Wholesale Used Car Prices PLUMMET | Episode 959
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Company
CarMax
CarMax is a big store that sells used cars. They have a lot of cars to choose from and don't negotiate prices, making it easier to buy a car.
Concept
used car market
The used car market is where people buy and sell cars that have been owned before. Prices can change based on how many cars are being sold and how much people are willing to pay.
Car
Honda Civics
The Honda Civic is a small car that many people like because it's dependable and gets good gas mileage. The 2023 version has a fresh look and comes with new tech features.
Car
Nissan Versas
The Nissan Versa is a small and affordable car that gets good gas mileage. It's a great option for people who want a reliable vehicle without spending a lot of money.
Term
price points
Price points are the different prices that cars are listed for. They help you see how much you might need to spend to buy a car.
Term
under 10 grand
'Under 10 grand' means the price is less than $10,000. It's a way to say that something is affordable.
Term
under 15 grand
'Under 15 grand' means the price is less than $15,000. It's a way to describe cars that are still affordable.
Car
Nissan 2020 Nissan
The Nissan 200SX is a small sports car from the 1990s that is fun to drive. It's not very common now, but some car fans really like it for its speed and handling.
Term
pricing
Pricing is how much a car costs. It can change based on how popular the car is, how much it costs the dealer to get it, and what other dealers are charging.
Term
dealer
A dealer is a person or company that sells cars. They can sell new cars from manufacturers or used cars that people have traded in or sold.
Term
gross profit
Gross profit is how much money a dealership makes after buying a car and selling it. It's important because it shows how much profit they earn from each vehicle sold.
Term
pre-owned cars
Pre-owned cars are cars that someone else has owned before you. They usually cost less than new cars and can be a good option if you're looking for a deal.
Term
reconditioning fee
A reconditioning fee is money that dealerships might add to the price of a used car to pay for fixing it up and making it look nice before selling it. Buyers should be aware of this fee when shopping for a car.
Term
wholesale declines
Wholesale declines mean that the prices for cars sold in large amounts to dealerships are going down. This can happen if fewer people want to buy those types of cars.
Term
out-the-door price
The out-the-door price is how much you will pay in total when buying a car. It includes everything like taxes and fees, so there are no surprises later.
Term
wholesale market
The wholesale market is where cars are sold in large quantities, usually between car dealers. It's different from buying a car directly from a dealership as a customer.
Term
conversion rates
Conversion rates show how many cars are sold compared to how many are available. A steady rate means that cars are selling at a consistent pace.
Term
trade-in value
Trade-in value is how much a dealership will pay you for your car when you give it to them to buy a new one. It can change based on how popular your car is and how well it looks.
Term
retail asking prices
Retail asking prices are what dealers say they want for a car when they sell it. These prices can change based on how many cars they have and how much people want to buy them.
Concept
inventory lag
Inventory lag is the time it takes for changes in car prices to show up in the number of cars available for sale. It means that when demand changes, it might take a few weeks for prices to change too.
Concept
used car manager
The used car manager is the person at a car dealership who decides how much to pay for used cars and how much to sell them for. They help manage the used car section of the dealership.
Car
Ford F150
The Ford F-150 is a popular truck that can be used for many things, like hauling stuff or driving on the road. The 2024 version has new features and options to choose from.
Car
Toyota Rav4
The Toyota RAV4 is a small SUV that is great for families and people who need extra space. It's known for being reliable and good on gas, which makes it a popular choice for many drivers.
Car
Toyota Tacoma
The Toyota Tacoma is a smaller pickup truck that's tough and good for off-road driving. Many people like it because it's reliable and holds its value well, which means it can be a smart choice if you're looking for a truck.
Term
2023 prices
'2023 prices' means how much cars cost if they were bought new in the year 2023. It's useful to know when comparing with newer models.
Car
Porsche Boxster
Car
Ford Bronco
Car
Toyota Corolla Cross
The Toyota Corolla Cross is a small SUV that is easy to drive and has plenty of space for passengers and cargo. It's a good choice for families or anyone needing extra room.
