USED CAR PRICES PLUMMET! Dealers Will Take MAJOR LOSSES!

Summary

The used car market is crashing as wholesale prices plummet. Sellers are refusing to lower prices, leading to a massive increase in no-sale vehicles at dealer auctions. An auctioneer warns sellers to lower prices or their cars will be towed. Despite extremely high mileage, vehicles like a Toyota Sienna van with 576,000 miles still won't sell. An F-150 with 129,000 miles drops from $25,000 to $15,000 with no bids until it sells for just $15,500. Sellers are in denial as auction prices show the market crashing, but more declines are coming when they finally relent and sell their cars at real market value.

Takeaways

• 😬 There is a massive problem in the used car market with 'no sales', where sellers reject bids that are too far below their asking price.
• 😟 Wholesale used car prices are dropping very quickly as sellers fail to align with the market downtrend.
• 😠 Auction owners are getting frustrated with cars not selling after 3+ weeks and are threatening to tow unsold vehicles off the lot.
• 😳 Some vehicles are getting no bids even after huge price drops, like a 2017 F-150 starting at $25k and dropping to $15k with no bids.
• 😖 Many repossessed vehicles have mechanical issues since owners stop paying when something goes wrong and they can't afford repairs.
• 😕 A 10 year old Jeep with 97k miles looks decent outside but has water damage inside that hurt the sale price.
• 😢 Sellers continue to reject fair bids hoping for a 'magical buyer' who will overpay, but these buyers don't exist.
• 🙄 Franchise dealers are sending near new vehicles to auction instead of retailing them without clear explanation.
• 😐 Cosmetic issues like torn seats and trash lower sale prices, but mechanical issues are worse.
• 😞 Sellers need to accept the falling market prices and sell their vehicles now before it crashes further.

Q & A

Why are no sales a big problem at used car auctions?

No sales indicate that sellers are not willing to drop prices to match current wholesale market rates. This means sold prices are artificially high right now. When sellers finally start selling at true market prices, there could be a crash in wholesale values.

What is contributing to the downtrend in wholesale used car prices?

Growing gaps between seller asking prices and what dealers are willing to pay at auctions. As this gap widens, more no sales occur, delaying true price discovery in the market.

Why did the auction owner threaten to tow unsold vehicles?

The auction owner wants to encourage sellers to adjust prices and sell vehicles rather than let them sit unsold for weeks taking up parking space. This indicates growing frustration with lack of sales.

What issues were seen with the Ford F-150 at the auction?

The 2017 F-150 had no bidders despite good exterior condition. However, dirty, stained interior likely hurt value. Went unsold even at a huge discount to $15,000 asking price.

What mechanical issues are common with repossessed vehicles?

Repossessed vehicles often have undisclosed mechanical defects since financially struggling owners cannot afford repairs. This was seen with multiple vehicles noted to have 'bad motors'.

What happened to the paint on the Tahoe with 999,000 miles?

The Tahoe's hood and sides were covered in fine scratches, likely from driving through overgrown vegetation. This required a hood replacement and paint work.

Why was there water damage in the 2013 Jeep Wrangler?

The Jeep seemed to take on water damage after its windows were left open during heavy rain while staged for auction the previous week.

Why would a near-new 2021 Cadillac be sold at this auction?

It is unclear why this vehicle was wholesaled. The selling franchise dealer likely could have retailed it successfully rather than trading it in.

What was the outcome of the call made on the Cadillac after no sale?

There was likely no deal reached in the follow-up call, given the comment about 'probably not getting it done' regarding final negotiation.

What advice does the video narrator offer to used car dealers?

He strongly advises dealers to sell down inventory immediately rather than wait for the market to rebound. Prices are in a downtrend and holding cars is risky.

Outlines

00:00

😡 Auctioneer telling sellers to lower prices and sell cars

The auctioneer came on the microphone and told sellers to lower their prices and sell their cars that have been sitting at the auction for weeks without selling. He said it's not a parking lot and they need to sell the cars at current market prices which are much lower than sellers want.

