In the post-pandemic climate, where we have to deal with inflation and even worse matters, estimating the price of new and used vehicles is as complicated as it gets. Influent YouTubers Doug DeMuro and JayEmm on Cars have recently released videos that essentially state the market is going down abruptly. However, a third YouTuber, Four Wheel Trader, contradicts them. While his audience is considerably smaller, he has solid data to back his claim that the car market is not crashing.
Four Wheel Trader‘s video is, as he clearly states, a reaction to JayEmm on Cars‘ Get Out While You Can! The Crazy PORSCHE Market is Officially FINISHED – Here’s The PROOF video and Doug DeMuro‘s The Market Is Finally Really Actually Slowing Down clip.
Now, while Doug DeMuro, who owns the Cars & Bids online auction platform, discusses the US market, JayEmm on Cars covers the UK, but since many people wonder if his conclusion also applies to the US, their similar opinions were brought together. And Four Wheel Trader brings along US sales and inventory data to back up his claim.
In essence, all three YouTubers agree that the pandemic brought a surge in car prices, a trend that was predictably followed by a massive decline. However, according to Four Wheel Trader, while car prices did take a serious fall after topping out in 2022, they have been relatively stable in the last six months.
In his view, the car market has already declined and we are now in a relatively stable period, so there’s no reason to believe a fall is coming and, for instance, rush to sell your car.
How to evaluate a car market, stable or not: prices, supply (inventory) and demand (time cars spend on dealer lots)
Four Wheel Trader brings data for prices of the Porsche 911 and even the Toyota Land Cruiser, while also covering many other models on the market. So, between November 2022 and November 2023, car prices in the US have seen an average decrease of 7.6%, with most vehicles losing between 3.4 and 11.6% of their value. According to the vlogger, this means cars are currently depreciating at normal levels, or, better said, at pre-pandemic levels.
Another aspect you need to cover when evaluating the car market is supply. However, the number of cars dealers get needs to be corroborated with demand. And while we can’t gauge demand directly, we can deduce this based on the time cars spend on dealer lots. A high turnover means scarcity is high (think: cars are selling quickly), while a low turnover involves cars spending a lot of time on dealer lots, which drives the prices down.
The YouTuber claiming that the car market is stable in 2023 also corroborates his data with the Hagerty Market Rating. The latter conveys the classic collectible car market performance as a number between 0 and 100: the higher the number, the hotter the market. While this index reached a record level in the summer of 2022, it’s been declining ever since, but it approximately matches the sales trends quoted by the YouTuber and therefore backs up his conclusion that the market is pretty much stable right now.
Another interesting observation he makes is that if we adjust the current car prices for inflation, these are mostly around pre-pandemic levels, so they haven’t increased as much as one might perceive.
Predictions for the 2024 car market in the US: depreciation at normal (pre-pandemic) levels
For a 2024 prediction, Four Wheel Trader lists a decreasing inflation and expects the Fed to deliver a small decrease in the interest rate, while also observing that car loan defaults are relatively loan. Based on these factors, he states that a scenario where the market remains relatively stable seems more likely than one involving a market crash.
So the YouTuber expects vehicles to depreciate at pre-pandemic levels, with EVs being hit quite hard and arguably making for the most notable exception. And, quite unsurprisingly, the Porsche Taycan is one of the exceptions to this exception, having held its value better than most of its battery-powered peers.