For Sale What will a Hertz bankruptcy do to the used 200 series market??

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Year
2018
Vehicle Model
  1. 200 Series
Location
United States
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I have to think those in the market for a used 200 LC (as opposed to a 200 LX570), are pretty firmly set on that specific vehicle.

A new 2020 4runner - with TSS and Carplay) is very compelling against a similarly priced used landcruiser for almost all shoppers. If a buyer is considering the LC instead of that 4runner, it seems they must *really* appreciate and value what the Landcruiser has to offer - in which case they are unlikely to suddenly decide to pickup an ex-Hertz Nissan:)

It's likely as prices are dropping we will see more buyers shopping later model years to get the extra features - moving from the initial 200 LC, to looking at the 2013 refresh, or up to the 2016 refresh group. I doubt Hertz would dump a lot of those on the market though, but there are going to be plenty of households hurting once stimulus and unemployment runs out who may find they can no longer afford to keep their trucks.
 
I think our decision to go with an LC/LX over a 4R will be based on the fact that we hold vehicles forever - so just get what you ultimately want to begin with cause we are not trading it in 4 years from now.

Unless, someone on the dealer-side can chime in...it sounds like everyone is determining market based off asking prices. Maybe my housing comps is not the best example, but stocks work the same. There is a bid and an ask and the price of the stock is where these two meet in the middle. The wholesale auctions of LC/LX would be helpful for a baseline as nothing else seems to be a good anchor for the asking price. Confirmation of the asking price by way of a sale would be, but we do not have access to this data. So, prices are subjective and difficult to validate.

I have started to see 2013 LCs in the mid-30's in the 80k to 100k mileage range and one 2014 at $40k. Not sure if this is the COVID impact on car prices or just the natural depreciation curve.
 
From Reuters
"The size of Hertz’s lease obligations have increased as the value of vehicles declined because of the pandemic. In an attempt to appease creditors holding asset-backed securities that finance its fleet of more than 500,000 vehicles, Hertz has proposed selling more than 30,000 cars a month through the end of the year in an effort to raise around $5 billion, a person familiar with the matter said."

Not sure what 30,000 vehicles per month means in the overall scheme of things but that means that more than 180,000 used cars will be dumped on the market on the next six months. As a data point, I saw this morning that of 9 vehicles listed on the Hertz sales site in Salt Lake, 4 or them are Forerunners.

May you live in interesting times!
 
Hey guys, used car values are not declining at all, quite the contrary. I'm not saying anyone is wrong per-say from the data they are using at the time of the post. Today is 5/25/20 and this post was created 5/11/20 when the market took a huge up-turn in used car values. When the OP posted, the data available may have been accurate in terms of declining prices. Since then a few things have changed. 1) the economy is rebounding 2) dealers are running out of new cars because the plants were shut down for 6-8 weeks AND the manufactures knee jerked reacted with 0% offers and dealers thus sold most of their remaing inventory. 3) when there are no (/far fewer) new-cars on the market then prices to UP and thus used car values follow.
It will take the whole calendar year for manufacturing and suppliers to get caught back up...

As for Hertz... if they can file quickly and get their assets to auction, they may come out slimmer/stronger than before. Really don't think it will effect the market at all.
 
Eric Sarjeant said:
Hey guys, used car values are not declining at all, quite the contrary. I'm not saying anyone is wrong per-say from the data they are using at the time of the post. Today is 5/25/20 and this post was created 5/11/20 when the market took a huge up-turn in used car values. When the OP posted, the data available may have been accurate in terms of declining prices. Since then a few things have changed. 1) the economy is rebounding 2) dealers are running out of new cars because the plants were shut down for 6-8 weeks AND the manufactures knee jerked reacted with 0% offers and dealers thus sold most of their remaing inventory. 3) when there are no (/far fewer) new-cars on the market then prices to UP and thus used car values follow.
It will take the whole calendar year for manufacturing and suppliers to get caught back up...

As for Hertz... if they can file quickly and get their assets to auction, they may come out slimmer/stronger than before. Really don't think it will effect the market at all.
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Eric all due respect but you sell cars for a living. Your comments sound like a canned response that was passed out at your last sales meeting. It's like asking a realtor if it's a good time to buy a house.
1. "Economy is rebounding." - We are running at 14.7% unemployment rate in the US. The impact from this economic disaster has just barely begun to surface. You will see a record number of personal bankruptcies, auto loan defaults, mortgage defaults and business closings in the next few months.