05:01

😃 Auctioneer says auction not a parking lot for no-sale cars

The auctioneer made an announcement that if cars don't sell after running for 3 weeks, they will be towed off the auction lot. He said they need to move inventory quickly, and it's not a parking lot for sellers to keep running no-sale cars week after week.

10:01

😕 2017 Ford F-150 with 129k miles gets no bids

A 2017 Ford F-150 with 129,000 miles and an EcoBoost engine came through the auction. The outside looked good but the inside was dirty with bad seat covers. The seller dropped the price from $25k down to $15k with no bids until $15k when it got one bid but probably didn't sell.

15:02

😀 Two repossessed cars noted as having engine issues

Two repossessed cars came through the auction, a Hyundai and an Elantra, both noted as having engine issues. Repos often have mechanical problems because owners stop paying when issues arise since they can't afford repairs.

😲 2017 Chevy Tahoe with 999k miles sells for $23k

A 2017 Chevy Tahoe with 999,000 miles came through the auction in okay condition except the hood was badly scratched. The seller started at $30k and it sold for $23k with the high mileage and hood damage.

Keywords

💡wholesale

Wholesale refers to the cars being sold at dealer-only auctions before they are sold to retail customers. It provides insight into overall market pricing trends. The video discusses how wholesale prices are crashing quickly but sellers aren't lowering prices fast enough, leading to lots of no sales.

💡no sales

No sales occur when the seller's reserve price is higher than what buyers are willing to pay at auction. This signals that wholesale prices are dropping faster than sellers are willing to accept.

💡tip of the iceberg

This refers to the current visible wholesale price drops being just a small indication of the much larger crash still to come. As more sellers start accepting lower prices, the market will see an even bigger crash.

💡parking lot

The auction owner says they don't want cars sitting on the lot for weeks without selling. The auctions need inventory turnover and aren't just parking lots for sellers unwilling to lower prices.

💡first money best money

This principle states that cars tend to sell for the highest price the first time they run at auction. Sellers are overly optimistic in thinking they'll get a better price if they wait.

💡burn them

To "burn" cars refers to auction houses quickly selling through their inventory. Sitting on cars for long periods goes against their business model.

💡mechanical issues

Repossessed cars often have mechanical problems because consumers stop making payments once critical repairs are needed that they can't afford.

💡buy here pay here

Buy Here Pay Here dealers provide loans directly to subprime borrowers at high interest rates. They subsequently handle a lot of repossessions when these loans default.

💡cosmetic issues

Besides mechanical problems, repossessed cars also tend to have cosmetic wear and tear issues since subprime borrowers are less likely to properly maintain vehicles.

💡franchise dealers

The video calls out franchise dealers for being slow to lower their valuations and recommends they sell cars quicker. Franchise dealers have retail lot overhead that auctions lack.

Highlights

Wholesale used car prices are crashing as sellers refuse to lower prices despite lack of bids.

Only sold cars are reported, obscuring the full picture of crashing used car wholesale prices.

Once sellers start accepting lower bids, there will be a massive crash in wholesale used car prices.

Auction owners are telling sellers to remove unsold cars that have sat for weeks, as auctions are not parking lots.

Buy Here Pay Here dealers say consumers either pay for repairs or make payments, but not both.

Mechanical issues are common in repossessed cars since owners stop paying when repairs are needed.

A 2017 Tahoe with heavy hood scratches still fetched bids up to $23,000 and sold.

A 2013 Jeep Wrangler Sahara with water damage inside sold for $15,100.

A near-new 2021 Cadillac with 39,000 miles surprisingly went to auction but only sold for $21,000.

Wholesale prices are detached from retail as dealers avoid auction and sell from inventory.

New car inventory will continue growing as factories produce more than markets can absorb.

Dealers should sell used inventory now before price drops rather than hold out hoping for more.

Franchise dealers must lower used car prices along with the crashing wholesale market.

The used car bubble is popping as wholesale prices show the market downturn.

Sellers clinging to high asking prices are denial about the used car market correction underway.

