filed to: None

To give one an idea how bad it’s about to get? Most of the major rental car groups are forming a line at the bankruptcy court, with Hertz apparently closest to the check-out window. TIL that a lot of their inventory is actually leased, with the leasing companies being in a big bind as the RAC companies go into arrears on their lease obligations.

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The net on this is that I’d wager a bunch of late model used cars get dumped back on the leasing companies... which, unlike aircraft leasing entities, are in a poor position to park a million used cars in the desert for a few years. I’m betting this looks like a liquidation event where 2018-19-20 model year cars get sold at a loss and moved off the books. This will put even more downside pressure on the used car market, but is also likely to result in some damn fine deals on late model used cars. Save your dry powder if you are going into the market this year. A Hertz color Shelby GT, perhaps? Or that C7 parked near the counter at LAX?

DISCUSSION (16)

pip bip - choose Corrour > SBA Thanks You For All The Fish
05/06/2020 at 02:12

keep an eye out.

might get a Nissan for next to nothing too

SBA Thanks You For All The Fish > pip bip - choose Corrour
05/06/2020 at 02:15

Oh, that’s what they sell for new... I’m expecting a “take this car, get a check” on those beige Altimas.

Jarrett - [BRZ Boi] > SBA Thanks You For All The Fish
05/06/2020 at 06:20

I was going to wait a couple years to replace the wife’s car, but this seems like a unique opportunity. I’ll be keeping watch.

functionoverfashion > SBA Thanks You For All The Fish
05/06/2020 at 06:53

If they’ve got any manual bmw wagons I’m in.

Maxima Speed > pip bip - choose Corrour
05/06/2020 at 06:58

Versa’s will be a mandatory “two for the price of free”.

BrianGriffin thinks “reliable” is just a state of mind > SBA Thanks You For All The Fish
05/06/2020 at 07:57

Wonder who is going to be the one selling these cars, though. The rental off-lease cars usually go to auction - which means other dealerships are really going to be the ones selling them. Are these dealers at a place where they’ll be willing to offer fire-sale pricing, or will they keep the used car prices relatively high in order to try to make up the difference in profit?

Some rental agencies have consumer used car lots (I’m thinking Enterprise and Hertz), but that’s a small fraction of their total vehicle holdings. I wouldn’t automatically assume that the cars being turned back to the leasing companies is going to result in a half-off Malibu, and certainly not a well-priced GT500 or C7.

My bird IS the word > SBA Thanks You For All The Fish
05/06/2020 at 08:10

The question is, where will these be sold through?

I hope I am in a better financial situation next global market crash...

Snuze: Needs another Swede > SBA Thanks You For All The Fish
05/06/2020 at 09:20

I dont know that rental companies would have anything I want, but if it puts downward pressure on the used car market it might make other things more affordable. I guess I’ll just have to wait and see.

Neil drives a beetle and a fancy beetle > BrianGriffin thinks “reliable” is just a state of mind
05/06/2020 at 09:37

Well; you could be right that they’ll sell through other channels and get adjusted. For the less common cars- say a GT500- the price probably won’t be effected. But if every dealer in town all of a sudden has 5 x 2019 Nissan Altimas with 20,000 miles in base spec; that will have an impact on those cars prices.

SBA Thanks You For All The Fish > Neil drives a beetle and a fancy beetle
05/06/2020 at 12:39

Yeah, that was the point I was going for. It’s just a helluva lotta cars to be dumped into an “already soft” market-- I can’t imagine the leasing companies will keep them on their books. It’d be like “holding a few containers of bananas, hoping the price will be better in two years”.

SBA Thanks You For All The Fish > BrianGriffin thinks “reliable” is just a state of mind
05/06/2020 at 12:40

Assume they’ll be liquidated into the auction system-- and dealers could buy through that channel to add to stocks. But it’ll be interesting tension, since the used car market is already pretty soft.

SBA Thanks You For All The Fish > My bird IS the word
05/06/2020 at 12:50

Yeah, cash is king for the moment. I’d guard it zealously.

I’m assuming these go back to the leasing companies, who then decide it’s better to liquidate the ripe bananas rather than hope they’ll be worth more in a year... So, ultimately “some” end up on Hertz and Enterprise retail lots, but “most” end up in the auction system, swamping an already swamped used car market.

TheD0k_2many toys 2little time > SBA Thanks You For All The Fish
05/06/2020 at 12:57

Hmmmm. Might need to watch for something with a Coyote in it

SBA Thanks You For All The Fish > TheD0k_2many toys 2little time
05/06/2020 at 13:23

Yeah. Exactly. Not EVERYTHING on the Hertz lot is a beige Altima... The Premium Group had a lot of Mustangs, Tahoes and nicer cars.

It wouldn’t surprise me to see come Coyotes running loose.

My bird IS the word > SBA Thanks You For All The Fish
05/06/2020 at 14:07

Ugh so the only people who have acess to the dealer auctions, who are coincidentally dealers who have no money, will get their hands on these.

SBA Thanks You For All The Fish > My bird IS the word
05/06/2020 at 15:38

I’d keep an eye on the retail lots. The “better” stock is likely to go there.