Will Coronavirus hit used car prices? (Vol 2)
Discussion
911hope said:
Tomanybikes said:
I don’t think the pre covid prices are relevant anymore.
The price at its peak will now fall at depreciation rates <> than usual because this is the new normal as we head towards EV.
Don't you think the increase in EV's will have a negative impact on used ICE car values. Eventually very few will want one..surely.The price at its peak will now fall at depreciation rates <> than usual because this is the new normal as we head towards EV.
There will also be less ICE cars sold, the closer we get to 2030 as people move early.
I think the right ICE car will fare pretty well for resale values up to and beyond 2030.
When the newspapers put the Fear of God in to people about buying new diesels RE: Dieselgate and punitive city taxes, people started avoiding buying diesels in their droves, however used values actually went up.
I wouldnt want to try to second guess the market personally. Our plan is to run big(gish) petrol engined cars as long as we can and have cars that arent just the easily replaced with an EV variant cooking models.
BlackR8 said:
To provide some balance I have been keeping an eye on 570S too, and seen plenty between £90-100k which have sold relatively quickly after coming onto the market. Last week a 2016 car came onto the market at a strong £96k and thats already sold, and there have been a few others like this.
The red one hasn’t dropped in price and it’s been for sale since around January/February it’s a lovely car and I’m watching it as it’s easy to watch being redDeep Thought said:
With respect, some of the "proof" on here that the market holds no water at all.
Driving past a car dealers with a full car lot does not mean cars are not selling.
Walking in to a dealers and there being noone in at that point in time does not mean cars are not selling.
Individual cars being discounted does not mean cars generally are not selling.
Private sellers selling off summer cars at the end of the season at lower than retail price does not mean cars are not selling - in fact its quite normal.
To use the corner shop / loaf of bread analogy again that someone used earlier - i could walk in to my local shop today at a particular point in time and the shelves could be stacked full of bread, there might be any amount of bread to buy, there might be no customers in the shop, but i certainly cant evidence that as saying people have stopped buying bread, can i?
To extend that analogy, there might be an offer on a particular brand of loaf offering it for a pound instead of £1.20. That again does not mean the price of bread generally is crashing.
The cardealermagazine / autotrader data insight link is quite telling.
https://cardealermagazine.co.uk/publish/auto-trade...
From autotraders actual data - not from some bloke who works there squinting at a car dealers lot as they drive past - car prices have rising for the 29th month in a row.
It is also worth noting the comments from their Data and Insights Director - ie, the guy who runs the division who gather insights from their data, NOT the "talk the market up lads" Director who said
"‘We’ve seen a number of misleading comments recently suggesting that the market is in a steep decline, prices are on the verge of crashing, or consumer demand has plummeted, but these are either based on insufficient data or a simple misinterpretation."
"Similar predictions have been made since the very beginning of the pandemic, but as we’ve said throughout, the data simply doesn’t support any of this sensationalist speculation."
Of the future he said - " ‘Although there are clear potential headwinds, consumer demand remains stable, and fuelled by the circa four million new and used car transactions lost since 2020, as well as a range of other macro-economic factors, we’re confident levels will be sustained. Coupled with ongoing supply challenges, these market dynamics will continue to keep prices strong for the foreseeable future.’"
Now, these guys are the experts in their field, with a wealth of data and buying trends at hand to gather insight from, NOT "well my mate said he saw a car that had £5K knocked off the price, and he also said he saw a car for sale for over a year so the markets crashed".
Actual claimed facts in the article..Driving past a car dealers with a full car lot does not mean cars are not selling.
Walking in to a dealers and there being noone in at that point in time does not mean cars are not selling.
Individual cars being discounted does not mean cars generally are not selling.
Private sellers selling off summer cars at the end of the season at lower than retail price does not mean cars are not selling - in fact its quite normal.
To use the corner shop / loaf of bread analogy again that someone used earlier - i could walk in to my local shop today at a particular point in time and the shelves could be stacked full of bread, there might be any amount of bread to buy, there might be no customers in the shop, but i certainly cant evidence that as saying people have stopped buying bread, can i?
To extend that analogy, there might be an offer on a particular brand of loaf offering it for a pound instead of £1.20. That again does not mean the price of bread generally is crashing.
The cardealermagazine / autotrader data insight link is quite telling.
https://cardealermagazine.co.uk/publish/auto-trade...
From autotraders actual data - not from some bloke who works there squinting at a car dealers lot as they drive past - car prices have rising for the 29th month in a row.
It is also worth noting the comments from their Data and Insights Director - ie, the guy who runs the division who gather insights from their data, NOT the "talk the market up lads" Director who said
"‘We’ve seen a number of misleading comments recently suggesting that the market is in a steep decline, prices are on the verge of crashing, or consumer demand has plummeted, but these are either based on insufficient data or a simple misinterpretation."
"Similar predictions have been made since the very beginning of the pandemic, but as we’ve said throughout, the data simply doesn’t support any of this sensationalist speculation."
