Will Coronavirus hit used car prices?

[johnnyBv8]

Raygun said:

As with all these bargains I take it all those in expensive houses will have to downsize and my little two bedroom semi worth about £200k will become in demand?
Every cloud and all that.

That doesn't particularly follow. "Expensive house" is very subjective - there may be people that consider yours to be expensive, and people in houses you perceive to be expensive may be well within their means; housing market decline usually affects all levels to an extent. The main threat would come right at the very top end in London, if foreign buyers / money launderers stop investing in the UK.

Edited by johnnyBv8 on Wednesday 1st April 07:39

[Dwh8611]

LooneyTunes said:

So said:

Aaa. said:

av185 said:

Aaa. said:

One of my mates is a new money multimillionaire, I don't know exact figure (he probably doesnt really either) but circa £15m-20m?? He sold the company he worked for for £600m.

His one and only car is a BMW 430i coupe (not even an M4) and I would imagine the average PHer would lump him in with with the 'PCP cant afford it' crowd clearly living well beyond his means.

Did he pcp it?

No, but I did find out that he financed it rather than outright purchase, which did surprise me.

Why?

If you're getting finance for nearly free, or actually free, why would you tie up capital?

If you’ve got that sort of cash then tying up £40k(?) is unlikely to be a concern. More likely he just doesn’t want the hassle of getting rid of a 2/3 year daily and the couple of grand in interest is immaterial.

It doesn’t matter how rich you are if you have got there through doing good business then you will always look for the best deal. It’s lottery winners that fritter the money away like that and then wonder where it all went.

[So]

LooneyTunes said:

So said:

Aaa. said:

av185 said:

Aaa. said:

One of my mates is a new money multimillionaire, I don't know exact figure (he probably doesnt really either) but circa £15m-20m?? He sold the company he worked for for £600m.

His one and only car is a BMW 430i coupe (not even an M4) and I would imagine the average PHer would lump him in with with the 'PCP cant afford it' crowd clearly living well beyond his means.

Did he pcp it?

No, but I did find out that he financed it rather than outright purchase, which did surprise me.

Why?

If you're getting finance for nearly free, or actually free, why would you tie up capital?

If you’ve got that sort of cash then tying up £40k(?) is unlikely to be a concern. More likely he just doesn’t want the hassle of getting rid of a 2/3 year daily and the couple of grand in interest is immaterial.

We bought a new Mini runaround on PCP recently. 2.9% APR.

We could have bought twenty or thirty of them in cash.

If we borrow money for our business it currently costs us somewhere around 6.5%.

We thought we were doing the right thing.

[LooneyTunes]

Dwh8611 said:

LooneyTunes said:

So said:

Aaa. said:

av185 said:

Aaa. said:

One of my mates is a new money multimillionaire, I don't know exact figure (he probably doesnt really either) but circa £15m-20m?? He sold the company he worked for for £600m.

His one and only car is a BMW 430i coupe (not even an M4) and I would imagine the average PHer would lump him in with with the 'PCP cant afford it' crowd clearly living well beyond his means.

Did he pcp it?

No, but I did find out that he financed it rather than outright purchase, which did surprise me.

Why?

If you're getting finance for nearly free, or actually free, why would you tie up capital?

If you’ve got that sort of cash then tying up £40k(?) is unlikely to be a concern. More likely he just doesn’t want the hassle of getting rid of a 2/3 year daily and the couple of grand in interest is immaterial.

It doesn’t matter how rich you are if you have got there through doing good business then you will always look for the best deal. It’s lottery winners that fritter the money away like that and then wonder where it all went.

You think the best deal is always the cheapest? Convenience is part of the equation too.

[R.Sole]

So said:

We bought a new Mini runaround on PCP recently. 2.9% APR.

We could have bought twenty or thirty of them in cash.

If we borrow money for our business it currently costs us somewhere around 6.5%.

We thought we were doing the right thing.

I would imagine that most people PCP’ing a £40k car have 20/30 times that sitting in the bank.

