Will Coronavirus hit used car prices? (Vol 2)

Will Coronavirus hit used car prices? (Vol 2)

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Discussion

Indecision

409 posts

81 months

Tuesday 24th May 2022
quotequote all
ghost83 said:
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
Of interest, according to the Economist last week 7% of British mortgages (in 2018) were variable rate, suggesting a surprisingly high percentage are indeed fixed. Half of all fixed rate mortgages have/had less than a 2 year period however, so these will roll around quite fast.

av185

18,626 posts

128 months

Tuesday 24th May 2022
quotequote all
Fusion777 said:
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.
Ok so here are a few worth thinking about.

Well lets start with the Golf R mk 7 'manuel'. Limited numbers will ensure very robust values especially as the Mk8 is less popular only available auto and alot more expensive new at approaching mid £40ks with only a bit of spec.

Mini 'manuels' will continue to do very well mainly because of recent huge price rises across new models but also because new models only available as autos.

Fiestas and Focus models should do well simply because they cannot currently be ordered new.

Moving up, the 981 Spyder is holding up well and with only 223 UK cars still selling over new list even 25k mile 6 year old cars. Gt3 front suspension 718 Spyder a great car but alot more focused and more expensive which is propping up values of the 981 similar to the GT4. 981 Spyder a great lifestyle weekend car at the money although personally I prefer the 981 GT4.

Lotus Emira. 20 month lead time. Bargain price new at £75k. These are £100k cars all day long. 458 Ferrari looks but less weight Lotus chassis know how bang up to date interior and at 400bhp possibly sweetspot power output for road use. The last ice Lotus which will guarantee future desirability.

Opposite spectrum but a great last of the line is the Lamborghini Performante. Very few proper spec cars come to market these as predicted have shot up in price over the last 12 months and a definite future classic although personally I prefer the Ferrari Pista even if they are alot more expensive at £320k still a bargain imo.

johnnyBv8

2,419 posts

192 months

Tuesday 24th May 2022
quotequote all
ghost83 said:
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
Off topic, but most people do. Approx 75% of homeowner mortgages are on a fixed rate, and 96% of new borrowers have chosen fixed since 2019.

In terms of your reasoning for staying variable, if that were the ONLY reason for staying on variable you might do better just paying it down every 2 years or so when remortgaging into a new deal. I’ve generally gone variable rate in the past, but that was mainly because there was no tie-in / early redemption charge. However I went fixed in Sept last year at 0.99% for 5 years, as the fixed rates seemed so ridiculously low - happy now that I did!

moonigan

2,146 posts

242 months

Tuesday 24th May 2022
quotequote all
av185 said:
Looks like the first 80k Skodas are hitting the streets.

Used Enyaqs now up to 25k over list.
The obvious question is why are they being advertised for such high premiums? I honestly can't think of a reason why you would pay £70-80K for a used one of these.

Superflow

1,421 posts

133 months

Tuesday 24th May 2022
quotequote all
moonigan said:
The obvious question is why are they being advertised for such high premiums? I honestly can't think of a reason why you would pay 70-80K for a used one of these.
Probably because the dealers cannot replace them quickly to stock.

Supply and demand again.

av185

18,626 posts

128 months

Tuesday 24th May 2022
quotequote all
Al U said:
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.
But its not about turning cars round quickly.

Volume has been replaced by margin at much higher prices because there are fewer new cars with increasing lead times. Dealers don't need to sell the number of cars because they aren't available for them to sell in the first place hence the higher prices which fewer buyers are prepared to pay so the fact that there is a shrinking pool of buyers as a consequence of economic tightening is broadly irrelevant.

time waster

676 posts

242 months

Tuesday 24th May 2022
quotequote all
moonigan said:
av185 said:
Looks like the first 80k Skodas are hitting the streets.

Used Enyaqs now up to 25k over list.
The obvious question is why are they being advertised for such high premiums? I honestly can't think of a reason why you would pay 70-80K for a used one of these.
people don't - transaction price very different

time waster

676 posts

242 months

Tuesday 24th May 2022
quotequote all
mrdanbartlett said:
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.
you can't be charged more than the cap for a unit of energy. the annual cost quoted is an average household. You could fix for two years, but that will be more at the moment - as expectations it will be increasing again

av185

18,626 posts

128 months

Tuesday 24th May 2022
quotequote all
moonigan said:
av185 said:
Looks like the first 80k Skodas are hitting the streets.