Term
brand new 2025
'Brand new 2025' means cars that will be available for sale as new models in the year 2025. People often look for these to get the latest updates and improvements.
Concept
new vs used cars
When people talk about new versus used cars, they are comparing the benefits of buying a brand-new car with all the latest features to buying a second-hand car that might be cheaper. Each choice has its pros and cons.
Term
warranty
A warranty is like a guarantee from the car maker that they will fix things if they break within a certain time or distance. For the Civic, it had a warranty for three years or 36,000 miles when it was new.
Term
subvented
Subvented means that the car company helps lower the interest rate when you finance a car. This makes it cheaper for you to borrow money to buy the car.
Term
retail site
The retail site is where you can buy cars directly from dealerships or private sellers, rather than at auctions where dealers sell to each other.
Term
Blackbook data
Blackbook data gives information about how much used cars are worth. It helps people know if they're paying a fair price when buying or selling a car.
Term
lease options
Lease options are choices you have when renting a car for a certain period. You pay a monthly fee, but you don't own the car when the lease ends.
Car
Gm Sierra
Car
Gmc Sierra
The GMC Sierra 2500HD is a big truck that can carry heavy things and tow trailers. It's built for tough jobs and is popular with people who need a strong vehicle for work or outdoor activities.
Term
factory incentives
Factory incentives are special deals from the car maker that help lower the price of the car. They make it cheaper for you to buy.
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Now, dad, the big story this morning.
Yes.
The big, big, big story this morning.
There are two of them.
Yes.
One you know about and one you don't know about.
The first one that we're gonna look at is right here.
Wholesale used car prices are cratering.
We had our first 1% decline week over week
from the black book market index, excuse me,
of used car depreciation.
This is a tremendous moment.
We have not seen 1% decline since 2022, 2023.
This is a huge moment and we're gonna talk about why
in just a few minutes.
The other big news this morning,
I don't even know if you saw this yet.
I did.
CarMax, dad, just fired their CEO.
Yes.
So when we talk about a used car market update,
CarMax is the largest retailer of used cars
in the United States of America
and they just fired their CEO.
So something is going on there, but let's start here.
Well, you know what's interesting?
You never wanna go through life
with weak financials apparently.
Yeah, evidently.
But dad, let's start here.
Yeah.
What are you seeing when you look at the data
and we're gonna do a deep dive today
because wholesale used car prices are plummeting.
What is your intuition telling you here?
We have a 1% decline week over week
when the market average, the normal is half of that.
So if you double the amount of depreciation,
what does this mean?
What's your intuition?
What does it mean for car shoppers, et cetera?
Well, you know, this is the time of year
when the wholesale values typically decline,
but they don't necessarily decline at this rate.
What it indicates to me is that perhaps finally
we're having the correction that we need.
And what do I mean by that?
We're finally starting to see wholesale used car prices
falling back to the levels that they should be at
or should have been at.
We know that there was a huge climb in wholesale
and retail values during the pandemic.
And even though we've seen a retreat
in those prices of about 40%,
they are still probably 25 to 30% higher
than what they should be.
And so this would indicate to me
that a, used car sales are probably slowing
to a certain degree, wholesale values are falling
because the sales are slowing
and we should see better pricing moving forward
for people looking for pre-owned cars.
They should become even more affordable.
And conversely, it means the value of your trade
is going down.
So that's the dynamic when we talk about the used car market.
If used car prices are plummeting
on the wholesale markets,
that means the dealer's gonna offer you a heck of a lot less
when you go to sell your car to them.
So yeah, Deb, when we dig in here,
let's look at some specific segments of vehicles.
So first off, age of vehicle.
Newer zero to two year old used vehicles
saw the steepest losses, over 1.07%.
Those older used cars, eight to 16 years old,
they're only depreciating at 0.66%.
So this is the first indication here
that if you have a newer used car that you're eyeing,
you have more negotiating leverage today
than you did last week,
and you'll have more negotiation leverage next week
than you did today.
We are seeing a tremendous decline in values
of one and two year old used cars.
Conversely, if you're looking at that, I don't know,
14, 12, eight year old used car,
it's not falling in value
as much as you would have anticipated.
