Will Coronavirus hit used car prices?
Discussion
Coronavirus will hit everyone in two distinct ways.
It will be a complete f
king nightmare for the NHS as we try to slow the spread of this disease and therefore allow as many as possible to receive treatment.
The stock market is already reacting to this and recognising that we won't be travelling anywhere or buying anything other than the necessities. This ultimately means that the economies of the world will tank faster than any other time this century. The USA will be hit hardest as they are completely fked with regard to employment, social security and health matters.
So all the debt we currently have allowed ourselves to swim in will come to bite us back. Dream on if you think used car prices won't tank and all assets will become distressed sales !
It will be a complete f
king nightmare for the NHS as we try to slow the spread of this disease and therefore allow as many as possible to receive treatment. The stock market is already reacting to this and recognising that we won't be travelling anywhere or buying anything other than the necessities. This ultimately means that the economies of the world will tank faster than any other time this century. The USA will be hit hardest as they are completely f
ked with regard to employment, social security and health matters.So all the debt we currently have allowed ourselves to swim in will come to bite us back. Dream on if you think used car prices won't tank and all assets will become distressed sales !
TwigtheWonderkid said:
The govt's own figures estimate 80% of the population will get it, and 1% will die. That's around 560,000 people. That's possibly even more worrying than job losses...you know, actually dying, or if you're younger, your parents dying.
The govt's own figures estimate 80%is "worst case"TwigtheWonderkid said:
The govt's own figures estimate 80% of the population will get it, and 1% will die. That's around 560,000 people. That's possibly even more worrying than job losses...you know, actually dying, or if you're younger, your parents dying.
Is it more worrying? I don't think it is for many. Worrying about loosing their homes, no food etc. I would imagine is far more worrying for some than dying.
As for parents dying? C'mon, be realistic.
Its really interesting and I have been thinking about it a lot as I have just put down a deposit on a car! There are lots of moving parts and my thoughts were broadly:
- The new car market is buggered. Manufacturers are already struggling as their number one market has pretty much shut (china) so companies that were already hemorrhaging cash last year (JLR / AML) will struggle to survive. The Germans are going to take a big hit too and the idea of mothballing factories and makign staff redundant is inevitable. So there will be massive incentives out there to buy new as the manufacturers want to avoid a build up of inventory and help their working capital when they may already be fearing a cash squeeze.
- With interest rates coming down again this will exacerbate the attractiveness of new cars
- Used cars suffered heavily in 08/09 so I was trying to think why.. Well lots of forced sellers for one, lots of non Brits got laid off and went home and sold at any price and lots of guys got fired and wanted to clear some cash, especially in finance so some interesting cars were floating around. Also property prices were falling and the housing market came to a halt and lots of people tend to buy interesting cars when they have just refinanced their house or made a killing on a property sale. So will these things happen now.. difficult to say but probably. The housing market should have had a Brexit hit anyway, but low interest rates (and greed) will slow that. Stamp duty changes should also have softened the pace of fast money in the market. Will lots of people get fired.. Probably.. In finance, banks will have a torrid year so this will be anticipated now and headcount will be at best frozen.
So lots of questions.. no real conclusion. Ultimately less new cars coming online should lead to a positive dynamic in the used market if you believe in vanilla supply and demand. But if the last 2 weeks have shown us anything it is that Panic will always prevail. So strap in and get ready for those used bargains!
- The new car market is buggered. Manufacturers are already struggling as their number one market has pretty much shut (china) so companies that were already hemorrhaging cash last year (JLR / AML) will struggle to survive. The Germans are going to take a big hit too and the idea of mothballing factories and makign staff redundant is inevitable. So there will be massive incentives out there to buy new as the manufacturers want to avoid a build up of inventory and help their working capital when they may already be fearing a cash squeeze.
- With interest rates coming down again this will exacerbate the attractiveness of new cars
- Used cars suffered heavily in 08/09 so I was trying to think why.. Well lots of forced sellers for one, lots of non Brits got laid off and went home and sold at any price and lots of guys got fired and wanted to clear some cash, especially in finance so some interesting cars were floating around. Also property prices were falling and the housing market came to a halt and lots of people tend to buy interesting cars when they have just refinanced their house or made a killing on a property sale. So will these things happen now.. difficult to say but probably. The housing market should have had a Brexit hit anyway, but low interest rates (and greed) will slow that. Stamp duty changes should also have softened the pace of fast money in the market. Will lots of people get fired.. Probably.. In finance, banks will have a torrid year so this will be anticipated now and headcount will be at best frozen.
So lots of questions.. no real conclusion. Ultimately less new cars coming online should lead to a positive dynamic in the used market if you believe in vanilla supply and demand. But if the last 2 weeks have shown us anything it is that Panic will always prevail. So strap in and get ready for those used bargains!
Chipper said:
I wonder how the car bloggers with all their cars on PCP will cope.
