Thoughts on the Car Market

"Snuze: Needs another Swede" (markg) 10/23/2020 at 13:05 • Filed to: None

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What are Oppos thoughts on the current state of affairs regarding new and used cars? I recently did a lot of work travel, made some good OT, have saved a bunch, and decided it’s finally time to replace the Cruze. I don’t know exactly what I want yet, but I have a few ideas, and it will probably something lightly used (2016+, <50k miles).

I’ve actually been itching for a new car for a couple years , so I’ve done some periodic browsing and I have some ideas on where pricing should be. This will come as no shock to anyone paying attention, but most used car prices are about 10-20% above where they were this time last year. (Thankfully this hasn’t affected janky old Volvos, one of my favorite used car segments ).

The main reason for this is COVID, and it ha s had tw o key impacts. It has affected production, from low tier suppliers all the way up to OEMs, meaning the supply of new cars for this year has been reduced. With fewer new cars to choose from, buyers are turning towards slightly used cars. The other factor has been a glut of buyers who were formerly public transportation users, as well as folks escapin g from the cities to the suburbs who suddenly find themselves in need of a car. All this buying pressure has kept new car supplies tight and inflated used car prices to balance supply and demand .

So my question is, where do things go from here? I have a few thoughts. First, I think we’re probably approaching an equilibrium point regarding those who have left the cities, who have eschewed public transportation, etc. I suspect that means, best case (for humanity), used car prices will settle down to pre-pandemic levels once demand has been satiated.

But the more I look at the situation, the more I’m worried that we are standing on the precipice of another 2008-style bubble. In addition to the inflated car market, housing prices have been skyrocketing. Homes in my neighborhood have increased 20% since we bought ours 3 years ago, with most of that increase coming in the last 6 or so months . I think the total recovery in the wake of the pandemic is sluggish (yes the stock market is good, but it isn’t the only indicator of economic health) and we are one bad resurgence away from seeing the bubble pop.

The more I think about it, the more I’m content to wait a bit and see what happens before I make any major purchases. In fact, I’m contemplating selling the Cruze since it’s probably at peak value in the given economic climate. The 850 will become my daily driver since it’s probably at the bottom of it’s value curve and existing in that weird middle ground of be not being old or rare enough to be a classic, but too old for most normal people to consider buying as a DD . So I’ll extract the value from the Cruze, put the money in the bank and wait to see where the dust settles.  

What does Oppo think? Anyone forging ahead with car purchases? Anyone waiting? What do you think will happen in the near future? Meteor strike? Apocalypse? Ford re-introduces the Tempo?

rctothefuture > Snuze: Needs another Swede 10/23/2020 at 13:26

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Good time to sell, bad time to buy. My wife’s Renegade is worth about 2 grand more than what she owes and she’s wanting to make my 4Runner her daily this winter. Clears our debts for an uncertain future and allows her to save for a down payment on a new Bronco/Ram/Defender in the future as she’s expressed.

dogisbadob > Snuze: Needs another Swede 10/23/2020 at 13:31

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If you do need another car, the 13-17 Accord is a great choice. Very easy to work on for a modern car, lots of space, great gas mileage, cool car.

Your plan seems like a good idea if the 850 is decently reliable and isn’ t full of rust and problems. If your older car was Japanese you’d have no problem, but I don’t know how good older non-240 Volvos are.

loki03xlh > Snuze: Needs another Swede 10/23/2020 at 13:32

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The used truck market is nuts. I’ve been looking for a ‘99- 07 Silverado/Sie rra to replace my dead S10. Prices have gone up 30-40% around here in the past 6 months. A correction is due in the auto market and the housing market. Once the moratoriums on evictions, foreclosures and repossessions end , supply will outpace demand. I’ m going to try and hold off buying another truck until the middle of next year.

412GTI > Snuze: Needs another Swede 10/23/2020 at 13:32

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I work for a dealer and can say at least in my market, it’s finally beginning to soften. Sales have been down this month compared to last. Blame it on the election, pandemic or whatever, I don’t many will be having a record October sales month.

With that used car prices are creeping down a bit. However, we are still working with limited New Car inventory so I don’t believe it will fully adjust back to pre-covid price levels.