It's such an interesting moment
where the older a used car is,
the less rapidly it's depreciating.
Yeah, the older used cars that represent
the best affordability for most people out there
are not falling in price as rapidly
as your one and two year old cars,
which would indicate to me
that finally the one and two year old cars
are going to be significantly lower priced
than the comparable brand new car
that it suddenly will make sense again
to buy the one or two year old car
as opposed to buying the new car
simply because you get a more complete warranty.
So the greater the spread in the pricing
of a one and two year old car to a brand new car
means that that one or two year old car
is going to sell quicker.
Which is interesting because Carfax
actually just came out with a new study
where they're trying to make the case
for should you buy new or used.
And here's just one example.
2023 Honda Civics nationwide average price,
it's selling for 24,300 bucks.
The average selling price for a new 2025, 27,400 bucks.
Which one you choose in the used or the new one?
You're choosing the new one.
Yes.
So for the longest time here,
I mean pre-pandemic especially,
it's always made sense you buy used
to get a better value.
Then that kind of switched over the past couple of years
because used car prices got up so high.
But now to your point,
the area where we are seeing the most rapid
depreciation is obviously amongst those
newer used cars.
So it does create this opportunity
for potential big savings.
And for it to actually make sense
to buy the newer used vehicle.
Like this is a paradigm shift
that's been going on oscillating back and forth.
But it's, there's the potential
for it to make sense now in today's market.
So that's one dynamic to this.
Let's scroll down, Popson.
Let's take a peek at the various types of vehicles.
This is alarming to say the least.
If you're a car dealer, right?
And then we're going to talk about the impact
that this has on a consumer.
If you're a car dealer right now
and you've got used vehicle inventory
that are subcompact cars versus, for example, okay?
Tiny subcompact cars.
They fell almost 2.5% in value in one week.
Yes. That's huge.
Huge.
Might be a tiny car, but it's a huge.
And it's decline in its value.
That's nuts.
Yes.
That's absolutely crazy.
And what's crazy about it is the subcompact cars
are the ones that are the most affordable.
And so for the most affordable cars
to see such a significant decline in their value,
that indicates a couple of things to them.
First and foremost is for whatever reason,
buyers out there are not interested in subcompact cars.
And I think we kind of sort of touched on that yesterday
when we noticed that the Versa is one of the slowest
selling new cars out there
at a $21,000 average transaction price.
So here we're looking at subcompact cars
that are eminently affordable in today's world
and the people aren't buying them.
So that's kind of scary when the most affordable vehicles
that we would think the most people would want
are depreciating the most because, well.
People don't demand them.
The demand man.
They're for them.
So let's actually go to the car edge machine
and let's look at this, Dad.
We're gonna look here briefly.
Let's pull it up on the screen.
Used Nissan Versa's for sale nationwide.
There are 8,685 of them for sale nationwide.
Holy cow, look at the price points on some of these.
You want a 2021 Nissan Versa under 10 grand.
There's something, that'll be something wrong with that.
2025 under 15 grand.
Look at that, yeah.
You know, so it is interesting to see here
and what'll be interesting especially to track
is as in the wholesale markets,
we see a week over week, two and a half percent decline.
That is uncanny.
Yeah.
Y'all, 2.44% is uncanny.
Okay, as we see that will that start to impact price histories
of advertised prices we've seen here.
And let's actually, let's double click into one of these.
So this is that major world.
This is Long Island City, New York.
This vehicle they've had for 97 days.
I was age 20, 20.
Let's click on it.
2020 Nissan Versa.
What I am interested in here,
I wanna scroll down, I wanna look at the price history.
Fascinating.
We had it originally listed for sale.
It looks like, yeah, this is 2025, $17,888.
They've got it listed for sale now, $13,887.
Again, y'all have been watching this show long enough
to know that we do these things live.
This is not premeditated.
That's a significant price decrease to try.
That's a $4,000 price decrease
to try activity on this vehicle.
And I don't wanna say anything negative
about the New York metro area.
Sure.