[suffolk009]

classicaholic said:

Bowlers said:

gt69 said:

The CCA auction over the last couple of days was curious. Quite a lot was selling at pretty much what one would have expected pre-CV -though there were the odd 'bargains' - carb Ferrari 308 GTS at £33k (75k miles) is the lowest I've seen since before they went through the roof at a Silverstone 2014 auction - that was a £55-60k car a couple of years ago, given the high miles, and a £45-50k car a couple of months ago
https://www.classiccarauctions.co.uk/cca-march-202...

This chap bid and won the auction for the 308 GTS.

https://youtu.be/rCTOn7b_NI0

Nice Vid, reminds me of when I buy at auction, it can get exciting at the end!

He's worth a follow. I find his vids interesting. They're more Harry Metcalfe than Shmee, if you see what I mean.

[woodsy99]

My view would be that given that there would be serious knock on effect caused by people’s income being reduced or worse still losing their jobs leading to inability to pay off CC debts etc.
So probably modern tin tops would see a sudden and substantial drop and dealers sitting on large stocks may even be forced into liquidation.
I don’t think classics or modern classics would escape either and with less buyers and again dealers sitting on stocks would be forced to sell off cars or again may go out of business.
I’m currently looking to buy a modern classic , but reluctant to go ahead until I see how things pans out...........but expect to be paying less in say months than I would be paying now
Perhaps a good test is to keep any eye on eBay auction prices and see how they vary from reserves as this will indicate exactly what people are willing to pay

[Dwh8611]

LooneyTunes said:

Dwh8611 said:

LooneyTunes said:

So said:

Aaa. said:

av185 said:

Aaa. said:

One of my mates is a new money multimillionaire, I don't know exact figure (he probably doesnt really either) but circa £15m-20m?? He sold the company he worked for for £600m.

His one and only car is a BMW 430i coupe (not even an M4) and I would imagine the average PHer would lump him in with with the 'PCP cant afford it' crowd clearly living well beyond his means.

Did he pcp it?

No, but I did find out that he financed it rather than outright purchase, which did surprise me.

Why?

If you're getting finance for nearly free, or actually free, why would you tie up capital?

If you’ve got that sort of cash then tying up £40k(?) is unlikely to be a concern. More likely he just doesn’t want the hassle of getting rid of a 2/3 year daily and the couple of grand in interest is immaterial.

It doesn’t matter how rich you are if you have got there through doing good business then you will always look for the best deal. It’s lottery winners that fritter the money away like that and then wonder where it all went.

You think the best deal is always the cheapest? Convenience is part of the equation too.

Yes agree with convenience as often my time is more valuable to me but I always start with the cheapest cost deal available and then adjust for convenience.

[anonymous-user]

johnnyBv8 said:

Raygun said:

As with all these bargains I take it all those in expensive houses will have to downsize and my little two bedroom semi worth about £200k will become in demand?
Every cloud and all that.

That doesn't particularly follow. "Expensive house" is very subjective - there may be people that consider yours to be expensive, and people in houses you perceive to be expensive may be well within their means; housing market decline usually affects all levels to an extent. The main threat would come right at the very top end in London, if foreign buyers / money launderers stop investing in the UK.

Edited by anonymous-user on Wednesday 1st April 07:39

I wasn't really being too serious, it's obvious at this moment in time the market for non-essential goods would've took a hit and no one knows what the outcome will be.

[Deep Thought]

visitinglondon said:

fridaypassion said:

Good old PH

Always divides up into the following:

Know it all types that look down their noses at the peasants who have to use something so common as finance to buy a car - 99% of the time these are just people that inherited wealth and would be stacking shelves if daddy or granddady didn't bankroll them.

People that like to buy things using finance within their means (most normal people)

People that would like to buy a nice car but have to wait for their personal situation to improve before pressing the button

People that could afford to buy a nice car but run round in a stter perhaps not realising that one day you are dead and although its nice to own everything and now owe the bank anything we all ultimately rent everything in this life

Short answer - Let's just wait and see and stop being horrible to eachother.

You forgot those who take out ruinous finance deals to impress their friends and neighbours, don’t actually have a pot to piss in and will be royally fked by this downturn.

Hopefully it will teach them some financial discipline going forward.