My advice is to look at the market on whatever vehicle you’re looking to purchase. Not everything is affected and some used units are still at normal, pre-covid prices.

Dr. Zoidberg - RIP Oppo > Snuze: Needs another Swede 10/23/2020 at 13:34

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Bad time to buy anything interesting or 4x4. I should just be grateful for having multiple reliable vehicles in the meantime 

412GTI > loki03xlh 10/23/2020 at 13:34

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Truck prices are very stupid right now, but too be fair a non beat, semi new truck will always demand some what of a premium.

Beefchips > Snuze: Needs another Swede 10/23/2020 at 13:35

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I’ve never been much of a fan of trying to time the market personally. So I’m in the market for a used car right now. But my situation is a little different I guess, I’m just looking to swap out my car for something new and different but at about the same price point.  

BaconSandwich is tasty. > Snuze: Needs another Swede 10/23/2020 at 13:36

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I say wait before buying. I think you may be right about things getting worse before they get better.

Selling the Cruze might not be a bad idea, provided the 850 is reliable enough that you can use it as a daily driver. Selling the Cruze, only to have the 850 break down, and you suddenly needing another vehicle might end up as a net loss.

camarov6rs > Snuze: Needs another Swede 10/23/2020 at 13:39

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If we have to do  rolling or strategic shutdowns that slow/stop production again then this will continue for some time. If we can keep the new cars churning then I feel mid 2021 for things to be back with prepandemic, assuming no mass changes in demographic and buying thought process

Textured Soy Protein > Snuze: Needs another Swede 10/23/2020 at 13:39

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Housing is going up because of your specific location. Not a national trend.

I bought a car recently because I had a basketcase of a car I wanted to get rid of and was unlikely to sell privately. The car I wanted to trade it in for was only available with certain features brand new and the price wasn’t going to be artificially inflated by covid, but my trade value was. So it made sense.

P.S. if anything the commercial real estate market is what’s going to kill the economy.

Just Jeepin' > Snuze: Needs another Swede 10/23/2020 at 13:45

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I think I’m going to buy something, but given my track record both recently and over my lifetime (I’ve only bought 5 vehicles in 30 years of adulthood ) , it sure seems unlikely.

Don’t let that deter you from checking out the XJ though! (Still no reply from the seller.)

For Sweden > Snuze: Needs another Swede 10/23/2020 at 13:52

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I just bought an electric bicycle so yolo

AestheticsInMotion > Snuze: Needs another Swede 10/23/2020 at 13:56

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I’m definitely waiting. Used car (and motorcycle!) market is insane. Stock is nonexistent, prices are in the stratosphere... The only move I’ve considered is selling the motorcycle and going the bicycle route, just to simplify my life and cash in on what may be the best seller’s market in a long time.

MUSASHI66 > Snuze: Needs another Swede 10/23/2020 at 13:57

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Great time to sell, not good time to buy slightly used. We bought two cars month-ish ago, but not because the deals were super awesome, more because we found an Abarth (almost nine for sale 2018+ manual) and a low mileage RDX with gray interior which is rarer than hens teeth.

Rusty Vandura - www.tinyurl.com/keepoppo > Snuze: Needs another Swede 10/23/2020 at 13:57

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I have a 2010 Crown Victoria Police Interceptor I’ll sell you at Oppo discount. 43k miles...

notsomethingstructural > Snuze: Needs another Swede 10/23/2020 at 14:07

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The main issue with used inventory right now is it’s terrible cars at normal prices. October is usually a decent sales month too. There are still good cars out there at reasonable prices (think ones that have been on the lot for a while) , but be prepared to look two or three times as hard for them as years past. I think if I really wanted or needed to upgrade I would (and in fact I recently did) , but if it was something where I was hoping for an easy turnkey upgrade process  I would wait.

Who is the Leader - 404 / Blog No Longer Available > Snuze: Needs another Swede 10/23/2020 at 14:13

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I will now be the only remaining Cruze owner on Oppo, and soon to be an ex Cruze owner at that. Long live GM’s most competitive compact car ever!