2. "Dealers are running out of new cars.." - Dealers have plenty of cars, if they don't have the exact model you want they can get it from another dealer. The only reason dealers offered 0% interest was to keep new car prices high. We all can thank 72 and 84 month cars loans for exceptionally high (overinflated IMOP) new car prices.

3. "When there are no (/far fewer) new-cars on the market then prices to UP and thus used car values follow." - There is a huge back inventory of used cars. The dealer auction houses have been closed for months and months. They have used cars coming out of their eyeballs. They are everywhere and storing them is a huge problem here in Orange County. Now factor in air travel and car rental companies. Car rental companies are hemorrhaging money. Their business model is all based on their cars being on the road a certain amount of days per month. No one is traveling, no one is traveling anywhere in the world. If rental car companies are going to stay in business they are going to NOT buy new cars AND reduce their existing rental fleet. Both of these actions will put downward pressure on new and used car prices.
 
Newps said:
Eric all due respect but you sell cars for a living. Your comments sound like a canned response that was passed out at your last sales meeting. It's like asking a realtor if it's a good time to buy a house.
1. "Economy is rebounding." - We are running at 14.7% unemployment rate in the US. The impact from this economic disaster has just barely begun to surface. You will see a record number of personal bankruptcies, auto loan defaults, mortgage defaults and business closings in the next few months.

2. "Dealers are running out of new cars.." - Dealers have plenty of cars, if they don't have the exact model you want they can get it from another dealer. The only reason dealers offered 0% interest was to keep new car prices high. We all can thank 72 and 84 month cars loans for exceptionally high (overinflated IMOP) new car prices.

3. "When there are no (/far fewer) new-cars on the market then prices to UP and thus used car values follow." - There is a huge back inventory of used cars. The dealer auction houses have been closed for months and months. They have used cars coming out of their eyeballs. They are everywhere and storing them is a huge problem here in Orange County. Now factor in air travel and car rental companies. Car rental companies are hemorrhaging money. Their business model is all based on their cars being on the road a certain amount of days per month. No one is traveling, no one is traveling anywhere in the world. If rental car companies are going to stay in business they are going to NOT buy new cars AND reduce their existing rental fleet. Both of these actions will put downward pressure on new and used car prices.
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Right on. What do I know?
 
Newps said:
Eric all due respect but you sell cars for a living. Your comments sound like a canned response that was passed out at your last sales meeting. It's like asking a realtor if it's a good time to buy a house.
1. "Economy is rebounding." - We are running at 14.7% unemployment rate in the US. The impact from this economic disaster has just barely begun to surface. You will see a record number of personal bankruptcies, auto loan defaults, mortgage defaults and business closings in the next few months.

2. "Dealers are running out of new cars.." - Dealers have plenty of cars, if they don't have the exact model you want they can get it from another dealer. The only reason dealers offered 0% interest was to keep new car prices high. We all can thank 72 and 84 month cars loans for exceptionally high (overinflated IMOP) new car prices.

3. "When there are no (/far fewer) new-cars on the market then prices to UP and thus used car values follow." - There is a huge back inventory of used cars. The dealer auction houses have been closed for months and months. They have used cars coming out of their eyeballs. They are everywhere and storing them is a huge problem here in Orange County. Now factor in air travel and car rental companies. Car rental companies are hemorrhaging money. Their business model is all based on their cars being on the road a certain amount of days per month. No one is traveling, no one is traveling anywhere in the world. If rental car companies are going to stay in business they are going to NOT buy new cars AND reduce their existing rental fleet. Both of these actions will put downward pressure on new and used car prices.
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I answered a question that was specifically asked to me and strait forward and truthful as I could. I don't necessarily appreciate you putting down my career choice, but I do value your thoughts, although I would disagree on every point.
 
I tried to trade my wife's old F150 for a 3 year old explorer at that national chain of falsely inflated fixed pricing. Trust me I've tried and tried to talk her out of this particular choice. Anyway the point is we were offered 30 percent less on our trade in vs pre covid offer and the vehicle we tried hard to buy was priced up by 1k . Moral of the story for me? If you're a regular Joe selling a used vehicle you will be told it's newly worthless because of the pandemic and if you're buying you will be told the opposite. What's new in car sales really? It's the same game on different days that's all
 
Eric Sarjeant said:
I answered a question that was specifically asked to me and strait forward and truthful as I could. I don't necessarily appreciate you putting down my career choice, but I do value your thoughts, although I would disagree on every point.
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Eric there is nothing wrong with selling cars. It is an extremely difficult job with long hours, and pressure from all sides (customer and management). My point being, you can not help but be biased. Whether it is conscious or subconscious you will look at information differently. No different than a realtor, it's always a good time to buy. They can't help themselves, it's in their self interest.

