If you’re in the market for a new car you should probably hit the brake pedal. That’s what one car dealer is telling his TikTok followers. According to him, the bottom of the market is just about to fall out and you’ll be better off waiting for the much lower prices that he claims are right around the corner.
@the_richest_cardealer If you are looking to buy a car, watch this video. Hit that follow button for more. @Str8_Rrrussian whatchu think? #cars #car #vehicle #dealership #owner #joblife #entrepreneur #repo #informational #waitforit ♬ original sound – Omar Afaneh
“If you’re looking to buy a car, just wait. The market is about to crash and no one can tell me I’m wrong,” Omar Afaneh (@the_richest_cardealer) tells potential buyers in a TikTok he posted four days ago. In the clip, which currently has 1.4 million views, Afaneh warns that an influx of repossessed autos currently flooding the market is a sure indicator that the car sales market is close to bottoming out.
“When a company repos a car, they send it to auction to try and recoup some of the money that’s owed on that vehicle,” he says.
He goes on to explain that many people bought cars using stimulus money during the COVID-19 pandemic at inflated prices resulting in negative equity.
“Like, a lot of negative equity,” he adds. “From the car being overpriced, interest rates and a low a** down payment.”
Now that market prices are coming down, Afaneh claims many people are simply refusing to pay their inflated monthly car payments, which has caused an increase in cars being repossessed.
“What that’s done is, it’s created an influx of cars at the auction. Cars that people like me don’t want to overpay for. There’s a reason my lot is half empty,” he explains to his viewers, saying that he is unwilling to pay the inflated auction prices.
The result is a market flooded with cars that finance companies have not been able to offload to dealers at auction. “Mark my words,” Afaneh says, “In the next six months to a year car prices are going to drop.”
At least one of Afaneh’s viewers backed up his claims. They commented, “He is telling the truth I work in car finance. I’m a manager, lots of people cannot pay. Just wait until end of January. END OF MONTH.”
Other viewers were grateful that they had managed to get a car before the pandemic drove market prices up.
“The more I hear about this, the more I feel like I got lucky back in 2019 when I got my car. 2020 Toyota with 2.9% apr,” one viewer wrote.
“Every time I think I want a new car I take a look at my 2012 mazda 3 with no car payments and talk myself out of a new one….” another added.
Afaneh didn’t manage to convince all his viewers though. One brought up the ongoing United Auto Workers strike, and was convinced it would go on long enough to affect the market. “UAW is on strike, I’m pretty sure the used car market is about to explode again.”
Afaneh still advised caution though. “I would wait. At least a few months,” he tells viewers at the video’s end. “The repos keep coming.”
The Daily Dot has reached out to Afaneh via TikTok comment for further information.
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Source: https://www.dailydot.com/news/car-market-about-to-crash/