Yes its funny but true.. Also the old Ferrari flipping has to be toast now so there could be lots of people stuck with cars on order and no sale on the last car they expected to sell for it.... That will crush Ferrari prices in particular.. Think Maranello has bigger problems right now though.. gizlaroc said:
Already falling fast.
Just look at prices of bigger stuff.
Mate who was offered £14k for his 4.4 TDV8 Range Rover in Feb from LR, WBAC and Mercedes said the best price he has been offered this week is now £8800. Ouch!
The offer from WBAC on my 2014 5 series was down over 20% this morning from the offer 2 weeks ago!
.
Have forecourt prices dropped by similar amounts? I sniff a bit of profiteeringJust look at prices of bigger stuff.
Mate who was offered £14k for his 4.4 TDV8 Range Rover in Feb from LR, WBAC and Mercedes said the best price he has been offered this week is now £8800. Ouch!
The offer from WBAC on my 2014 5 series was down over 20% this morning from the offer 2 weeks ago!
.
Chipper said:
I wonder how the car bloggers with all their cars on PCP will cope.
If Corona means people will have to take up measures like social distancing and office employees required to work from home, then I expect YT viewing may even go up which will be good news for the YouTubers55palfers said:
gizlaroc said:
Already falling fast.
Just look at prices of bigger stuff.
Mate who was offered £14k for his 4.4 TDV8 Range Rover in Feb from LR, WBAC and Mercedes said the best price he has been offered this week is now £8800. Ouch!
The offer from WBAC on my 2014 5 series was down over 20% this morning from the offer 2 weeks ago!
.
Have forecourt prices dropped by similar amounts? I sniff a bit of profiteeringJust look at prices of bigger stuff.
Mate who was offered £14k for his 4.4 TDV8 Range Rover in Feb from LR, WBAC and Mercedes said the best price he has been offered this week is now £8800. Ouch!
The offer from WBAC on my 2014 5 series was down over 20% this morning from the offer 2 weeks ago!
.
Dont believe everything you read.
Got to love all these stories about mate of a mate down the pub lol.
Presumably if this carries on for long, new car supply is going to start drying up which could easily push used car prices up.
The automotive industry is so reliant on its "just in time" supply chain it wouldn't take much of a disruption to have a serious effect on the world's ability to actually produce cars.
The automotive industry is so reliant on its "just in time" supply chain it wouldn't take much of a disruption to have a serious effect on the world's ability to actually produce cars.
55palfers said:
Have forecourt prices dropped by similar amounts? I sniff a bit of profiteering
I doubt it yet. I haven't looked, I'm offloading cars not buying more.
Just had my mate from Audi on the phone asking how the last couple of days have been for me in clothing retail, couldn't cheer him up at all I'm afraid.
The reality is, most retailers over the last week are down, and down big, talking 50-75% down.
Most retailers have enough cash flow to get through one, maybe two months of paying rents, mortgages, rates, wages, electricity, phones and fibre and all the other bills that carry on even if business is not.
Doesn't matter how big you are, in fact the bigger you are the more a downturn can really hit and hit you far quicker.
Same for cafes, coffee shops, restaurants.
Same for those in the entertainment industry, be that cinema, theatre, concerts or those running the massive shows and events that go on every day with 100,000s of customers going through the doors at The N.E.C and the 100s of other venues around the globe.
Then we have the sporting events, the money that is generated for everyone when football match is on, many make their living off the footfall on match day, plus all those involved in the running of the stadium itself.
What about those working in public transport getting everyone to the stores, restaurants, sporting events and business shows? No real need for them if no one is going anywhere.
The problem we have at the moment is 99% of those who are employed will have absolutely no idea just how desperately tight things are getting until the bosses tell them.
What will they tell them? Could be "We have got to let you go" or "We have got to reduce your hours down by 50% of 75%".
It is only then that the reality of this will hit home, it is then that many will think long and hard about the new PCP or contract hire they have signed, it is then they will think "Do I really need to change my car. Maybe I just need to hand it back and buy something older for cash."
By the way, he did just say "I hope many with new orders don't realise they have a 14 day cooling off period".
Something to remember folks.
Back in 2010 I bought a 3 year old A6 3.2 Quattro Avant from Peterborough Audi for £13k down from £23k.
They had too many cars for their forecourt, they had 54 trade in coming in and not sold anything used for 8 weeks, and they also had new cars that customers had cancelled coming in. They just needed to move metal whatever the hit.
Will we see that again? Who knows?
But the reality is, if we go in lock down will the company you work for still be there when it is lifted? If so, will you be able to afford your monthlies or if paid for, will that nice car sat on the drive be worth more to you in your bank?
I think the only saving grace for dealers is this has not happened just before the new regs. That could have seen them hit far harder. September will be very interesting.
gizlaroc said:
Chipper said:
I wonder how the car bloggers with all their cars on PCP will cope.
I wonder how the UK with all their cars on PCP will cope? That is the reality.
You just hand it back and WALK away!
Gassing Station | General Gassing | Top of Page | What's New | My Stuff