But some of the greatest frauds in automotive pricing
occur in the New York metro area.
So you can see that the dealer
has reduced the price $4,000.
My suspicion is that in today's world
where the average gross profit on most pre-owned cars
is somewhere around $1,750 to $2,000,
that there is not a $4,000 spread built into that car.
So today, if it's at $13,800 and change,
I would suspect, I don't know this,
but my suspicion would be that if you went
to the dealership to buy it,
that there would suddenly be a $1,995 reconditioning fee.
My point in bringing it up is not necessarily
to indict the practices.
The point is, it's actually a positive sign
relative to what we're seeing.
We're seeing significant wholesale declines
in values for subcompact cars.
We're seeing more aggressive advertised prices.
You always have to do what we've taught you for years now,
which is get the up-and-door prices
and where you see things like that.
That I wanna show one more thing from the Blackbook data
and then we're gonna switch gears,
which would be their analysis
of what's going on the wholesale market.
Wholesale values continue to soften this week
with the overall conversion rates steady at 58%.
So that means 58% of the cars for sale
at dealer auctions actually sold.
Car values declined 0.97% compared to 0.79%
the last, the prior week.
Indicating, excuse me, a quicker pace of depreciation.
Trucks fell 1.06%.
So even faster versus 0.86% the prior week.
Broad weakness across utility and crossovers.
Inventory remains stable while attendance improved.
Though buyers stayed highly selected and price sensitive.
2023 and 2024 models lay a volume
while 2025 entries continue to show downward pricing,
momentum compact and subcompact segments
saw the largest declines as we shared earlier.
I think we're going to continue to see downward pressure
on used car prices at the wholesale auctions,
which should, I see the question somewhere here
in the chat.
Where was it?
Where was it?
Where was it?
How are the prices wholesale versus retail?
We know they lag on the retail side
where it doesn't lag as in your trade in value.
Yes, the trade in value is impacted first.
The retail asking prices are impacted much later.
Typically, there's a four to six week lag.
Don't know why that is.
Well, okay, I do know why that is.
And the why that is is simply because the inventory
that they have on hand was purchased or traded in
prior to we started seeing these type of declines
in wholesale values.
So they're still going to ask for all the money
that they can on the vehicles that they have in stock.
Simply because they were purchased at a higher price
than what the replacement vehicle would be at the moment.
Yeah, absolutely.
Absolutely.
Okay, so the other used car story we got to cover
and then we're going to think this very kind contribution
and address those questions.
Thank you for that.
But the other used car market story, Dad,
yeah, CarMax firing their CEO.
Why would CarMax fire their CEO?
Obviously, they're not performing as well as Carvana.
So I think that has something to do with it.
But CarMax, Dad, maybe waving a little bit of the flag here
that their business is not as stable and steady
as we had thought.
And to be clear here, CarMax, one of the largest,
if not the largest, used car retailer
in the United States of America.
Not necessarily where you go to get the best deal.
The vehicle, the convenience, that's fine.
But Dad, firing their CEO, this feels like a big story.
Well, I think it is a big story.
The story is, in my opinion,
is you can only be the steward of a business
that's going in a downward direction for so long
before those in charge, the board, says,
OK, it's time to make a change.
Have we ever seen that before?
I don't know.
Did anything happen to Carlos Tavares about a year ago
at this time when he was running Stellantis
and it was doing the same thing that CarMax is doing?
It was suffering from weak financials.
So I think that's the key, that you can only
steward a company on a downward spiral for so long
before they think, perhaps we have the wrong steward in place.
For sure.
So you think it's more of just a corporate decision,
not indicative of what's going on the used car market.
I think that there's a lot of volatility
to be had in the used car market.
And so you need some dynicism at the top of that.
CarMax's strategy hasn't worked.
And CarMax's strategy, to be very clear,
charge a lot of money for used cars
and offer a great experience.
It's not working, especially as their peer, Carvan,
is growing rapidly.
And we do see, obviously, most used cars still
get sold through normal car dealerships,
where you still haggily still negotiate all that.
So I'll be watching this pretty closely
to see who they bring in as the full-time replacement.