Transcripts

I'm a used car dealer and this this is a

used car dealer auction sell time sell

time let's go I'm gonna take you in

there with

me that's the van with half a million

miles another no sale from last week

half the seat's

missing Fender Well's missing yep they

need 5500 bucks for it terrible I'm

trying to help you look we're seeing it

the prices aren't getting better sell

your

cars I've never heard an auction put

that forward to uh to some of these

sellers out

here all right I guess we're forming a

new storyline on this van that's the van

with half a million miles it's up to

$2,700 it brought like 4 grand before

they didn't sell it or like $3500 they

didn't sell

it it brought $3,100 this time put on a

phone call so$ 4,000 like 3,800 35 500

now 3100 keeps going down continue to no

sell that's a problem half a million

miles half a million miles they're not

selling it what are they thinking so we

have a massive massive problem in the

car market right now and it's it's at

these used car dealer auctions and it's

in the form of no sales what a no sale

is is when a car goes through the lane

goes through the auction and it gets

bids but it doesn't go up to the reserve

or the amount that a seller actually

wants for the car

and they're so far apart that the seller

is just like no we we just we can't do

it so they don't put the deal together

and the reason why this is such a big

problem is because the wholesale Market

is going down in such a quick way right

now that sellers aren't able to to catch

up and why it's a big problem too is

because we're just seeing the tip of the

iceberg of these these downtrends and

the wholesale numbers because the only

numbers that you're seeing coming

through the system are sold units and

why this is such a big problem is

because it's just the tip of the iceberg

cuz what we're seeing in this wholesale

data when these numbers are getting

crushed week after week after week is

that we're only seeing sold units so

what that leads me to believe is that

when these sellers actually come to and

say okay the market is moving down and

they actually start selling these cars

for what the bids are bringing then

you're going to get this massive whoosh

down in uh in the wholesale numbers even

more than we're seeing right now because

they're actually going to sell these

units and they're going to sell them for

what dealers will pay and what dealers

will pay right now is way less than what

these sellers want and that's why you're

seeing wholesale numbers go down but

you're not seeing them crash like

overnight yet but whenever these sellers

come to and they start actually selling

the units what these dealers are willing

to pay is is going to equate in a in a

crash of wholesale values and it's going

to happen overnight and these sellers

are have to come to they got to get in

front of it all right I always like to

check these forerunners when I see them

uh even if they're very rough and this

one's very very very rough just so we

can get a uh a a pulse on the 4Runner um

environment Market whatever you want to

say it's a 2003 it's got 178,000 Mi and

it's rough all right here's that 4Runner

trying to get $3,000 oh they got bids

they got bids 3,000 31 32 3300 saw that

other side see up there at the top

that's uh that's very very very rough

door panel is off

crusted starting so this this thing's

this thing's pretty bad rolling out

still been on it up to

$3,600 37 38 even in this condition and

it is really bad condition my goodness

tour up

seat trash everywhere oh but you know

what if you buy if you buy this 4Runner

you can own all of this as well so it

can all be yours I don't even see let's

see here bottle opener looks like pocket

knife

oh there we go here's the prize there's

the prize right here Willie and family

live that's what you get you get all

that if you buy this there you go you

know what I'm going to have to we're

going to have to bid on this one now I

can't I can't pass up the the will and

family all right so we'll we'll check

this out it's a it's a it's a

4Runner it's not here but they're still

been on it up to $4,000 oh no yeah

$4,000

got $4,000 the seller's just shaking his

head

no that thing's tore apart and they're

turning down $4,000 takes $5,500 oh my

goodness takes $5,500 to buy

it half the seat's

missing Fender Well's missing yep they

need 5,500 bucks for it terrible and I

really hope you franchise managers are

are watching this video I'm trying to

help you look we're seeing it the prices

aren't getting better sell your cars

sell them stop holding on to them

Market's not getting better sell your

cars all right I got a minute I want to

talk about something real quick we just

had a nail SMI Inside by uh one of the

auction owners and uh he came on the mic

and said look guys if you've had a car

and it's ran here for more than 3 weeks

we don't want it here anymore you need

to get it off we're going to we're going

to tow them off the auction lot because

we are not going to continue to run cars

that are not going to sell I've never

heard an auction actually put that

forward to uh to some of these sellers

out here and it's great to hear because

yeah a lot of these cars have been

running four five six weeks in a row and

no sell no sell no sell no sell it's

because these sellers they're not

wanting to move with the market but you

know what if a lot of these auctions

come to these sellers and say look if

you're not going to sell the car when

the Market's going down they know these

these auction owners these auctioneers

they know that how the auction works

first money best money when the car runs

through the first time it's going to

bring the highest amount of money that's

going to bring and there's no special

buyer special bidder that's going to

step in and give more money for this car

later on uh weeks later so these these

auctioneers these auction owners they

want these uh these cars out of here

they got to turn they got to burn them

that's what they do they do quantity

they have to move these cars if they

have to come on the mic and make that

announcement and tell these sellers to

get these cars out of here it's not a

parking lot that's what he used he said

this is not a parking lot bring your

cars here you got to sell them and if

they have to come onto the can say that

it's bad and I've been talking about

this for weeks no sell no sell no sell

no sell this Market's moving it's moving

down and these sellers they have to

realize it if they don't they're going

to get these cars towed cuz it's not a

parking lot you got to sell these cars

it's not a parking lot have you ever

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travels online all right I've shown this

