Used Car Market: Big Tex Spoke Right on Cue
For regulars of the Real Deal program , you’ve heard my story about Big Tex at the State Fair. Quick recap: Every year at Tx state fair time, Big Tex’s first words are a signal to ALL car dealers (moreso wholesalers) that you need to sell your inventory NOW, like yesterday now, bc the used car flop is supposed to happen any minute now. The Flop is when the used market drastically adjusts to make room for the first set of next years model rent cars to come into market out of service, winter sales slowdown, and some weird enigma mental thing (don’t ask me). Anywho, Big Tex spoke 10 days ago in warm up, and I’ll be damned if the used market didn’t start to crash out last week. Then today, at Dallas Auto Auction, THE AUCTION in the US that sets the tone, the market maker auction. The wheels came off, just BOOM BANG, thar she blows.
From the view of a wholsaler, let’s use this analogy. Your a day stock day trader. You have a half million dollar position in the market that you plan to hold for four days, and the DOW drops 5,000 points. The difference here is that you don’t HAVE to sell your stock at the exchange. When the auction market crashes out on a car dealer, they just pick up their toys and go elsewhere. They frantically start hand selling their inventory to dealers out of state, or that don’t frequent the auctions. They do this simply, bc those dealers are unaware the market just took a nose dive. The used car market doesn’t have a section in the WSJ, so it’s still a ‘in the know’ situation.
I forcasted this two months ago, many said the flop would not occur this year bc of supernatural disruptions in the new car supply chain. They were wrong, we were right, Big Tex spoke again this year, and the first thing out of his mouth was “Sorry Podna, butyour shit aint worth what it was worth yesterday“