Does that specifically mean the weak margins on new EVs? Why is it low then—is tough competition from China forcing the entire chain to settle for lower margins? Or just generally weak demand, where margins stay low with low volume and large “glass palaces” (expensive showrooms)?
Unrelated to that, I’m quite confused by this discussion—is there currently an oversupply of used cars (tough competition) or an undersupply (new cars aren’t selling, so no trade-ins are coming onto the market)?
It’s starting to feel like the used car trade won’t be profitable under any circumstances. Isn’t the problem, however, that people aren’t changing cars as often as the current competitive situation would require? So the situation will be corrected either by people starting to change cars more frequently or by some companies simply going out of business. Waiting for that, then.
There are surely many reasons for the stagnation; when consumer confidence is low, people make do with their old car for “one more” year—car fever subsides remarkably when the wallet is thin.
Then at least for EVs, the value has dropped so quickly that if it was bought with debt, the trade-in value might be lower than the remaining loan balance; in that case, of course, no deal happens.
Personally, I believe that switching to electric driving might boost trade a bit; you can already get quite decent used EVs for under 20k now.
As a separate comment, the car trade and its interest groups keep carrying on about how new car sales must be boosted or there won’t be good used cars for lower-income people. I would say we’ll definitely manage with 2-x year old used cars imported from Europe; the new car buzz disappears in a couple of weeks anyway, and car safety or fuel economy no longer improves at a significant rate.