Good news for consumers: a tsunami of used cars coming off lease are continuing to put downward pressure on auto prices, which are on track to decline 20% this year alone. Record vehicle inventories, along with heavily indebted consumers, and the rise of ride-hailing and sharing services, all suggest lower prices are unlikely to clear quickly. Anyone looking to buy used in the next couple of years should find themselves in a ‘buyers’ market.

The same developments, however, are bad news for investors in auto rental, resale and lease companies though. Lower resale values equate to lower profits and lower stock and bond prices for companies in this sector. The hit to car rental stocks year to date offers some insight. See: Hertz and Avis plummet on pessimistic used-car predictions.