Toyota Sienna for the last couple weeks

this thing's got

576,000 miles on it it's ran here now I

think 4 weeks in a row and they keep no

selling it I do not understand what

these sellers are doing because that van

that van's not just going to magically

bring more money at the longer that it

sits here it's going to bring less money

but they still don't want to sell it

they're waiting for that magical buyer

that's going to come along and say yes

yes this is what I wanted I wanted I've

been looking my whole life for a Toyota

Sienna with half a million miles and I'm

not complete until I can find this van

that's what these sellers are waiting

for and they're not going to find it

that person does not exist that dealer

does not exist we don't want a van with

576,000 Mi just sell it sell it stop no

selling it sell it move it get rid of it

prices are coming down get with the

program all right we definitely got to

check this one is a 2017 F-150 he's got

129,000 Mi all right here's the F-150

trying to start at $25,000 no bids it's

a XLT and the body looks good it's got

the EcoBoost on it um

FX4 there we go yeah outside body looks

really good on it let's check for rust

though let's see here oh actually they

don't see a whole lot of rust dropped

down to $24,000 still got no bids down

to

23,500 still no bids dropped it down to

$23,000 still nobody interested down to

22 Grand now

inside looks pretty good I don't know

why they put these seat it drives me

crazy they put these nasty seat covers

on this truck when the seat's actually

pretty good uh a little bit of stained

and that's gross uh back seats okay

dirty needs to be cleaned up uh outside

on this truck definitely looks way

better than the inside so just remember

that when we're watching it go through

but we'll check it see what it

brings all right down to

21,500 still no bids 21,000 keep

dropping it down nobody wants it

auctioneers asking if anybody even wants

it they might just send it

out all right dropped it all the way

down to $115,000 not sure if they've got

a bit or not all right we got one bit at

$155,000 and uh probably going to No

sell put on an if but probably probably

no sell all right here we go we got got

this Hyundai say engine rattle I think I

think this comes pre-loaded in a lot of

these accents the elantas and then we

got one right here it says bad motor so

these are both repossessed cars let me

check y both repos so along with

cosmetic issues that you're going to see

with a lot of these repos what you see

more is actually mechanical issues

because once someone uh figures out that

hey this motor's going bad if the

transmission slipping if um if even

something small is like motor mounts or

or sensors uh the consumers they they

don't have the money to pay for it to

get it fixed so they just stop paying

their bills and there's a saying that

comes along with a lot of these Buy Here

Pay Here dealers that actually do a lot

of repossessions is that consumers they

have they have uh holding up two fingers

they have money to do one thing they can

either make their payment or they can

fix the car but they don't have money to

do both so if the car goes bad while

it's still um under this loan and while

the customer is still paying for the car

uh through this Buy Here Pay Here lot

through a a bank whatever these these

consumers they're they're going to stop

paying for it if something goes wrong in

the car because they don't have the

money to fix it all right here's a good

one for us to check it's a

2017 Tahoe it's got 999,000 miles on

it all right here's the Tahoe trying to

start at $30,000 got no

biders dropped it down to 29,000 still

no biders uh outside body actually

there's tons of scratches look at all

the scratches how does that happen see

all up the the side I it's up and down

it's it's not deep enough to say it's

been keyed and also too many I mean if

somebody if somebody keyed this thing

then they were really mad that's a

that's a relationship going horribly

wrong if that's Keen but I don't I don't

think it's been key because the

scratches aren't deep enough looks like

almost it went under a bunch of trees um

they went through the woods or something

like that that's that's probably what

happened went through the woods but um

other than that the body looks okay I

