Will Coronavirus hit used car prices? (Vol 2)

[ghost83]

In relation to interest rates I got a letter today when I got home! It’s gone up for the 5th time by another 0.25%

So that’s now 1.25% it’s gone up this year

[av185]

RUSTILLDOWN said:

Fast Bug said:

Whilst demand will drop, the issue is the size of the backlog and quite a lot of the issues causing it aren't being resolved. Until the outstanding orders have been fulfilled, there's no need for a manufacturer to start offering incentives. And on the whole the incentives will have to come from the manufacturers as dealers have had both front and back end support cut so don't have any real room to make the same deals that they would've done a few years ago.

If I PERSONALLY had to wait 6-12 months for a vehicle and a recession hit I’d cancel the order.
If my BUSINESS had to wait 6-12 months for a vehicle and a recession hit I’d cancel even quicker.

Probably be a big mistake cancelling. And Im not talking about losing your deposir by cancelling either.

The mere fact that you have to wait 6 months now in reality probably nearer 9 months come actual delivery time should tell you chances are you will be able to sell the car at an easy premium/profit or keep the new car and get effectively free motoring for say 6 months.

Either way depending on the actual car it is a no brainer in principle.

[av185]

time waster said:

Roverp666 said:

Can anyone explain? Been looking for a 3 year old car for about 12 months. I would like one, I don't need one, I have a perfectly serviceable 12 year old car with less than 80 000 on it. It works perfectly, its just dated. When all the silly prices started I didn't even phone around. If others are prepared/need to pay these prices I am quite willing to stand back and let them do so. Obviously there is no point telling a dealer you think a car is too highly priced if the guy stood behind you is willing to pay it etc. I have now noticed a very high percentage of the cars I have been tracking have been in the dealer system since November last year, some having dropped in price over 3k in that time. I also have now noticed dealers seem to be stuffed with cars, so thinking things have changed, I have called in to view a few. When I point out I know they have had the vehicle for nearly 6 months the patter changes from "you are lucky this is still available" to "even though we have had it so long we can't possibly offer anything off". I see says I "If you are advertising it surely you want to sell it, if you have not sold it for six months this perhaps suggests the selling price is too high? ". "Well we bought it at the height of the market, we have to sell it at its current price, just to make a tiny bit" I then explain I am here to buy, I understand they are continually reducing them, but if the vehicle is still for sale they are obviously not reducing them quickly enough or by the right amount, or both. I understand they may well have paid a bigger trade price than the current one back then but surely the retail price cannot include that loss. I then get that vacant look when the realize a sale is not forthcoming at their current price. Although a little frustrating, it's no biggy for me with my current car situation. The thing I don't get is with the current state of affairs, why are the dealers unwilling to negotiate. If it was me, sure I don't want to make a small profit or even a loss, but surely you are better getting what you can for the stock you paid too much for, get the cash back into the market and continue to sell at a profit. Hanging on to cars, constantly priced above what they will now sell for can't be a serious business strategy surely? I also know selling cars for a smaller profit or even a loss is not a serious business strategy, but looking at some of the profits from dealerships over the last 12 months it is clear dealers did well when trade prices for the vehicle they had previously bought had increased considerably by the time they got them to retail, and therefore were retail priced accordingly. I didn't mind this at all, that's good business, and no one is forcing me to buy a car, so good luck to them, however am I wrong to be thinking now the boot is on the other foot, surely it makes sense to respond accordingly?

We are at the tipping point, hold on a little longer and they will be biting your hand for the money

Nope.

If dealers do not want to sell at a specific price it generally means they won't be able to replace the car substantially cheaper than the one they are selling.

Which is what we are seeing now particularly with the backdrop of rising new car prices across the board componentry and supply chain issues and increasing lead times.

[Fast Bug]

RUSTILLDOWN said:

Fast Bug said:

Whilst demand will drop, the issue is the size of the backlog and quite a lot of the issues causing it aren't being resolved. Until the outstanding orders have been fulfilled, there's no need for a manufacturer to start offering incentives. And on the whole the incentives will have to come from the manufacturers as dealers have had both front and back end support cut so don't have any real room to make the same deals that they would've done a few years ago.

If I PERSONALLY had to wait 6-12 months for a vehicle and a recession hit I’d cancel the order.
If my BUSINESS had to wait 6-12 months for a vehicle and a recession hit I’d cancel even quicker.

You'd hit cancel and then realise nobody has vans and the leads times for many are over 12 months and you'd be at the back of a very long queue.

We've had some build dates move which has meant that they're now 6% more expensive. I've informed the customers and said they can cancel at no cost to them and all of them have accepted the price increase as they need their vans. I'm pretty sure I've got 95% of next years Sprinter panel vans allocation sold, and I've turned down some chunky orders as I can't guarantee when they're going to be built, nor what the price will be at the moment.

In the lcv world, and indeed for many car manufacturers, this will take longer than 6 months to wash out

[Auto810graphy]

greggy50 said:

Valuation has gone up on my Polestar again.

45,230 now for a car that was 47,995 22k miles and 15 months ago.

185pm in depreciation certainly isn't bad at all!

If it was one of the initial 2020 launch cars they were actually discounted from list price to ALD and Leaseplan so probably about neutral.

[av185]

Looks like the first £80k Skodas are hitting the streets.

Used Enyaqs now up to £25k over list.

[ghost83]

This ain’t gonna last and anyone paying 85k for a Skoda wants shooting!

So as I said yesterday got the letter to say mortgage interest rate was going up again by 0.25%

Then today I read this


Sorry but come October (q4 like I’ve said before and into q1 2023) people are going to be skint! As let’s be honest if interest rates have gone up 5x already this year and will carry on! Nobody has an unlimited pot of money!