Used Enyaqs now up to 25k over list.
The obvious question is why are they being advertised for such high premiums? I honestly can't think of a reason why you would pay 70-80K for a used one of these.
Folks will though because there are so few being made the lead times are extending and those buyers aren't prepared to wait.

Margin instead of volume equals higher prices and premiums over list price. Manufacturers make greater profits .

This is the way many manufacturers are going.... said this last year.

Al U

2,313 posts

132 months

Tuesday 24th May 2022
quotequote all
av185 said:
Ok so here are a few worth thinking about.

Well lets start with the Golf R mk 7 'manuel'. Limited numbers will ensure very robust values especially as the Mk8 is less popular only available auto and alot more expensive new at approaching mid 40ks with only a bit of spec.

Mini 'manuels' will continue to do very well mainly because of recent huge price rises across new models but also because new models only available as autos.

Fiestas and Focus models should do well simply because they cannot currently be ordered new.

Moving up, the 981 Spyder is holding up well and with only 223 UK cars still selling over new list even 25k mile 6 year old cars. Gt3 front suspension 718 Spyder a great car but alot more focused and more expensive which is propping up values of the 981 similar to the GT4. 981 Spyder a great lifestyle weekend car at the money although personally I prefer the 981 GT4.

Lotus Emira. 20 month lead time. Bargain price new at 75k. These are 100k cars all day long. 458 Ferrari looks but less weight Lotus chassis know how bang up to date interior and at 400bhp possibly sweetspot power output for road use. The last ice Lotus which will guarantee future desirability.

Opposite spectrum but a great last of the line is the Lamborghini Performante. Very few proper spec cars come to market these as predicted have shot up in price over the last 12 months and a definite future classic although personally I prefer the Ferrari Pista even if they are alot more expensive at 320k still a bargain imo.
Why do you say 'manuel'? Is this some sort of inside joke?

Al U

2,313 posts

132 months

Tuesday 24th May 2022
quotequote all
av185 said:
Al U said:
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.
But its not about turning cars round quickly.

Volume has been replaced by margin at much higher prices because there are fewer new cars with increasing lead times. Dealers don't need to sell the number of cars because they aren't available for them to sell in the first place hence the higher prices which fewer buyers are prepared to pay so the fact that there is a shrinking pool of buyers as a consequence of economic tightening is broadly irrelevant.
So you mean to say that used car traders and car supermarkets (which make up a large portion of trade sellers obviously excluding main dealers) would prefer to sell less cars over a longer period at higher margin than sell more cars more over a shorter period of time at lower margin? I don't buy that at all.

Supply and demand is the only reason cars are sold at or above list price, the supply side of which is being limited by microchips rather than manufacturers saying "well we could churn out 100k cars a year but we are only going to make 50k cars so we can sell them for more". The chip crisis simply will not go on forever, when normal service resumes the production lines will go back to full capacity, cars will need to be sold and if there aren't a queue of people willing to pay list, guess what happens.

There are so many reasons that's the case but generally the whole business case of making any vehicle centers around the amount of units that will be produced.

moonigan

2,146 posts

242 months

Tuesday 24th May 2022
quotequote all
Superflow said:
Probably because the dealers cannot replace them quickly to stock.

Supply and demand again.
Yep but a quick look on AT and you could buy an E-Tron now for the same money or less even an i-pace, iX3, ID4, Tesla, Q4, Polestar are all available to buy now (apparently). So why risk a massive bath on the Skoda. confused

av185

18,626 posts

128 months

Tuesday 24th May 2022
quotequote all
Al U said:
Why do you say 'manuel'? Is this some sort of inside joke?

time waster

676 posts

242 months

Tuesday 24th May 2022
quotequote all
Al U said:
av185 said:
Al U said:
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.
But its not about turning cars round quickly.

Volume has been replaced by margin at much higher prices because there are fewer new cars with increasing lead times. Dealers don't need to sell the number of cars because they aren't available for them to sell in the first place hence the higher prices which fewer buyers are prepared to pay so the fact that there is a shrinking pool of buyers as a consequence of economic tightening is broadly irrelevant.
So you mean to say that used car traders and car supermarkets (which make up a large portion of trade sellers obviously excluding main dealers) would prefer to sell less cars over a longer period at higher margin than sell more cars more over a shorter period of time at lower margin? I don't buy that at all.