That said, I am very much in support of you selling it. It makes sense from an economic standpoint. You’re selling a car that has suddenly had a temporary increase in value to drive a car that is probably about as reliable given yours has the 1.4 turbo (RIP) and has had little fluctuation in value until car prices stabilize.

What are you thinking for the long term replacement ? If you can find a manual diesel Cruze hatch. . . . . gotta represent.

Highlander-Datsuns are Forever > Snuze: Needs another Swede 10/23/2020 at 14:14

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I think prices are high right now due to the supply shortage. I would not buy right now. I think it will go back to normal or get depressed this spring next summer as the economy takes a major shit. That being said if you can sell right now that would be a good thing. 

My bird IS the word > Snuze: Needs another Swede 10/23/2020 at 14:23

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Might want to wait. That “bubble” could prove to be the whole damn economy.

ZHP Sparky, the 5th > Snuze: Needs another Swede 10/23/2020 at 15:07

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If you were having to sell and replace the car, probably not the best time given the market conditions you cited. But since you’re considering selling and just staying put for a bit since you have the 850 you could use that sounds like a pretty great option.

Getting top dollar for the Cruze, and wait out the market for it to normalize again (or for shit to hit the fan) to decide on what to do next. AS long as the 850 is reliable enough and suits your needs sounds like a great option.

I’m considering doing the same  - we have 3 cars and nowhere to go. Feel stupid paying for my Bolt lease, even though I got a great deal on it. Think I’ll be able to sell it to Vroom and have the lease closed out and still come out slightly ahead/even. Saving those extra bucks sounds like a nice deal right now, and the E46 is reliable enough for the running around I’ll need to do in the short term at least. 

Snuze: Needs another Swede > loki03xlh 10/23/2020 at 15:21

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Full size trucks are crazy. One of my vehicle options I’m considering is a Colorado/Canyon. It’s the least fun one, but would work out great for me as a home owner. Plus I could sell my folding trailer and get that out of my garage. But even the least desirable, base model  work truck has gone up $2-3k in the last year.

Snuze: Needs another Swede > AestheticsInMotion 10/23/2020 at 15:22

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I haven’t paid attention to the motorcycle market as much.  Maybe it’s a good time to try and sell my CB-1?

Snuze: Needs another Swede > ZHP Sparky, the 5th 10/23/2020 at 15:29

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The 850 was my practice mechanicin’ car. I got it for $400 and put probably about $1500 in it, but it’s almost new at this point - timing belt & tune up, motor mounts, rebuilt front and rear suspension, replaced dash and seats, replaced the entire AC system . I learned to do a lot on it, and at this point would have no qualms about using it as a daily driver.

I think it’s the smart money play right now, to downsize vehicle fleet while prices are good.  Someone else mentioned the motorcycle market is bonkers, I haven’t been paying attention, but it might be a good time to sell my CB-1.  

Snuze: Needs another Swede > Beefchips 10/23/2020 at 15:31

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Yeah, I generally don’t try to play the market either.  But I’m starting to feel like only good can come of waiting. I don’t want things to go to shit, but I think if I wait things will either settle and I get a normal (i.e. pre-pandemic) price and avoid the current markup, or things go to shit and I could score a really good deal.  

Snuze: Needs another Swede > Who is the Leader - 404 / Blog No Longer Available 10/23/2020 at 15:33

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I saw the screen name change. Y ou’re planning to get rid of your Cruze too, huh ? How come?

Last year I saw a diesel manual Cruze hatch for a really good price and I really, really, really thought about buying it.  

Snuze: Needs another Swede > dogisbadob 10/23/2020 at 15:37

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Nah, I’ll pass on the Accord. I’m looking for something either more exciting (a Camaro or Mustang) or more boring (a truck) to replace the Cruze.

I’ve done tons of work on the 850, it’s quite reliable, and not rusty despite living a lot of it’s life in PA. The achillies heel( s) of the 850 are the transmissions (automatic, like mine) and the interiors. I got the car cheap because the P.O. thought the trans was about to fail, but I serviced it (in stages) and it’s fine now. I replaced the dash cover and seats, so the interior is up to snuff too.