Of the future he said - " ‘Although there are clear potential headwinds, consumer demand remains stable, and fuelled by the circa four million new and used car transactions lost since 2020, as well as a range of other macro-economic factors, we’re confident levels will be sustained. Coupled with ongoing supply challenges, these market dynamics will continue to keep prices strong for the foreseeable future.’"
Now, these guys are the experts in their field, with a wealth of data and buying trends at hand to gather insight from, NOT "well my mate said he saw a car that had £5K knocked off the price, and he also said he saw a car for sale for over a year so the markets crashed".
Year on year growth up 16%
One single claim of month on month growth, which was positive.
Reduction on views year on year.
Padded with lots of waffle.
Need to be wondering what information is missing.
All the other month on month figures.
Average price relative to the peak
Without these the article cannot be taken seriously.
e-honda said:
There is no misinterpretation of the data.
They are using the data to present a misleading picture.
They are referencing the month on month dead cat bounce that says prices rose slightly last month, conflating it with the year on year continued growth giving a picture of continued prices rises.
But it isn't the case, prices have fallen this year.
Auto trader have been very selective with the data they put into their industry reports so they can paint the picture they want, which is absolutely their right they are a car dealers service not an independent statistics service.
They do however release some raw data that is pretty clear
https://plc.autotrader.co.uk/press-centre/auto-tra...
The grey bars are in positive territory for 29 months, but the red line trending down for 6 months is also quite clear
The year on year statement is going to look quite bad in a few months time. Then there will be no denial possible.They are using the data to present a misleading picture.
They are referencing the month on month dead cat bounce that says prices rose slightly last month, conflating it with the year on year continued growth giving a picture of continued prices rises.
But it isn't the case, prices have fallen this year.
Auto trader have been very selective with the data they put into their industry reports so they can paint the picture they want, which is absolutely their right they are a car dealers service not an independent statistics service.
They do however release some raw data that is pretty clear
https://plc.autotrader.co.uk/press-centre/auto-tra...
The grey bars are in positive territory for 29 months, but the red line trending down for 6 months is also quite clear
911hope said:
nickfrog said:
By or more less than historical depreciation over the period?
In other words has there been any organic deflation of the bubble?
Individual cars suffer depreciation in most cases.In other words has there been any organic deflation of the bubble?
This effect should not be confused downward trends of the market as a whole.
The average age of the used fleet is likely to be pretty static.
But I agree that the fleet is pretty static age wise so the AT graph is a good barometer because of the massive sample size.
At the lower end of the market I imagine the government capping energy bills will help to prop up prices as otherwise discretionary income was going to fall off a cliff. That said higher interest rates and rising costs (especially food) will still take their toll.
Perhaps fewer people will be signing up to expensive leases to cut costs? Potentially more people working from home may also have an impact as lots of people are not back at the office full time.
Depending on the tax cuts coming, the prices of more expensive cars may rise, equally there seems to be shortages of chips/components still which could be a factor re supply. And money losing value could mean cars especially interesting ones could be a safe haven.
However all guesswork!
Perhaps fewer people will be signing up to expensive leases to cut costs? Potentially more people working from home may also have an impact as lots of people are not back at the office full time.
Depending on the tax cuts coming, the prices of more expensive cars may rise, equally there seems to be shortages of chips/components still which could be a factor re supply. And money losing value could mean cars especially interesting ones could be a safe haven.
However all guesswork!
nickfrog said:
I wasn't conflating dep and trend. Just trying to see if one was enough to offset the other.
But I agree that the fleet is pretty static age wise so the AT graph is a good barometer because of the massive sample size.
Does that mean you agree the trend is downwards, as the raw AT graph shows?But I agree that the fleet is pretty static age wise so the AT graph is a good barometer because of the massive sample size.
911hope said:
nickfrog said:
I wasn't conflating dep and trend. Just trying to see if one was enough to offset the other.
But I agree that the fleet is pretty static age wise so the AT graph is a good barometer because of the massive sample size.
Does that mean you agree the trend is downwards, as the raw AT graph shows?But I agree that the fleet is pretty static age wise so the AT graph is a good barometer because of the massive sample size.
Edited by nickfrog on Wednesday 14th September 10:10
TomJS said:
At the lower end of the market I imagine the government capping energy bills will help to prop up prices as otherwise discretionary income was going to fall off a cliff. That said higher interest rates and rising costs (especially food) will still take their toll.
Yes I was thinking the same about the energy price cap. I was actually hopeful that the original steep rise in energy prices from October would make prices fall more sharply or quickly in the lower end of the used car market. I don't know how typical my situation is but my energy bills were very affordable last year, and even with the rises this year are still very affordable (and I am not 'well off' according to most people's definition). My entire gas and electric bills for 2021 were under £600. The £400 which the government is putting on everyone's energy accounts this year will pay most or all of my energy bill for the next two quarters even at the higher unit rates than last year.