Interesting to see at CarMax.
Well, and it might impact some of what they do in the sense
that there is, I know when I was still in retail automotive,
if a customer went and got an appraisal with CarMax
for their vehicle, it was always significantly higher
than what the used car manager,
whatever dealership I was working at,
would have considered to be a reasonable amount
for that vehicle.
So perhaps, even though they were always willing,
and it was profitable for them to pay way more
for vehicles than their competitors,
my suspicion is that we're going to see
some of their offers go down,
so that they can be buying the cars
at a slightly cheaper price,
and retailing them at their inflated prices,
which I think would be a remedy for weak financial.
I want to be clear, though,
just in the spirit of transparency,
we work with CarMax,
and we'll be very clear here at CarEdge.com.
If you haven't already, add your vehicle
to the CarEdge garage, and then from the CarEdge garage,
you can get instant cash offers right here
from our partner, from CarMax.
So I want to be very clear,
we have a commercial relationship with them.
They've been good partners to us.
They've bought hundreds, if not thousands,
of cars from the CarEdge community.
Obviously, if you're not using the garage,
you should be, track your vehicle's value,
and then sell your vehicle to CarMax,
but obviously dealing with some challenges
and some struggles there,
so it'll be interesting to see how they navigate this.
Now, now let's come back to the chat from you earlier,
from Jebus Buddha.
Anyway, I appreciate the kind contribution.
Y'all saved me $600 on a new insurance policy
with your help.
Friendly reminder, we don't talk about that often,
because I hate feeling like an insurance salesman.
Don't talk about it that often.
You never talk about it.
Yeah, I don't want to feel like an insurance salesman,
but we do have an insurance marketplace,
CarEdge.com, then click on insurance up there.
You should be doing this once a quarter.
Heck, didn't you do this six months ago,
and didn't you save some money?
I did this about six months ago, and I did not save.
Oh, I'm sorry.
Yeah, but it's okay.
You should try again now.
We could.
We could.
Anyway, go to CarEdge.com, click on that.
You can learn more about how we can help you save some money.
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That being said, PS,
what would you like target price for a new 2024
RAV4Phev in Georgia?
So while you were going on before, Dad,
I queued up some of this data.
Can you even find a new 2024 RAV4Phev?
So this is the deal, folks.
Nationwide, right now,
there are 217 new 2024 RAV4Ps for sale.
I don't even know if that's going to be right.
I mean, we can look at these and we can spot check them.
There are not going to be many, if any,
lingering prior model year Toyota vehicles out there.
And here you got an example of a 23, but I would...
Yeah, this is not a the Toyota dealership.
This is mislabeled data, is what we're looking at.
Well, my guess is that 346 days,
if you scroll up, some of the others were 400 some days.
The only reason they would be that amount of days
is they kept them on the new car side of things
and perhaps their service loaders.
OK, I couldn't even begin to imagine
the malfeasance required at a Toyota dealership.
Look at this from Jerry.
Those have to be service loaners not properly delivered.
Yeah, exactly.
So the short answer to what's the target discount is there isn't one.
Yes, it's not a new one.
Now, that being said, other brands,
there's tons of new 2024s out there that are still sitting.
You want an F-150? Go buy a 2024 one.
The dealer still has them.
Put on a Toyota on a RAV4, no can do.
So unfortunately, we don't have a great answer there.
It is.
No, we have the answer.
Yeah.
There is no target discount for a new one
because you're not going to find a new one.
There there there will not at the rate that that RAV4 sell.
Yep.
Especially in a PM.
Yeah.
There's no way there's any that have been sitting for a year or more.
And if they are, then you would have to ask the question,
what happened to it?
How severe was the accident that was in?
Why did it take seven months in the body shop
to put it all back together again?
I mean, it just it doesn't stand to reason
based on how quickly Toyota's sell.
Tacoma. OK.
Then we're having a different discussion.
Hondra.
Then I have another RAV4.
And especially at P.
Yeah. Yeah.
Let's come here from David.
How long before the retail prices reduce
a corresponding amount to wholesale prices?
So you were saying four to six weeks.