Of course. Theres a minority in society who have done that - and at the first opportunity will do so again - but it will be interesting to see what happens in six months time.

If the PCP haters are to believed, most people who PCP are actually in that category so we should see hundreds of thousands of cars repossessed, if not millions, and on the back of living hand to mouth - which again most of them do apparently - we'll see millions of these suburbanites suddenly living in abject poverty.

[Deep Thought]

BrabusMog said:

I'm the only one out of my RRS owning friends that actually paid my cash for the car up front as I am intending on keeping it forever, there are 3 others in my friendship group that have one and one has a FFRR on tick and has just been furloughed. I suspect this is the norm and there are going to be some squeaky bums! We also ticked a shopping cart for my missus this month but £215 a month isn't breaking the bank at the moment luckily!

Ironically hes probably better off on his 80% now than if he was working and paying for commuting costs, fuel, going out, etc, etc.

[Earthdweller]

gizlaroc said:

The mistake many make is using car dealer finance on used cars.

£25000
60 x £456
final payment £8000 at 11.9% apr

£25000
60 x £454
Owned outright at 3.5% apr.


Yet the PCP is sold on "But we guarantee your car will be worth £8000 at the end."
"No you don't! You guarantee I will have to pay you an extra £8000 at the end or walk away with nothing."

Absolutely spot on with that

I bought an X3 on PCP (4.9%apr) for the extra discount then paid it off with a bank loan at 3% Apr

The final payment was £17k at 48 months

Monthly’s were pretty much the same .. at 48 months I think I owed £8k on it .. now it’s paid off

[Deep Thought]

Earthdweller said:

gizlaroc said:

The mistake many make is using car dealer finance on used cars.

£25000
60 x £456
final payment £8000 at 11.9% apr

£25000
60 x £454
Owned outright at 3.5% apr.


Yet the PCP is sold on "But we guarantee your car will be worth £8000 at the end."
"No you don't! You guarantee I will have to pay you an extra £8000 at the end or walk away with nothing."

Absolutely spot on with that

I bought an X3 on PCP (4.9%apr) for the extra discount then paid it off with a bank loan at 3% Apr

The final payment was £17k at 48 months

Monthly’s were pretty much the same .. at 48 months I think I owed £8k on it .. now it’s paid off

Some of the finance "offers" on BMW Approved Used are frankly shocking. £10,000 of interest charges on a used 320d

[Vroomer]

Deep Thought said:

Ironically hes probably better off on his 80% now than if he was working and paying for commuting costs, fuel, going out, etc, etc.

I think you've forgotten the £2500 pm salary cap

[Sa Calobra]

G_Morto said:

I work in the public sector and in my civil service department there's zero chance of being let go. Our yearly pay rise is actually going ahead as scheduled next month

You say that.

I also work in somewhere similar.

If and when it goes bad our salaries won't be paid but we will be fully expected to work owed the money.

Governments can and do fail with no money to pay staff and any money paid make be worthless if inflation is rampant.

[gizlaroc]

Wills2 said:

There is enough PCP debt out there to bankrupt the big three German brands if is goes wrong, Merkel would have to bail them out.

She is not allowed to bail them out though.

[liner33]

I'm so glad I bought on pcp, what with the crash in used values coming in could well be sat with an asset worth considerably less than I'd expected come trade in time .

Of course with the market crash my investments will have dropped and not given me the return on the capital meaning I'll be paying more in interest than I'd hoped as I usually use the capital in investments rather than buying cars.

[Vroomer]

Sa Calobra said:

Governments can and do fail with no money to pay staff and any money paid make be worthless if inflation is rampant.

Give one example of a European government failing since WWII.

[kharma45]

gizlaroc said:

She is not allowed to bail them out though.

State aid rules have been changed significantly, so she could

https://ec.europa.eu/commission/presscorner/detail...

[anonymous-user]

liner33 said:

I'm so glad I bought on pcp, what with the crash in used values coming in could well be sat with an asset worth considerably less than I'd expected come trade in time .

If you're going to trade it in, using the value of it against a new car, the lower used value isn't an advantage!

If you were just going to hand it back and walk away, it doesn't matter to you what the used market is doing.