I see a big disconnect between the moaning in certain parts of the press and far left echo chambers on reddit that everyone in the UK is starving and freezing, and the reality of people still filling their shopping trolleys with luxuries and buying cars at these historically inflated prices.
The ONS have the peak of the increase being up 30% in around 6 months. Then it being flat for 3-4 months then falling 10% in 3-4 months. It's now been fairly flat for the last 2 months. If that is the floor the there wasn't really a bubble, it was a genuine rise with an overshoot and a correction.
But personally I see it falling another 10% by next spring. If that happens I think we can fairly call it a bubble.
But personally I see it falling another 10% by next spring. If that happens I think we can fairly call it a bubble.
Seraph14 said:
TomJS said:
At the lower end of the market I imagine the government capping energy bills will help to prop up prices as otherwise discretionary income was going to fall off a cliff. That said higher interest rates and rising costs (especially food) will still take their toll.
Yes I was thinking the same about the energy price cap. I was actually hopeful that the original steep rise in energy prices from October would make prices fall more sharply or quickly in the lower end of the used car market. I don't know how typical my situation is but my energy bills were very affordable last year, and even with the rises this year are still very affordable (and I am not 'well off' according to most people's definition). My entire gas and electric bills for 2021 were under £600. The £400 which the government is putting on everyone's energy accounts this year will pay most or all of my energy bill for the next two quarters even at the higher unit rates than last year.
I see a big disconnect between the moaning in certain parts of the press and far left echo chambers on reddit that everyone in the UK is starving and freezing, and the reality of people still filling their shopping trolleys with luxuries and buying cars at these historically inflated prices.
I don't think they are saying starving and freezing, but if people have less money in their pockets - will the car market finally reverse the covid bubble and how far will car prices fall.
time waster said:
600 for a year probably is on the low side. Even with government assistance energy prices have gone up a lot. Also food inflation at 10 percent too. There is no help for that, and that's before interest rate rises start to bite.
I don't think they are saying starving and freezing, but if people have less money in their pockets - will the car market finally reverse the covid bubble and how far will car prices fall.
Millions of people on low incomes (even if in work) also get £650 which will help towards other costs. Plus the £150 council tax rebate earlier in the year. I don't think they are saying starving and freezing, but if people have less money in their pockets - will the car market finally reverse the covid bubble and how far will car prices fall.
I realise a lot of people will still struggle because they can't manage their money though, and no matter how much they get, they find a way to spend it and then complain that the government is to blame. I haven't got a lot of patience for those people.
time waster said:
600 for a year probably is on the low side. Even with government assistance energy prices have gone up a lot. Also food inflation at 10 percent too. There is no help for that, and that's before interest rate rises start to bite.
I don't think they are saying starving and freezing, but if people have less money in their pockets - will the car market finally reverse the covid bubble and how far will car prices fall.
On the low side I’am almost that a month. I don't think they are saying starving and freezing, but if people have less money in their pockets - will the car market finally reverse the covid bubble and how far will car prices fall.
Tomanybikes said:
time waster said:
600 for a year probably is on the low side. Even with government assistance energy prices have gone up a lot. Also food inflation at 10 percent too. There is no help for that, and that's before interest rate rises start to bite.
I don't think they are saying starving and freezing, but if people have less money in their pockets - will the car market finally reverse the covid bubble and how far will car prices fall.
On the low side I’am almost that a month. I don't think they are saying starving and freezing, but if people have less money in their pockets - will the car market finally reverse the covid bubble and how far will car prices fall.
ghost83 said:
BlackR8 said:
To provide some balance I have been keeping an eye on 570S too, and seen plenty between £90-100k which have sold relatively quickly after coming onto the market. Last week a 2016 car came onto the market at a strong £96k and thats already sold, and there have been a few others like this.
The red one hasn’t dropped in price and it’s been for sale since around January/February it’s a lovely car and I’m watching it as it’s easy to watch being red-CB
time waster said:
chickenbarns said:
AlexNJ89 said:
nickfrog said:
Maybe, maybe not. Who knows?
Plenty of forces at play, not just demand.
Agreed, we learned during covid that we can't predict what will happen.Plenty of forces at play, not just demand.
time waster said:
its already started
it is only a fluctuation.-CB
e-honda said:
The ONS have the peak of the increase being up 30% in around 6 months. Then it being flat for 3-4 months then falling 10% in 3-4 months. It's now been fairly flat for the last 2 months. If that is the floor the there wasn't really a bubble, it was a genuine rise with an overshoot and a correction.
But personally I see it falling another 10% by next spring. If that happens I think we can fairly call it a bubble.
how much has the price risen by since covid and short supply? I thought it was 45% rise. if it is 30% and you say it is already dropped 10% another 10% would make that 20%. I dont see 20% drop out of 30% or 45% riseBut personally I see it falling another 10% by next spring. If that happens I think we can fairly call it a bubble.
-CB
Edited by chickenbarns on Wednesday 14th September 23:20
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