Supply and demand is the only reason cars are sold at or above list price, the supply side of which is being limited by microchips rather than manufacturers saying "well we could churn out 100k cars a year but we are only going to make 50k cars so we can sell them for more". The chip crisis simply will not go on forever, when normal service resumes the production lines will go back to full capacity, cars will need to be sold and if there aren't a queue of people willing to pay list, guess what happens.

There are so many reasons that's the case but generally the whole business case of making any vehicle centers around the amount of units that will be produced.
The only reason that margins have increased is due to covid. No magic from suppliers - you can't contain large margins without a cartel in place (so everyone keeps prices high). Covid drove up prices. As prices continue to fall the margin will too.

Earthdweller

13,657 posts

127 months

Tuesday 24th May 2022
quotequote all
Theres 44 Enyak’s on the auto trader app

The cheapest is £39k, lots between £40-55k

The most expensive is £69k which is a founders launch edition ( 1-50 ) apparently

I’ve just specced a Sport to £59k easily on Skoda’s website .. there’s only 4 more expensive than that

None are £80k


stevemcs

8,717 posts

94 months

Tuesday 24th May 2022
quotequote all
Out of interest, the people saying the market is going to drop and you will be able to pick up a car for 5p are you in the trade ?


volvos60s60

567 posts

215 months

Tuesday 24th May 2022
quotequote all
Well, I am not fussed if cars go up, down or hold steady - just means the cars in my household move with the times, and the costs of replacing them moves with the times as well. The cost to change may increase or decrease. I do however think some people or companies who bought at the top are at risk of catching a severe cold if the economy suffers badly as is being widely predicted.

What I do find odd is how some people seem to spend all their time on this forum, and this thread in particular, constantly talking up prices, almost as if they had a vested interest in doing so - you would have thought they would be spending all their time raking in their supposed vast profits from their car trading activities than constantly posting on this thread would be an unprofitable use of their time.

However we should all draw our own conclusions about the state of the market by opening up our eyes. On AT there is a way from the URL on an advert to see how long a car has been advertised - that will tell you what you need to know about how quickly cars are selling, or not as the case may be. For example, if on AT the URL has the first digits as 20220121xxxxxxxxxxxxx, then that car has been advertised since 21/01/22........

Of one thing we can be certain - one, two or three people trying to influence the market on an obscure forum thread is hardly going to make any difference to car prices - the reality is out there, good, bad or indifferent. All i do know is that, having advertised 2 well priced and affordable cars in my household with no interest, no amount of talking it up is going to affect reality

Edited by volvos60s60 on Tuesday 24th May 18:21


Edited by volvos60s60 on Tuesday 24th May 18:27


Edited by volvos60s60 on Tuesday 24th May 18:43

carparkno1

1,434 posts

159 months

Tuesday 24th May 2022
quotequote all
Earthdweller said:
Theres 44 Enyak’s on the auto trader app

The cheapest is 39k, lots between 40-55k

The most expensive is 69k which is a founders launch edition ( 1-50 ) apparently

I’ve just specced a Sport to 59k easily on Skoda’s website .. there’s only 4 more expensive than that

None are 80k
My pal ordered an enyaq in Nov, got it in April. Paid 39k new. 80k is a misprice surely

av185

18,626 posts

128 months

Tuesday 24th May 2022
quotequote all
carparkno1 said:
Earthdweller said:
Theres 44 Enyak’s on the auto trader app

The cheapest is 39k, lots between 40-55k

The most expensive is 69k which is a founders launch edition ( 1-50 ) apparently

I’ve just specced a Sport to 59k easily on Skoda’s website .. there’s only 4 more expensive than that

None are 80k
My pal ordered an enyaq in Nov, got it in April. Paid 39k new. 80k is a misprice surely
There are obviously different models at higher prices.

A quick look threw this up immediately at £15k over list.


Fast Bug

11,772 posts

162 months

Tuesday 24th May 2022
quotequote all
av185 said:
Margin instead of volume equals higher prices and premiums over list price. Manufacturers make greater profits .

This is the way many manufacturers are going.... said this last year.
I disagree. As soon as manufacturing catches up with the backlog of orders, they'll be chasing volume again.

Also vehicles going for over list price makes no difference to the manufacturers bottom line, the difference will go in the sellers pockets.