I am just very interested to see if we even see downward pressure
on advertised prices.
This I think could show up.
Well, this could not show up
because the only way it shows up
is when you negotiate how you have more leverage.
I wouldn't be surprised if dealers just try to hold their ground.
I think the key word there is corresponding amount.
And the answer to that would be never. OK.
And the reason I say that is just because wholesale values
are dropping at a percent of week.
I don't believe that we will see the retailers at this point
moving forward, offering corresponding discounts
or declines in asking prices based on.
Even though there's it'll be four to six weeks
before you start seeing downward pressure on retail asking prices,
that downward pressure will never be equivalent
to what the downward pressure has been on the wholesale level.
Because there's a spread.
They're going to make sure they're still making money.
Yes. And again, I wouldn't be surprised.
And we've we've seen this when use car prices go all over the map.
The advertised prices might not change much.
Could even go up.
Yeah. But the negotiability, the willingness of the dealership
to take a shorter deal, that goes up.
Yeah. I mean, quite frankly, as buyers, it's good to see we've got
an oversupply of new car inventory right now.
And we're seeing downward pressure
at the wholesale markets for used cars.
Good news on both fronts.
Now, let's look at one other piece, which was that car fact study.
And they put a couple of good points here
about the new versus used conundrum right now.
Solve this out.
It's not the only model this is happening to you.
Remember before we talked about the 2023 Honda Civic used 24,300
on average, new 27,400.
The Bronco, Kia Celtos, Toyota Corolla Cross, the Porsche Boxster,
Toyota Tacoma all have relatively little difference
between their 2023 prices and a brand new 2025.
Now, many of these models are also into their 2026 now.
But you've heard us talk about on this channel and ad nauseam over
on the Car Edge main channel, you want a really good new car deal.
You look at the prior model year.
Yes. In some cases, that's 24s.
In most cases, it's 25s.
Yes. So we're not seeing a huge difference in price point
for these particular models between a 23 and a 25.
And as you've always said, Dad, and let's read these out.
On a new car, you're going to get a better interest rate.
Yes. Let's talk about that a little bit.
You get more features with the new car instead of the used car.
You get the full warranty and you also get to be the first owner.
You know what's going on with the vehicle.
So these are four reasons why new versus used.
And today is dynamic.
It still makes sense even as used car prices on the wholesale side
start to go down a little bit.
In many cases, it still makes sense to go to go new.
And the Civic was the perfect example.
There's a $4000 spread between a brand new 25 and a two year old.
And let's say it has an average miles, a two year old Civic with about 30,000 miles.
There's there's a $4000 spread.
If that Civic is two years old and has 30,000 miles on it,
it was sold with a three year, 36,000 mile warranty.
So it has maybe 12 months or 6,000 miles of warranty left,
whichever occurs first.
So would that make sense to buy that and finance it?
And the average interest rate on a used car alone today is what?
11, 12 percent versus the average interest rate on a new car is seven to nine percent.
And in some cases on new cars, you get subvented
at manufacturer programs, 0.9 percent.
So for $4000, it seems to me that it would make more sense
to get a full three or 36,000 mile warranty
that you could finance it at a lower interest rate
and probably ultimately have a payment that would be equivalent
to what it would have been on a 2023.
So when you look at those one and two year old cars
in comparison to brand new ones, you have to do all of that research.
And I actually don't think you have to do that much research.
Probably nine times out of 10.
It makes sense to just go nil.
Well, yes, you can start to do the math equation.
But you should.
You should you should at least know what that what that math difference is,
what the ultimate difference is when you start factoring in interest rates
and things of that nature. Yeah.
But I think but I think generally speaking.
Oh, and typically that new car doesn't need a pre-purchase inspection.
Yeah, you're not paying for that.
Used car does. Yeah. Yes.
Yeah. So I think there are a lot of incentives right now still, even though
today we're talking about how wholesale used car prices have plummeted,
which again, for those of you, I know I put plummet in the headline
and we're probably going to get some pushback, but I'm going to pull it up on
this drill, not us.
Yeah. Now I'm going to pull it up on the screen one more time.
