Why Dealerships Are NOT Lowering Prices | USED CAR BUBBLE
Published: 2022-10-28
Status:
Available
|
Analyzed
Published: 2022-10-28
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The current auto loan situation is being compared to the lead-up to the 2008 financial crisis, implying a significant potential downturn.
"I'm not saying it's gonna be 2008 but hey did anyone living through 2008 know it was 2008."
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Dealerships are predicted to face significant financial difficulties.
"dealerships are about to be in big trouble"
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Dealerships are unable to lower car prices due to their current financial situation.
"dealers are about to be in big trouble so with that said let's get right into it alright so here we have lucky Lopez with us thank you lucky for coming on yeah here's a anyway I have a lot of questions for you because why haven't dealerships lowered their car prices as much as we'd like so the reason why dealers don't lower their prices because they actually can't"
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Car prices are increasing due to carrying costs and dealer investment, making it impossible for them to lower prices.
"the carrying costs and everything else is what's bringing the price up so our car went from thirty two thousand now it has a retail of thirty three thousand every month this goes on and on and it snowballs out of control and the dealers cannot afford to lower the price because they have so much money invested into it"
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Carvana is predicted to report significant losses and potentially go bankrupt or out of business on November 1st, which will have widespread repercussions for the auto industry.
"this is only the beginning because one of the largest dominoes is about to fall we're waiting for carvana's numbers that come out November 1st they're going to show massive losses and probably go into actual bankruptcy or go out of business and that's gonna have major Ripple effects across the entire automotive industry"
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Consumers are advised to delay car purchases until around Christmas time to potentially get an additional 5-10% discount.
"so what we're advising people now is not to purchase to wait we believe you'll get an extra five to ten percent off of your pricing if you purchase around Christmas time"
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Consumers who bought used cars in 2020 or 2021 will be unable to refinance or trade them in because they are 'upside down' on the loans, meaning they owe more than the car is worth. The only option may be to walk away.
"for people buying used cars they won't be able to refinance or trade in because they're upside down on their cars because they bought in 2020 or 2021 so they also paid more for their cars than their worth so they just can't refinance or get anything out of it which means the only thing they can really do is just walk away"
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Car prices are unlikely to decrease in the near future because dealers paid more for vehicles than they are currently worth, and they cannot afford to lower prices despite wholesale price drops.
"dealers will not be lowering their car prices anytime soon just because they can't because they paid more for their cars than they're worth and even though wholesale prices are coming down they won't lower their prices because they just can't"
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Consumers with excellent credit will face increased difficulty obtaining loans due to the ongoing credit tightening in the market.
"for consumers with excellent credit they'll have a harder time getting a loan because of this credit news or credit tightening you've talked about"
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A significant portion of cars at auction are not meeting their reserve price ('no sales'). This, combined with increasing repossessions, is creating excess supply, which is expected to reduce demand and potentially lower consumer prices.
"half of the cars run at the auction today are what's called no sales cars that don't hit the reserve all these repos that are coming in are coming in every week and they're running along with the cars that are going for no Reserve met this is causing a massive snowball and Supply which is going to bring down demand which is going to hopefully lower prices for consumers"
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Carvana is predicted to report substantial losses on November 1st and potentially face bankruptcy or closure.
"we're waiting for carvana's numbers that come out November 1st they're going to show massive losses and probably go into actual bankruptcy or go out of business"
Pending