[parkingrift]

Pardon my ignorance, but why would used car prices necessarily impact a used car dealer? Surely these dealers have to pay more to buy these cars and so their margins should be unchanged? Or is the issue that they are buying used cars and prices are falling so fast that their margins are shrinking?

[rhino369]

Because they need to keep the cars on their lots on their books. If car prices drop 25% they lost 25% of the value of their inventory.

Not that car values have crashed 25% or will.

[twblalock]

I bet they will crash 25%. On the wholesale market, that might have already happened.

I was seeing 20-year-old Ford Rangers and Chevy S-10s with 200k miles listed on Craigslist for $10k a month ago. If you adjust for inflation that is actually more than they cost when they were new! Pick pretty much any make and model of car and you will see the same thing.

Even just from looking at Craigslist occasionally I have noticed a significant drop in prices for used vehicles in the past month.

[shaburn]

Supposedly Carvana went crazy and overbid everyone for cars sight unseen online. This massive inventory is now depreciating at full percentage points on a weekly basis with volume way down.

[twblalock]

They will lose money if used car prices drop because they will have to sell their inventory for less than they paid for it.