I mean, this is the largest amount of weekly depreciation we've seen since 2022-2023.
Yes. And it says again, wholesale depreciation.
We track that because it's an indicator of what's going to happen on the retail site.
That is visually, yeah, eventually that is good news for used car shoppers.
And in the same exact breath, Carfax has the new data that says,
you know, probably makes more sense to buy the newer the new car instead of the
new car, even though we know the 23s just from the Blackbook data
are depreciating more rapidly than the 2013s.
Yes. Fascinating dynamics in the market.
But no matter how you really slice it and dice it, probably nine times out of 10,
you're doing new versus used assessment right now.
Unless that's a used car that's 10 years old, eight years old, things like that.
News probably going to be your better realm.
Yes. No, we're absolutely.
Which again, puts like a conundrum of the freaking versa.
Why is that one of the slowest sellers in the United States?
Maybe. But anyway, if I were to take a guess because it's a Nissan.
No, because it's a piece of crap.
OK, that's it.
For those of you that are interested in the verse,
though, please do not.
My dad influence you too much.
Go test drive the thing and if it's your budget, that's fantastic.
Well, from Rich here, fits in nicely the color with our background.
We had. Thank you.
Thank you for the kind contribution.
Get a paper launch. Great show.
Keep the knowledge coming.
My good fellows, we appreciate that, Rich.
We really. And we try.
We try on a daily basis.
And some days we hit the nail on the head and some days
the head of the hammer just falls off as we're as we're flinging it.
Billy, kind of put the comment in here.
Interest rate on the new car is lower than the used car.
That's 100 percent right.
We see that day in and day out.
We mentioned earlier, I mentioned the subvented interest rates.
Manufacturers, especially in December,
we anticipate more 0 percent finance and things like that.
Justin on the team just published today.
All the 0 percent offers for November.
All the under $250 a month lease options out there right now.
There's tons of under $250 a month lease options.
So the new car market is heating up in terms of deals and in terms of offers.
Maybe it's maybe maybe I need to look at replacing my vehicle.
Those are deals and offers that you can't get on the used car side
because the manufacturer is not incentivizing that.
Yeah. OK, folks, again, a friendly reminder,
if we can help you with anything, it's caredge.com.
Carside show you fake prices.
We'll get you the real one.
We'll get us put us to work.
And again, if you're interested in having your expert car buyer on your side,
we do all the work.
Let's see, skip the stress, get a dedicated car buying expert to find
and secure your next car start to finish.
We handle the research, dealer outreach, test drive coordination,
price negotiation, paperwork for you and delivery logistics.
Sounds like a pretty good service.
Yeah, you can learn more, schedule a free consultation,
call in my new favorite feature on the website.
It is wonderful.
You want to know how many deals our team has done?
You can come in here, see more.
They're total savings, deeper, deeper bio on who this individual is.
And obviously, all those recent deals as well.
Folks, please check this out.
These concierge profiles got me so excited.
Yes. So doggone. Cool.
Love to see it.
So please, folks, check out the website.
Again, limited time off for $150 off for caredge concierge.
Dad, it must you've got anything else.
I'd like to call to show for today.
We're back tomorrow side by side.
We are caredge live.
But yeah, that's what I have for today.
Well, you know, that was may I just say one thing,
a shout out a shout out to my friends on Amtrak yesterday.
Oh, and let's give a shout out to Grant. Yeah.
Yeah, typically when I travel and and and if I sit next to somebody,
I have I know you're going to find this hard to believe,
but I am really in the introvert and I really have usually no interest
in chatting it up with the people that I'm either sitting next to or sitting across from.
He's an introvert, but he's long winded.
Yeah, yes. So yesterday on on on my Amtrak train ride down
when I got on in Philadelphia, I had a table seat, which I normally hate
because I knew that there was going to be somebody across from me.
That somebody across from me turned out to be such a wonderful human being.
Just so much fun chatting it up with them.
So yesterday, I spent an hour and a half
chatting it up with Kelsey Grammer on Amtrak.
We had the most wonderful time together.