Who is the Leader - 404 / Blog No Longer Available > Snuze: Needs another Swede 10/23/2020 at 15:43

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Wednesday I drove what is technically still my car for the first time in two months. I have absolutely no use for a car at Georgia Tech but I still need one for the other times of the year to work. Basically, my mom gave her aesthetically challenged XC90 to my sister as her first car and has occasionally driven mine on errands so it gets driven instead of sitting. My parents plan on buying it from me at the end of the year and sort of bundle that into a graduation present by paying a little more than its worth (since my HS graduation present was supposed to a be a trip with my dad and obviously that was cancelled).

I really don’t need the practicality and I have been hankering for something more exciting so I am looking into using some savings plus the money from selling the Cruze to get into a more fun car. NB Miatas can be had in good condition in my price range (basically up to 8k including initial repairs to still leave a decent repair fund but I’d prefer less) but I’m still not sure exactly what I want. I really like Minis but if I want an S it’s really hard to find one in good condition that’s not got the infamous late 2000s boat anchor engine.

When I return home I will probably briefly become ‘Who is the Leader - Cruze Commander,’ at least until I can sell it. It’s been a fantastic car so I’m glad it will be staying in the family. 

Snuze: Needs another Swede > Who is the Leader - 404 / Blog No Longer Available 10/23/2020 at 15:51

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I think both the NB or Mini would be good, fun choices. I don’t follow prices on a lot of stuff, but have you looked for something like a Pontiac Solstice/Saturn Sky? They had the Ecotec engine which is pretty bullet proof and can be built up to make ridiculous power.

Also, Volvo V70 with the turbo 5. Just sayin’.

promoted by the color red > Snuze: Needs another Swede 10/23/2020 at 16:01

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I’m helping a friend buy her first car ($10k, <50k miles, post-2010 compact) and it’s honestly slim pickings compared to a few years ago. She’s exactly in the group of former public transportation users looking to buy a car.

While the foolhardy idiot in me wants to suggest the Volvo 240, she’s not the most mechanically-inclined person and it’s honestly too big for her neighborhood. Private party listings for non-Corollas seem to have stayed pretty close to Earth , so I think that’s honestly her best bet.

davesaddiction @ opposite-lock.com > Snuze: Needs another Swede 10/23/2020 at 16:02

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I think your plan is good.

Just be prepared for people to think you’re dealing drugs or something. =) I kid... I kid...

EDIT - oops, I confused you with the guy who got his relative’s silver and blue 7-series. 

Snuze: Needs another Swede > davesaddiction @ opposite-lock.com 10/23/2020 at 16:08

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It’s all good, just remember:

Silver and blue BMW 7 series: Dealing coccaine

Green Volvo 850: Cooking meth

Who is the Leader - 404 / Blog No Longer Available > Snuze: Needs another Swede 10/23/2020 at 16:12

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I could make Otto the Croatian Volvo lover so jealous hehehe. . .

I do love the turbo 5 Volvos when they aren’t an XC90 but the Ford era ones just aren’t my favorite. My go-to mechanic is a Volvo specialist though. . . . so obviously I need to find a Volvo Am azon or 1800 (haha not in that price range).

Saturn Skys/Pontiac Solstices are pretty uncommon and hard to find with a stick. Even rarer still in a good color. I don’t want to forsake my entirely reliable car for a money pit so I’ll consider them but I’ve checked my bookmarked car searches fairly regularly for like a year now and not seen even one pop up.

https://atlanta.craigslist.org/search/nat/cto?sort=date&search_distance=100&postal=30065&min_price=5&max_price=8000&auto_transmission=1

Here’s one such search that you might find interesting. Not lots of variety for fun small and flinge able.

Though if I could find a decent RX=8 for a low enough price I’d consider pricing out an engine rebuild but those have so many other problems in addition to that. I feel like al the good ones with blown engines have disappeared though and there’s just crappy ones not worth saving and question ones for like 7k.

But man I love MINI Clubmans too. Just look at this one!

https://atlanta.craigslist.org/atl/cto/d/snellville-mini-cooper-clubman-97k-miles/7217149690.html

ZHP Sparky, the 5th > Snuze: Needs another Swede 10/23/2020 at 16:12

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That sounds awesome and like you should be set with the Volvo for a long time to come! 