I tried to be very factual with my response. The data is the data, we will not return to where we left off economically speaking. Automakers and dealers are trying to do everything possible to keep their car prices high and their fat (IMOP) profitability. Once the consumer smells blood in the water, the dealer's will lose their negotiating strength. Right now it's a staring contest. Consumer confidence is at a 6 years low but going up...:). Who do you think is going to blink first? The person who has to sell to stay in business vs the person who wants a shiny new toy?
 
Newps said:
Eric there is nothing wrong with selling cars. It is an extremely difficult job with long hours, and pressure from all sides (customer and management). My point being, you can not help but be biased.
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I know there is nothing wrong with selling cars. But your demeanor suggested otherwise. I don't care if your a priest, teacher, or whatever. Every industry has negative stigmas associated with it. I think it shows lack of character implying you are better someone because of what you do for a living.

I may be bias (I don't think I am) I'll give you that, but it doesn't change the facts of basic economics. Supply and demand is indifferent from industry to industry. When dealers don't have vehicles (supply goes down) then prices will go up (because demand goes up).

So here is why I am saying this:
One an average month of May I would have over 650 new vehicles in stock (with 11 -12 Land Cruisers). Right now I have 252 new vehicles in ground stock (5 Land Cruisers - 4 of which are sold pending build completion). Point being.. who that is 60% down in inventory would start cutting priced or take unfair offers? I don't know where you are getting your information from but I would carefully select your sources and dates of those source before pretending to be an expert.

You mention "the only reason dealers offer 0% was to keep new car priced high". First, dealers don't have any say who gets 0%, the manufacture does. Secondly, that doesn't make sense on any level. 0% APR is a tool to sell slow moving vehicles..

You say that there is a huge "back log" of used car inventory because auctions have been shut down. Although true physical auctions were/are shut down, online auctions have only increased in popularity. I'm not in charge of vehicle supply management nor privy to all manufactures, but I would guess that Toyota sells 99.9% of it's wholesale (off-lease, demos, etc.) via online auction even pre-COVID19. So not that it is 99.999% that doesn't add cause to your point. The only cars that would be sitting at physical auction are the worst of the worst crap piles out there that most franchise dealers would not be selling anyway.

Back to the OP thread title: how does Hertz effect this.... My opinion is ZERO. Hertz failed because they had 25 billion in debt. If it wasn't COVID19, it would have been something else eventually. This is what happens the company is relies on accounting and consolidation to keep quarterly earnings statements high for shareholders.
 
Eric there is so much miss information in your last post honestly it’s a waist of time to engage you. Let’s just go with the obvious. The only reason you are on here is to sell cars. You are not on here on for any altruistic motivations.
On-line auctions....really...ha...ha...ha...that one is hilarious..;).
 
Newps said:
Eric there is so much miss information in your last post honestly it’s a waist of time to engage you.
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I feel the same. I’m done
 
After purchasing 3 vehicles from @Eric Sarjeant over the past several years, I will tell you that there is at least an order of magnitude less of the typical dealer bull**** from Ed Martin toyota. If you want a straight shooter on a question regarding new or late model land cruiser sales, you won't find a more reliable source. Since that was the point of this post, @Newps you might want to lay off a touch.
 
I can believe that Hertz wouldn’t affect the used land cruiser 200 market but I’ve been looking at lincoln navigators and lexus lx570 since march and prices tanked. A 2019 navigator could not be found for under $60k online. Now they dip below $50k. Lx570 prices are not as affected but they were much harder to find, someone who was looking for a 2013 can look at a 2015 now on the same budget.
 
pcut said:
Cygnus- Since you keep such a close eye on LCs, keep your eye out for a white/grey/sliver '18 with terra interior, below 20,000 miles in the low $60s. Preferably west coast/texas/southern states. Willing to wait and travel or ship.
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I do not have any insight on LCs priced that high. Way beyond my budget.

I will keep an eye out for you though brother as I do see sponsored listings for that high of a price when I am looking in my 25k range.
 
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