Used vehicle resale values going up?

[rc2002]

The Canadian dollar broke through 0.83 and is heading downwards. Exchange is at 1.21 at this time of posting which is more than 30% off the highs.

The import of US cars put a lot of downwards pressure on used cars. Once the cheap inventory (cars brought into Canada at a favourable exchange rate) is gone, I see the pricing trend for used cars headed up again.

Anyway, bottom line is if you're selling one of those popular imported US cars like S2K, M3, STI, you probably got in at a great price. If you're not in a must sell situation I'd recommend hanging onto it rather than ditching it at prices at or barely over black book. There won't be as much competition in the used marketplace soon and you'll probably make some extra money on your car.

^ My $0.02.


Discuss?

[Xtrema]

It may be true but you are also working against time. The longer you wait, the more it depreciate. And with the tightening of credit, people will be more likely unable to afford used cars.

While you won't be dealing with new competitions. There are shit load already in the market from the last 2 years.

At best, u won't lose as much when you sell. But it won't GAIN value unless it's a rare desirable unit.

[JRSC00LUDE]

Seems like a reasonable assessment to me sir. :)

[Xtrema]

Now is a good time to buy new cars that has been Canadian price adjusted - like the Corolla, Impreza and 335i.

Because in about 3-4 years, they will be hot items that will be imported into USA due to the low dollar and you won't take as big of a depreciation hit.

[max_boost]

Yeah I've already temporarily given up on the whole importing thing. We'll see in spring where the dollar is.

[Team_Mclaren]

also factor in the current economic situation and the potential crashing of US dollar in the near future. All in all i think its still a buyer's market.

New cars will begin to come down on price too, unless the CAD stays at this low level and manufacturers decide to fuck us again

[Xtrema]

Originally posted by Team_Mclaren
New cars will begin to come down on price too, unless the CAD stays at this low level and manufacturers decide to fuck us again

There's a reason most went with cash rebate when paid by cash instead of actually dropping the MSRP. Gives them the flexibility.

Regardless, I think the economy and not the currency will play key here.

[mikestypes]

Two things that deflate your theory:

1) It is much more difficult to get credit to buy a car, new or used.

2) Just like hardly anyone is buying a new car, hardly anyone is buying a used car too. People are holding onto their current cars alot longer because they realise they need them more for basic transport and not a toy.

[rc2002]

Originally posted by Xtrema
It may be true but you are also working against time. The longer you wait, the more it depreciate. And with the tightening of credit, people will be more likely unable to afford used cars.

While you won't be dealing with new competitions. There are shit load already in the market from the last 2 years.

At best, u won't lose as much when you sell. But it won't GAIN value unless it's a rare desirable unit.

Fair enough. But I believe the upside of holding on is greater than the downside due to depreciation. Once the "shit load" is gone, there won't be cheap cars to bring over anymore.

A car you buy today at black book may fetch a premium over blackbook a year from now. That's gaining in my books.

[Xtrema]

Originally posted by richardchan2002
A car you buy today at black book may fetch a premium over blackbook a year from now. That's gaining in my books.

It will be like penny stock. It may double in value and nobody wants to buy it, it's not a gain.

People may rather prefer low manufacturer rate finance/lease or cheap used practical transportation and not toys.

I think next few months will be GREAT time to pick up remaining US imports. It's getting cold, economy blows, loan is expensive. If you got the cash or cheap credit, I'm sure there will be lots used cars desperate to be moved.

[Sorath]

looks like i bought at the right time :D

[funkedelic2]

hmm yeah i am having a hard time selling my car since the new m3's came out, the valve of them have dropped so much, that i am having a hard time selling my car for 25k!

Maybe ill wait around till next year before selling it again. Doesn't help that im selling right before winter too.

[Redlyne_mr2]

The values of used US cars will continue to decline, we may see small increase in the value of Canadian used cars but we won't see anything major as many manufacturers have lowered their prices which is ultimately what killed the value of used cars in the first place.

[rage2]

There's other reasons why your car isn't selling, but I think a lot of us talked about it before you bought your car :).

Anyways, the current USD strength is a temporary phenomenon, it's completely unsustainable especially with the US printing billions of dollars outta nowhere.

Here's an interesting article, and a key point as to why the USD is advancing:

http://www.financialsense.com/Market/barbera/2008/1021.html


In looking at the currency markets and the Dollar markets, the current trends seem to have gone too far in one direction without any significant counter trend move. In the case of the US Dollar, it is clear that the Dollar has benefited from the unwinding of carry trades that had been implemented over the years by the hedge fund community. Looking back at the last decade, the growth of assets under hedge fund management has soared into the trillions with a substantial portion of that money leveraged in various carry trades. Chief among these was the YEN Carry trade where hedge funds borrowed sold Dollars to borrow cheap money in Japan, and then used that money to purchase assets on a leveraged basis, often in the natural resource space. Now, with hedge funds in a period of forced redemptions, a gigantic margin call of sorts have been sent out around the world, forcing these funds to unwind their leveraged trades and buy dollars to pay back their carry trade loans. As a result, the advance in the US Dollar has been driven by largely mechanical trading, and forced reversals of previously favored long positions.

The article goes pretty far as to predicting that "the turn" is pretty much imminent, but I suspect we still have a bit of time before it happens.

Anyways back on topic, the USD will tank. I'm betting on it. It won't be long till it happens, and we won't really exhaust our used car inventory and see used car prices go up at all before it happens, so prices won't really be affected :).

[rc2002]

The world is so dependent on the US economy though. Many major Asian economies have pegged their currencies to the US dollar. Others such as China and OPEC countries are holding billions/trillions of US dollars. Other economies yet, like Canada, export the majority of their goods to the US.

There aren't many that would benefit from the US dollar devaluing significantly.



As far as credit goes, with the BOC slashing rates, prime rates (and as a corollary, car loans and LOCs) will follow. Home equity makes for even cheaper and easier credit.

Good point with the toys though. In the big picture the market for impractical pleasure vehicles is probably a smaller niche than I realize.


There may be too many factors to say definitively one way or the other, but I'm predicting higher prices. Time will tell all though.

[max_boost]

Well fwiw, depends how much you read into the U.S dollar crashing but some analysts (notably James Dines) are predicting the complete collapse and devaluation of the dollar and gold to hit as high as $2500.

If you think about it, that's pretty crazy because we are talking about 1/4 of the pie here. Who knows though, anything can happen right and the impact on Canada and the rest of the world could be :eek: ^

[Xtrema]

Originally posted by richardchan2002
As far as credit goes, with the BOC slashing rates, prime rates (and as a corollary, car loans and LOCs) will follow. Home equity makes for even cheaper and easier credit.

Don't bet on it. Credit is pointless if there are no jobs.

The fall of $USD already devastated the east with all jobs leaving Canada and returning to US. If US unemployment is going to be 9% as predicted, couple with low $USD, there is no good reason to operate any sort businesses in Canada under NA free trade.

All oil companies that's not based in Calgary will start pulling ALL operations to home base to save a few bucks.

And here's the kicker, if USD devalue even more, oil price will increase and kill the US economy that's already down and out which fucks everybody in the world.

Who knows. The fact is anything that we thought won't happen did. Consumer confidence is in all time low. People who buy toys in this climate are either baller and/or ignorant. Hoping for the best, preparing for the worst.