So I'm taking an economics class and we were going over a 'supply and demand' concept. Basically the way I understand it, the more people want something, the higher the price goes, until more of that thing is made and sold, and then the price falls. It's a strict law of nature that if less people want something the price will go down, and if more people want something the price goes up.
I'm thinking about it, and I'm thinking this could be applied to the new car market. Everyone bitches that new cars undergo horrible loss in value when you buy them, right? A 30k car could turn into a 20k car the second it leaves the dealer's lot. That's a huge amount of money just totally vanished and removed from the economy forever, and it's the reason why it's a better idea to always buy used.
What if everyone collectively decided to not buy cars for a few months? By law the price of new cars will go down, and eventually it'll get to the point where a new car could be at the price of a used car, and at that point everyone could just buy the new cars at used prices and avoid the depreciation hit. This way, everyone saves some money and it's not removed from the economy. Any thoughts?
>>14906331
this is entirely true. look at the results cash for clunkers had on the used car market for 2009 through 2013 or 2014 or so. it took years for the mega cheap used car market to come back because the majority of the supply was decreased while demand for cheap cars actually increased on account of the economy being fukt.
>What if everyone collectively decided to not buy cars for a few months? By law the price of new cars will go down
it doesn't work like that because of leasing and the fact that corporate fleet vehicles are (generally) never older than 4 years old
>>14906340
yeah I was thinking about that earlier. Since there's only so many used cars left in the supply, any huge hit to the used car market permanently increases prices since there's no additional used cars entering the market, they're all new
>>14906349
well yes, for this idea everyone would have to get together and agree not to buy or lease new, only used
>>14906331
>'supply and demand' concept.
Please realize that the economy does not work this way, though, in many countries, it wants to pretend it does.
>>14906357
if a frog had wings it wouldn't bump it's ass when it hopped
>>14906331
>totally vanished and removed from the economy forever
No, that is not how it works. It's lost value, but the money is transferred to the dealership.
Now, back in the 1960s, people DID stop buying new cars. Or, at least, they stopped being sold because the factory and transport workers were on strike. They just sat in car parks or in fields for month after month, and started to rust. The company went under not too long after that.
Now, what YOU'RE proposing would merely drive the price of 'used' cars down as well. Or, quite possibly, drive the price of slightly used cars UP, as the few scabs breaking this 'collective decision' and buying discounted new cars would have higher resale values.
New cars would cost less, newer used cars would cost almost as much as new cars, and older used cars would continue to lose value at the normal rate. This would lead to a major gap in the market, and prevent people from trading up.
One economics class does not give you an understanding of economics. Start selling things and get back to us in a year.
>>14906867
Wow you're stupid
>>14906331
New cars actually cost a lot to manufacture on account of safety and emissions regulations. For your plan to work it would take much much longer than a few months. It would take many years of decreased demand and remember that demand is a law of nature. "everyone collectively deciding" to not buy new cars is market manipulation and it won't happen without some reason but let's say there was a major economic turn and the bottom 99% or even 99.9% of people simply became to poor to buy new cars AND the financial system collapsed enough that people couldn't get under crushing debt to buy them. Car companies would also begin to go out of business and would scramble to produce economy versions of their most economical cars just to stay afloat while the government slowly relaxed regulations and allowed affordable cars to be produced so that the industry wouldn't collapse. That's what it would take and it would take - naturally and slowly.
>>14907317
why would they go out of business? they're big corporations so they could easily last for a while
>>14906331
>>14906340
>>14906357
https://www.youtube.com/watch?v=kZfHnDmyEzE
If you do not already, you will learn to love the mustache.
https://www.youtube.com/watch?v=57lDauqtpzc
https://www.youtube.com/watch?v=VAYd2AK53P8
https://www.youtube.com/watch?v=THpYOCyvdAU
https://www.youtube.com/watch?v=6u59Glw6fQg
https://www.youtube.com/watch?v=vNUtvstt_0Q
>>14911632
funny that americucks made a thread about some boyracers in ireland being forced to install top speed limiter while in america you get your car crushed kek
>supply an demand
>real
top kek
>>14911666
>I'm retarded and don't know what the cash for clunkers program was
>>14911683
>implying it isn't.
It's the reason bjs from ur mum are so cheap, the supply is infinite and demand isn't too much ;)
Semi-related question
Are new cars pumped out of the factory aimlessly or are all of them built to order?
If the former, why are they not doing the latter? Seems like a huge waste of money and resources.
>>14911705
the blue civic with red wheels is froma street racing bust dumbass
>>14911713
nice meme
feel free to prove its real with an actual response now
>>14911717
They have many many economists on staff who estimate demand for a given model and make a certain amount to account for that.
Companies like Ferrari or Bentley, not so much
>>14911730
>no mention of anything in the video
>hurrrrrr dumbass hurrrrrrrr
Don't be so salty when you can't afford anything over a 1.0L faggotbox.
>>14911730
http://www.investopedia.com/ask/answers/041615/what-are-some-examples-law-demand-real-markets.asp
>>14911717
Obviously wouldn't be feasible to have to wait til someone buys a car to spec it out. I don't know how all brands work but at Toyota if someone wanted certain options they would find a car in the dealership network and send it to a place within the US where the options are outfitted after the car was already built, they can do stuff like put in sunroofs, switch to a leather interior, this isn't the norm but it happens.
>>14907317
>Wow you're stupid
Great argument there, son.
>>14911764
>that sports game example
Holy fuck, are they serious? That's so far removed from an actual economy, it's hilarious they even thought of using that.
>Investopedia
Is all of that site this stupid?