I won't even mention that he knows about my son's issues at Pitt when he first
went to Pitt because, well, Kelsey blesses heart.
He and his wife just had a baby new son four weeks ago.
We were talking about parenting.
We were talking about just being nice to people and bringing back good manners.
It was the fastest 90 minutes that I ever spent traveling.
And a shout out to Grant.
Yeah, we met downstairs this morning, a subscriber to the CarEdge channel.
Yes. Got a cute story.
I don't know.
I don't know why I feel like Danny DeVito in that picture.
You look good.
And then a shout out to Justin Fisher on our team.
Another letter to the editor was published today.
Electric vehicle sales will be powered by word of mouth.
This is a letter to the editor that Justin wrote, dad.
Wow. Yeah. Wow.
So congratulations.
Justin recently, so proud of Justin.
He's been featured obviously here now in Automotive News.
He's also been featured in Bloomberg.
And there's an upcoming Wall Street Journal article that Justin contributed
materially to that will be coming out soon.
So congratulations to you, Justin.
Grateful you had this awesome experience on the train.
Grant, it was a pleasure meeting you.
Justin, congrats again on all of your accomplishments here at CarEdge.
We love to see it from Ursa Rage.
Yes. Keeping us on, which we appreciate.
Gentlemen, I just found the two of you.
Welcome. Yes.
Maybe. Love the show.
Thank you. You see how long that lasts.
Looking to buy a new GMC 1500 or 2500.
I hate what truck prices are going for is the end of 2025 is the best time to buy.
I know you do not have a crystal ball.
Let's talk a little bit about this.
That sounds like Ursa Rage, new to the channel.
Why is right now, both from a market dynamic standpoint,
I'll pull up some 1500s that we can look at and also just like, you know,
seasonality wise, why is right now the time to be in the market?
Typically, the fourth quarter is the best time to buy a car.
And within the fourth quarter, the best time is usually November and December.
And within December, the best time is between the week of Christmas and New Year's.
That is when, historically, manufacturers have their greatest
incentives available during the course of the year.
Dealerships and dealership personnel are incentivized to hit the sales goals
that they had set for the store and for themselves back on January 1st.
So there is great motivation to move out product and hit sales objectives
and sales goals.
And there is a frenzy that takes place during the latter part of December.
So that's the seasonality.
Yes. Then Ursa Rage, the current market dynamics,
encourage you to use the car search.
You go here. This is nationwide.
There are currently 55,000 GMC Sierra 1500s for sale.
And just look at this, 167 days, 208 days, 66 days, relatively new one.
Yeah. What you want to look at is in your market area,
both what is the MSRP of the vehicle?
Of course, what's the dealer invoice price?
What's the target discount?
So how much is the dealer discount?
And those target discounts are before any applying factory incentives on top of that.
But then you want to look at the market day supply for your area.
189 days means buyer has leverage.
Maybe we should update this thing.
So if the number is ever over 90, it just says alarm bell, buyer has leverage.
But anyway, these are the data points you want to look at that show you kind of at
the micro level. So there's the seasonality and then there's the reality right now
that in many instances, most markets are buyers, markets, dealers have too much
inventory, they're not selling fast enough, you can leverage that for good.
OK, we're back tomorrow.
We are indeed.
Yes.
Our, my plan is to be here.
The hotel is a block and a half away.
The walk is brisk and short.
We'll see you tomorrow.
Yes. Thanks for being here, everybody.
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About this episode
Wholesale used car prices are experiencing a significant decline, marking the first 1% drop week-over-week since early 2022. This episode dives into the implications of this trend for car buyers, highlighting how newer used cars are depreciating faster than older models. The hosts discuss the impact on trade-in values and the overall market dynamics, including CarMax's recent CEO firing, signaling potential instability in the used car retail sector. Listeners gain insights into negotiating strategies and the shifting landscape of new versus used vehicle purchases.
Original notes
Today on CarEdge Live, Ray and Zach discuss the latest data on used car prices. Tune in to learn more. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com
for information about our collection and use of personal data for
advertising.
CarEdge Live
Ray and Zach Shefska, Bleav
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33:15