Resale value - Will we see a disaster?

[xycrazy]

As we see these overly inflated prices on used cars and even new cars where dealer ask for thousands over MSRP I'm seriously wondering what it does mean for the resale value and appreciation down the road.

What do you guys think?

1. Which Trim Level (or even what specific features) will help to hold the most value?
2. Will the market continue to be crazy and given that fact the resale values in line with the craziness? Meaning we will still get more for our cars in a few years than usual? Or will we have to take very big hits, even more than usual?
3. Will the Diesel in particular hold its value and be stable? Or will the 6.2 be much more wanted since it's one of the last naturally aspirated big V8 engines?

Thoughts? Assumptions?

 

[Rocket Man]

When the chip shortage ends, all the vehicles bought at today’s inflated prices will be worth what they should have been worth, minus normal depreciation. So in other words, if you pay an inflated price, you’ll be upside down in a couple years. Way upside down. It’s not like housing where prices go up and don’t come back down. Real property increases in value over time, personal property does the opposite. There’s going to be a lot of folks that owe so much more on their loans than what their vehicles are worth that they’ll lose a ton of money if they sell.

 

[B520044]

With interest rates going up, inflation up and gas prices up; many people will be getting rid of (or not buying) big rigs for more modest haulers. So I predict that prices will fall hard (not quite yet, but 1-2 years). At least once the initial demand subside. Then reality sets in and people start to think about needs instead of wants..

I think the mid trims will hold their value, especially the ones that were able to squeeze out options during chip shortage. However, I also think the MFR's will try to keep dealer lots as lean as possible to prevent said falling prices....

I also think high gas prices are here to stay; at least for awhile. Many love the high gas prices; as a way to push us towards EV's. (my opinion; as much as I hate it)

 

[xycrazy]

With interest rates going up, inflation up and gas prices up; many people will be getting rid of (or not buying) big rigs for more modest haulers. So I predict that prices will fall hard (not quite yet, but 1-2 years). At least once the initial demand subside. Then reality sets in and people start to think about needs instead of wants..

I think the mid trims will hold their value, especially the ones that were able to squeeze out options during chip shortage. However, I also think the MFR's will try to keep dealer lots as lean as possible to prevent said falling prices....

I also think high gas prices are here to stay; at least for awhile. Many love the high gas prices; as a way to push us towards EV's. (my opinion; as much I a hate it)

Will never buy one of these EV garbage boxes! NEVER! I rather take the bus lol

 

[Seamus]

Its an easy answer. Any markup you paid is out the window and the normal market will reset. These markups are paid by people paying extra to get what they want. It does not mean the vehicle is worth more. It will not translate to value. This has been the norm for many years with markups...you pay it but the next guy won't.

 

[firsttimetahoe]

With interest rates going up, inflation up and gas prices up; many people will be getting rid of (or not buying) big rigs for more modest haulers.

If you can afford to buy a $60k full-size SUV, you really shouldn’t be worried about rising interest rates for financing or gas prices. If either of those are of any concern all of a sudden, then you’re over probably extending yourself financially. And for the people who build there car to the $70-80k+ trim level, you really really shouldn’t have to worry. Inflation will just make these more expensive over time - it’s a delayed effect. I’m sure the 2023 MSRPs will be even more.

And food for thought in regards to prices of the future - the new 2023 Seqouia is starting at $53k for the baseline model. Their top level trim is at like $69k. And that doesn’t include destination fees from where I read (tack only another 1500ish.

 

[firsttimetahoe]

As we see these overly inflated prices on used cars and even new cars where dealer ask for thousands over MSRP I'm seriously wondering what it does mean for the resale value and appreciation down the road.

What do you guys think?

1. Which Trim Level (or even what specific features) will help to hold the most value?
2. Will the market continue to be crazy and given that fact the resale values in line with the craziness? Meaning we will still get more for our cars in a few years than usual? Or will we have to take very big hits, even more than usual?
3. Will the Diesel in particular hold its value and be stable? Or will the 6.2 be much more wanted since it's one of the last naturally aspirated big V8 engines?

Thoughts? Assumptions?

I think you’re going to be fine honestly - these are pricey cars and full size SUVs are unique because people buy them knowing they’re costing more and they want a car that’s big - and outside of going up to the Escalade or Navigator route...the new Tahoes/suburbans and Yukons are close to a luxury type vehicle. Or at least I would consider them such.

I wouldn’t get used the used prices where newer-ish used cars are costing as much as new cars….but unless you throw on a ton of miles or don’t take care of it I think you’ll be in good shape

 

[B520044]

If you can afford to buy a $60k full-size SUV, you really shouldn’t be worried about rising interest rates for financing or gas prices. If either of those are of any concern all of a sudden, then you’re over probably extending yourself financially. And for the people who build there car to the $70-80k+ trim level, you really really shouldn’t have to worry. Inflation will just make these more expensive over time - it’s a delayed effect. I’m sure the 2023 MSRPs will be even more.

And food for thought in regards to prices of the future - the new 2023 Seqouia is starting at $53k for the baseline model. Their top level trim is at like $69k. And that doesn’t include destination fees from where I read (tack only another 1500ish.

Look at how the housing market works. People get into as much house a possible depending on interest rates. The same can be said for these SUVs, now that they've reached home price values... Low rates = someone paying more for full-size suv. High rates = people buy less expensive suv.

No question values will fall and the Sequoia entering the mix will assist in that fall for the GM twins. I like the Sequoia, but still love my AT4.

 

[Doubeleive]

yep and that's when I get to buy it at much more reasonable price, I never buy new I can't afford to loose 30-40k in 3-5 years, that thing would found in the woods burnt to a crisp.

 

[firsttimetahoe]

Look at how the housing market works. People get into as much house a possible depending on interest rates.

Apples and oranges, first of all. A normal person buying a car is a buying guaranteed depreciating asset over time. You really do not want to have to tap into extensive / long term financing to purchase a car you normally couldn’t afford, but the payment today looks nice because interest rates are low. By year 3, 4 and 5….your car payment will be the same as it was when your car was brand new, despite the fact the car may be worth half of its value.

Lets say I can buy a $70k Tahoe (rolling taxes, dealer fees everything into that price) at 0% financing for $0 down….for let’s say 84 months….you’re paying $833 a month for the next 7 years. By year 7 your car may only worth $35 grand. But your still paying $833 a month for that car. Which is 7 years old. Are you going to be happy that you’re still paying $833 a month 7 years later for a car that’s not worth $70k? Absolutely not.

Also - when it comes to home buying, you have to put down a downpayment, typically 20%. Sure a 3% vs 4% interest rate difference may cost you a few hundred dollars more a month over your mortgage for the next 30 years….but you still need the downpayment for a particular home value that you’re looking to afford. And need I say the obvious….I can buy a home and sell it for a profit because it may appreciate in value in 5 years. What standard car appreciates in value after 5 years.