mean the rims look like them being

curved and hit a few times I don't see

really anything else that's alarm it's

just that this that Hood's going to have

to be replaced I would assume maybe they

can paint over it uh that's just dirt so

that's that's not a big deal it's just

that that hood somebody tell me what

happened there dropped it all the way

down to $23,000 they got bids now so

they're rolling it

out

23 got one bid at

$23,000 rolling now we still bidding on

it all right inside inside driver seat

looks good little messed up right there

somebody's Old McDonald's is sitting

right there but um overall nothing looks

broken or misplaced um little dirty a

little dirty but just overall not great

but we'll go inside and see what it

brings asking for biders at $23,000

was only one B at $23,000 asking the

seller what they'll take 25 Grand Is

What It Takes bidder offer

$24,000 all right they couldn't come

together they're about $1,000 apart they

just no

all all right let's check this Wrangler

it's a 2013 it's got 97,000 miles it's a

Sahara all right trying to start off at

$119,000 no bids dropped it down to $185

all the way down to 18,000 still no bids

trail rated all the goodies that stuff

outside body is okay I mean when you're

getting a Jeep that's almost 10 years

old actually it is 10 year old 10 years

old at this point you're going to have

some scratches you're going to have some

dings here and there but uh overall for

a Jeep that's 10 years older it actually

looks pretty good uh paint still good we

still got scratches here and there here

and there it's going to happen all the

way down to $14,000 we got a bid now we

got a bid all right

inside inside rough oh we got lots of

water pulling right there I wonder if

it's leaking or if a window is left

open uh I want to say hopefully the the

window was left open I think that's the

case CU it's on it's on both sides so um

probably last auction that went through

we had a bunch of rain come through

after the last auction the windows were

probably left down and this one was

probably a no sell and that's how all

this water got into it um that would be

my hope for whoever is going to be

buying next yeah cuz you got water back

here too it doesn't look like no the I

don't think we got any leakage up here

at all so yeah that's what that's what

happened the uh windows were left down

and now there's water all in it but

there you go we'll go inside check to

see what this

brings all right it's rolling out but

we're still going to bid on it all right

got bids coming in now on that jeep it's

already rolled out up to

14,500 up to 14,800 on that

jeep so they've got this Escalade kind

of pulled back a little bit it's because

they're letting the biders know that

we're still on the

Jeep up to

15,100 got

15,100 and he's going to put on if

didn't sell it in the lane going to put

on a phone call

all right we'll definitely check this

out this is a Cadillac it's a 2021 I

actually don't know what model this is

so somebody put it down I looked on the

back there's no badge so somebody put it

in the comments what this actually is

all right here's the caddy he's trying

to start off at

$35,000 no bids dropped it down to

$31,000 still no bids I'm surprised that

this car is at this auction I would

assume the franchise dealer that traded

this in they would want to retail it um

on their they're a lot but they they did

not but the outside looks great down to

30,000 all the way down to

$20,000 nobody bid all right we got bids

coming in $22,000 right now all right

inside as you would expect looks like a

brand new car um very very clean looks

good um so yeah let's see what this

brings inside that should bring all the

money and then some I like that pattern

on um just because it's a it's a very

nice car and I'm I'm very curious to

know why it's here and we can't know but

it always makes me think whenever I see

like a 2021 car with 39,000 mil very

interesting to me up to

20,500 7 now 21 up to

21,000 it only brought

$2,750 and they put on a phone call

probably not getting it

done so um

whenever okay let me think we're going

so I always like the

no probably could have gotten the no

let's start this whole thing over again

bidder and the seller are after the sale

man I'm this is just not

happening