No one

[av185]

As previously mentioned these price rises will become the norm irrespective of the economic backdrop.

The rises are because of the increasingly long lead times. And as said before folks need to buy cars. And they will pay these prices.

Everything is going up in price unsurprisingly....including cars. Get used to it.!

[Al U]

av185 said:

And they will pay these prices.

That's the thing though, I have gone from needing a car to wanting a car. I don't NEED one. Would I like one? Yes. Am I going to pay the prices that dealers think are reasonable despite cars sitting on their forecourts for 3-6 months? No.

Until prices come down (which they will if dealers want to ever get back to turning cars round quickly) we will make do with being a one car household. If my situation changes and I do need to buy something urgently I'll do what I can to buy private.

[Canyon78]

av185 said:

Looks like the first 80k Skodas are hitting the streets.

Used Enyaqs now up to 25k over list.

https://www.theaa.com/used-cars/cardetails/137-1440703

Is this the one? I think that price could be displayed wrong. Quick search and it's 10k over any others with similar spec. I could be wrong though.

[jimPH]

av185 said:

Looks like the first 80k Skodas are hitting autotrader.

Used Enyaqs now advertised up to 25k over list.

EFA

[bencollins4]

ghost83 said:

This ain’t gonna last and anyone paying 85k for a Skoda wants shooting!

So as I said yesterday got the letter to say mortgage interest rate was going up again by 0.25%

Then today I read this


Sorry but come October (q4 like I’ve said before and into q1 2023) people are going to be skint! As let’s be honest if interest rates have gone up 5x already this year and will carry on! Nobody has an unlimited pot of money!

No one

Luckily most people are not on a variable rate mortgage and we’ve known about the price cap increase in October for months. Let’s be honest, interest rates are still very low historically, even if they do rise another % or so in the next 12 months.

Sure, there will be some that will struggle and some that will not but those that want certain cars are going to have to pay for them or wait an indefinite period of time for the price to reduce (maybe) or not.

It’s a brave person to make a prediction with these set of totally unique circumstances.

[Fusion777]

av185 said:

Looks like the first 80k Skodas are hitting the streets.

Used Enyaqs now up to 25k over list.

Still waiting for your vehicle list.

[jimPH]

My account with E.On is 1800 in debt. Currently paying 118/mth, so that will need to go up.

Credit card is 4500 this month.

That Rocket 3 I was eyeing up over the w/e will have to wait!

[mrdanbartlett]

How do you mean, are they being sold for 80k?

Not sure I follow, do you mean they are being listed for 80k or someone has paid 80k? (there is quite a big difference)

If a Skoda is being sold for 80k that is indeed crazy.

[mrdanbartlett]

ghost83 said:

This ain’t gonna last and anyone paying 85k for a Skoda wants shooting!

So as I said yesterday got the letter to say mortgage interest rate was going up again by 0.25%

Then today I read this


Sorry but come October (q4 like I’ve said before and into q1 2023) people are going to be skint! As let’s be honest if interest rates have gone up 5x already this year and will carry on! Nobody has an unlimited pot of money!

No one

How does the cap work sorry, I assume its not a max figure you can pay for energy, its per a certain amount of energy? It is crazy though, we used £250 in gas an electric this past month without using the heating, so could easily be on £4-500 come January and onwards.

As another posted I'm also wanting but not needing to change cars and will wait a bit to see how things pan out.

[123DWA]

time waster said:

We are at the tipping point, hold on a little longer and they will be biting your hand for the money

It is amusing dipping into this thread every few weeks to see words to this effect being repeated. People were saying hold on a little bit longer 2 years ago! (I'm sure somebody will be along to tell me how this time its different and its actually going to happen)

[The Rotrex Kid]

123DWA said:

time waster said:

We are at the tipping point, hold on a little longer and they will be biting your hand for the money

It is amusing dipping into this thread every few weeks to see words to this effect being repeated. People were saying hold on a little bit longer 2 years ago! (I'm sure somebody will be along to tell me how this time its different and its actually going to happen)

Well, yes, this really.

Also, and I've said this before a couple of times, if prices dropped 20% tomorrow, it won't actually affect most car sales places all that much.

We turn our stock 10 times a year, so even if values dropped, it only (in theory) affects one stock turn, or 2, or 3, you don't hold onto cars forever, you get them in, prep them, sell them, that's the name of the game. So if values drop off and you have to sell stock at a loss, it will only be a short term pain while you buy the next stock in at the new adjusted lower price. It's just what we do every day/week/month/year as cars depreciate anyway!

[mrdanbartlett]

123DWA said:

It is amusing dipping into this thread every few weeks to see words to this effect being repeated. People were saying hold on a little bit longer 2 years ago! (I'm sure somebody will be along to tell me how this time its different and its actually going to happen)

I guess the main difference is perhaps we have actually now started to see cars being reduced? I've seen many examples not selling and the prices being reduced many times. I do agree it won't be a sharp correction but more of a slow correction over time and likely not fully go back to pre-covid levels.

[ghost83]

bencollins4 said:

Luckily most people are not on a variable rate mortgage and we’ve known about the price cap increase in October for months. Let’s be honest, interest rates are still very low historically, even if they do rise another % or so in the next 12 months.

Sure, there will be some that will struggle and some that will not but those that want certain cars are going to have to pay for them or wait an indefinite period of time for the price to reduce (maybe) or not.

It’s a brave person to make a prediction with these set of totally unique circumstances.

We have known about the cap rising I agree however it’s not an endless pot! And I don’t believe that “most” ppl have a fixed mortgage some can’t remortgage for whatever reason and what about those that rent? Their rents will go up to cover the landlords raised bills!

I’ve kept mine on a variable for 1 reason, being able to make massive overpayments without penalties