Thankfully, most cars are no longer selling/leasing at MSRP+. However, the increase in interest rates is raising costs for most customers. Even if lease customers stay with the same vehicle, they are likely looking at a payment increase that is significant - 20% or greater increase.
In the meantime, used vehicle prices continue to slide. Check out the link below. This 2022 BMW 750 Xdrive has been on this dealers lot for 3.5 months. The price is now $19K less than it was when first offered for sale, on 9/11/22. Now, I would ASSUME (I know I shouldn’t) that the dealer is “underwater” on this car, as I doubt it was purchased for less than $75K in August or September. How the heck does the salesperson get paid if the dealership is into a car for more than it is selling for?
2022 BMW 7 Series 750i xDrive for sale in Delray Beach, FL - CARFAX
Does anyone think that 1 or 2 year old used cars may offer the best relative value, for purchasing this spring? It seems to me that used vehicle prices shot up in value to unprecedented levels, and now they are dropping, and they will likely overshoot the true value to the downside, briefly.
I have read about Carvana and the problems they are having. It seems to me that NEW car dealers do not have this problem because used cars make up a smaller percentage of revenue at a new car dealer. However, maybe someone with more experience can educate me about how car dealers are dealing with the swings in value/price.
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