Used Car Prices Crash To Lowest Level Since 2009 Amid Glut Of Off-Lease Supply

The U.S. auto market is at an interesting crossroads with used car prices crashing to new lows every month while new car prices continue to defy gravity courtesy of a somewhat "frothy", if not suicidal, lending market that has seemingly decided that anyone with a pulse is financially qualified for a $0 down, 0% interest, 80 month loan on a brand new $40,000 luxury vehicle of their choice. 

As the Labor Department’s consumer-price index data showed last Friday, used car prices once again dropped in July to the lowest level since the "great recession" of 2009.  In fact, since the end of 2015, the cost of used vehicles has dropped in all but three months and are now roughly 10% off their 2013 high.

Unfortunately, the outlook for the used market is only expected to get worse with the volume of lease returns expected to soar to nearly 4mm units by 2018.

Meanwhile, despite modest weakness over the past two months, new car prices have held up fairly well...

...even as the domestic auto OEM"s continue to flood dealer lots with new inventory that isn"t moving.

Of course, logic would dictate that some level of substitution would have to take over at some point as the financial benefits of buying a used car eventually outweigh the social indignity of cruising around town in a 3-year old clunker. 

That said, those innovative "Low Credit Score" discounts do make new car buying very attractive...

Car Ownership to Plummet 80% by 2030 Thanks to Self-Driving Electric Cars: Study

(ANTIMEDIA) “We are on the cusp of one of the fastest, deepest, most consequential disruptions of transportation in history. But there is nothing magical about it. This is driven by the economics.”

The man who said those words, Tony Seba, has just co-authored a new report with another man, James Arbib. Both are technology analysts, and if the predictions in their report are proven to be accurate, a monumental shift in the way human beings travel in cities is already underway.

Seba, a Stanford instructor and co-founder of the think tank RethinkX, and Arbib, a tech investor and philanthropist, say that private vehicle ownership in the U.S. will drop 80 percent by the year 2030 and that the common way to get around town will be self-driving electric cars.

Arbib and Seba also predict that the number of vehicles on U.S. roads will go from around 247 million in 2020 to around 44 million in 2030. According to the analysts, 2020 is also the year that global oil demand will peak. They predict the demand of 100 million barrels a day in 2020 will fall to 70 million barrels a day by 2030.

The analysts also predict that as people are zooming across town in self-driving electric cars, they’ll be doing so while sitting next to strangers. This “ride-share” concept is something Uber CEO Travis Kalanick considers to be the future of city transportation.

Reporting on the two analysts’ new findings, Business Insider described what such a future might look like:

“If the majority of Americans switch to autonomous, electric ride-shares, it could greatly affect how the US cities plan their streets. The report suggests that fewer cars will drive more miles by 2030, because ride-shares may never need to park. When they would drop off passengers, they would keep going to pick up new passengers, which would open up vast tracts of land for new uses, like wider sidewalks and more housing, parks, and zones where cars are banned.”

Seba and Arbib predict that by 2021, using electric ride-shares for transportation will be four to ten times cheaper per mile than buying a new car, which could translate to saving around $5,600 a year per household. That’s the “economics” Seba is talking about.

And it is, indeed, interesting. If the two men are correct, this continuing shift in the realm of transportation will have boosted Americans’ disposable income around $1 trillion by 2030.

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