Snuze: Needs another Swede > 412GTI 10/23/2020 at 16:13

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You’ re right, and it seems like different segments are affected differently. Full size t rucks and 4x4 SUVs (i.e. Tahoes, 4Runners, etc.) seem to be way up, 40% , while cars are more like 20%. One vehicle I was considering was a low trim Colorado/Canyon and that’s only up about 10%.

The thing is, I’m in a good position where I’m in no hurry to sell or buy, but if I can get a little extra for my Cruze now, and then get a better price on something else in a few months, and I’ve got the 850 to drive in the interim, why not?

Cash Rewards > Snuze: Needs another Swede 10/23/2020 at 16:13

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“Sell cruze, daily volvo, let it all shake out” seems like a solid plan.

Were  you thinking EV at one point? They might still be giving away Bolts

Snuze: Needs another Swede > Dr. Zoidberg - RIP Oppo 10/23/2020 at 16:14

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This is probably the first time in my life I’ve A) been in a position where buying a car wasn’t a necessity (i.e. oh shit my car got totaled, quick, buy something else) and B) have been mature enough to actually stop and think and maybe wait before making a purchase. Being an adult is weird and kind of lame sometimes (I want a sports car now!). But like you I am lucky and grateful to have several vehicle options at my disposal.  

Snuze: Needs another Swede > promoted by the color red 10/23/2020 at 16:18

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I mean a 240 isn’t an awful choice, and doesn’t necessarily require a mechanic . Another Oppo summed it up well, “A 240 will run like shit longer than most cars will run period.” That being said, it’s not really the epitome of safety or efficiency at this point.

Has she considered a Gen 2 Cruze? It can be had as a sedan or hatch, and the Gen2 is much more reliable than the Gen1.

Eric @ opposite-lock.com > Snuze: Needs another Swede 10/23/2020 at 16:19

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I never knew “janky old Volvos” was a segment. 

Considering the used value of my car is within earshot of what I paid for it new, I’m not sure when this used price situation will normalize. I thought the C4C bump would pass, but it never did, now this one has severely reduced the number of used options that are a better deal than new. Before the pandemic, you weren’t breaking even on anything used under ~3 years of age unless it was extremely undesirable, unreliable, or luxury. Now it looks like ~6-7 years. Counting incentives and more favorable loan rates, it looks even worse.

If you don’t need it, there may never be a better time to unload it, but then I’m not sure if this is a trend or an aberration. The used market has been really weird for some time on anything even slightly desirable.

Snuze: Needs another Swede > camarov6rs 10/23/2020 at 16:27

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I live in ‘Murica, and Dodge is about to release a 702HP 10MPG super truck. I don’t think buying thought process is changing...

But you are right about rolling/strategic shutdowns.  But while that might influence supply and demand, I’m worried about what impact that would have on the economy at large (or what state the economy is in when that happens).  

Snuze: Needs another Swede > Eric @ opposite-lock.com 10/23/2020 at 16:27

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You must not be from around here...

Snuze: Needs another Swede > Cash Rewards 10/23/2020 at 16:29

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I was thinking about a Volt, and w ould still consider one. I commute <30 miles a day. But if Bolts are that cheap...

I’ll be back in a minute, need to google some things...

avalonian > promoted by the color red 10/23/2020 at 16:40

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Idk, where you are buy if you come down south the car selection in Atlanta is crazy for cars under 10k. Accords, civics and even 4runners but those runners are with mileage. 

promoted by the color red > Snuze: Needs another Swede 10/23/2020 at 16:49

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Oh no, I am very familiar with that sentiment! It’s a miracle mine somehow still ran & drove on the first turn of the key despite all the wires shorting everywhere. She does live near a good Volvo mechanic, but I would rather her focus on getting to work safely since she’s just getting started with her career.

Unfortunately there’s not many Cruze available in our area, but I will keep an eye out for them.

Snuze: Needs another Swede > promoted by the color red 10/23/2020 at 16:56

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That’s right, I forgot you were one of the 240 owners here. I just got back from a long work trip, I need to finish up some house projects, and hopefully in a week or 2 will get started tearing into my 240, now with added body work after my neighbor hit and smushed the front fender.

I’m sure you will help her find something good. Once she has safe, reliable transportation lined up, she’ll be ready for a project Volvo!!!

Eric @ opposite-lock.com > Snuze: Needs another Swede 10/23/2020 at 17:00

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Explain. Our market is a little weird, too. PNW prices are stickier because cars last forever and don’t really rust.

Cash Rewards > Snuze: Needs another Swede 10/23/2020 at 17:05

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https://www.koonstysonschevybuickgmc.com/VehicleDetails/new-2020-Chevrolet-Bolt_EV-5dr_Wgn_LT-Vienna-VA/4625415123

$15000 off msrp. I know gm MSRP is a joke, but still

Snuze: Needs another Swede > Eric @ opposite-lock.com 10/23/2020 at 17:06

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I’m just giving you a hard time regarding the janky volvo comment.

I live in the DC area. I sometimes for get about the cult status of Volvos and Subarus up there. B ased on the Oppo ramblings I read, I thought they had been succeeded by Tacos and 4Runners.

Also, we have rust here, so it’s hard to find non-janky ones. And around these parts if you’re driving an older Volvo you’re pegged as a weird hipster wannabe, PNW transplant, or possibly some eccentric college professor type. Of course in DC is you’re driving anything >5 years old most people assume you’re a poor.

But you are not wrong about how weird the used car market has been ever since C4C. 

Neil drives a beetle and a fancy beetle > Snuze: Needs another Swede 10/23/2020 at 17:07

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I don’t know how rough the Volvo is but I think it’s actually a solid plan. Used prices can’t stay this high forever, can they? I’m thankful prices  are where they are it makes unnecessary car day- dreaming less likely.

Snuze: Needs another Swede > Cash Rewards 10/23/2020 at 17:08

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Wow! That is a heck of a discount!

Cash Rewards > Snuze: Needs another Swede 10/23/2020 at 17:17

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Yup. They don't want them anymore

Snuze: Needs another Swede > Cash Rewards 10/23/2020 at 17:18

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It’s tempting, though if I’m honest I’d be more interested in leasing one. W ith a lease I could get out of it in a few years if I decided EV life wasn’t for me.

davesaddiction @ opposite-lock.com > Snuze: Needs another Swede 10/23/2020 at 17:23

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Got it!

camarov6rs > Snuze: Needs another Swede 10/23/2020 at 17:23

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Besides manufacturing shutdowns I see potentials in the mass movement of people out of cities, which may lead to a large influx of buyers needing cars rather than public transit. Or there is the large amount of people pushed out of the market due to economic downturn.

Cash Rewards > Snuze: Needs another Swede 10/23/2020 at 18:01

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I wonder if the lease deals are as good. There’s the likelihood that they’d be getting the car in a few years, they might be less motivated to make a deal than for a sale. Or not, who know?

Good luck either way.

412GTI > Snuze: Needs another Swede 10/23/2020 at 19:35

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Yep, exactly. The ball is in your court.

I was able to get out of our 2018 Cherokee lease 6 months early, make $2700 and lease a new one two months ago. The market is/was insane but to a lot of peoples benefit.

Good call on the Colorado. I always enjoy driving them, although admittedly not with the updated 8 speed. Funny enough we just had an 18 W/T traded at my other store. Don’t know if $28k is still a lot for it or not.

Snuze: Needs another Swede > camarov6rs 10/23/2020 at 20:03

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That's kind of what I'm wondering, it could go either way. 

Snuze: Needs another Swede > 412GTI 10/23/2020 at 21:07

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Thanks!

Colorado is my sensible homeowner vehicle. What I really want is a Camaro or Mustang.  Those are up in that 20%+ range. 

gmporschenut also a fan of hondas > Snuze: Needs another Swede 10/23/2020 at 21:56

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I have a 2017 volt, and an auto crz. I love the volt, but part of me does think of getting a manual with the crz as backup roadtrip auto. But with 40k miles volt is still in great shape.

My moms jeep was stolen and they had a heck of a time finding a replacement with the opions.

I live near a chevy dealership that has 2 remote storage lots. and since June one is still empty and the other 1/2 full. Its quite a shock, I dont know if they just can’t get cars or if they are intentionally keeping inventory low incase shit hits the fan.