Will Coronavirus hit used car prices?
Discussion
JQ said:
Sevenon said:
I am not in the trade or in the know, just your average Joe. I said several pages ago back in April (When Sunak announced the Furlough scheme), that prices won't drop until September. Now that furlough has been somewhat extended from the initial 3 months (March,April, May) to the end of August, plus the additional schemes like payment / mortgage holidays till October, I am still predicting used car prices to drop by at least 20%, but won't be until winter. I'm guessing December / January / February will be where we see this.
Nobody will see bargains in June. Mass redundancies at a large scale across many industries will hit in September.
This is my view also.Nobody will see bargains in June. Mass redundancies at a large scale across many industries will hit in September.
Edited by Sevenon on Thursday 4th June 15:30
We're in such a weird limbo stage at the moment.
growlerowl said:
Forgive me, I'm in a spouting nonsense and cherry picking mood again:
'IMF projects suggest that the coronavirus recession will be the most severe global economic downturn since the Great Depression, and that it will be "far worse" than the Great Recession of 2009.'
'Two reports this week predicted that global growth will struggle to bounce back from the lockdowns, travel restrictions and business closures meant to contain the pandemic.
IHS Markit said that it expects the world economy to shrink 5.5% this year, triple the damage it sustained in the 2008 financial crisis, and then struggle to regain traction.
“While growth in the hardest-hit economies may snap back briefly, the momentum will soon fade,’’ the London-based financial research firm warned.
It expects the US economy to contract by 7.3% this year and the collective economy of the 19 European countries that share the euro currency to recoil 8.6%.
(1) Hobbling the rebound, IHS predicts, will be a wave of business bankruptcies and cautious spending by consumers trying to repair their household finances and uneasy about resuming old habits that drive economic growth — shopping, eating out, booking vacations and going to the cinema.
Deutsche Bank Wealth Management warned that a “hoped-for’’ rebound in the second half of 2020 won’t be strong enough to undo the damage absorbed in the first, at least among the advanced economies of the United States, Europe and Japan.
(2) “We don’t expect developed economies output to be back to pre-crisis levels until 2022,’’ the report said'
'The economy of the European Union is expected to shrink by 7.4 percent in 2020, following the outbreak of Coronavirus (COVID-19) in early 2020, with an economic recovery anticipated in 2021. Greece and Italy are set to be the worst affected economies, seeing GDP decline by 9.7 and 9.5 respectively, while Poland is forecast to shrink by 4.3 percent and shrink the least in 2020.'
'The world economy is in its most precarious position since the global financial crisis.
Global growth, cooling for the past two years to a subdued level, has been dealt a nasty blow by the coronavirus. High frequency indicators such as coal demand, suggest the Chinese economy slowed sharply in the first quarter of 2020. As China accounts for 17% of global GDP, 11% of world trade, 9% of global tourism and over 40% of global demand of some commodities, negative spillovers to the rest of the world are sizeable. There is mounting evidence of sharp declines in tourism, supply chain disruptions, weak commodity demand and falling consumer confidence.'
(3) But it'll blow over and we'll be back to normal in no time thinking 'what was that all about?' eh! Think about the opportunities! It'll be bad, but we'll get through it! Nobody can predict what the future holds and those that think they can are stupid! Etc etc etc
(1) Thats going to be key. Unfortunately there were a large number of large economically fragile businesses about that will have been tipped over the edge because of this. 'IMF projects suggest that the coronavirus recession will be the most severe global economic downturn since the Great Depression, and that it will be "far worse" than the Great Recession of 2009.'
'Two reports this week predicted that global growth will struggle to bounce back from the lockdowns, travel restrictions and business closures meant to contain the pandemic.
IHS Markit said that it expects the world economy to shrink 5.5% this year, triple the damage it sustained in the 2008 financial crisis, and then struggle to regain traction.
“While growth in the hardest-hit economies may snap back briefly, the momentum will soon fade,’’ the London-based financial research firm warned.
It expects the US economy to contract by 7.3% this year and the collective economy of the 19 European countries that share the euro currency to recoil 8.6%.
(1) Hobbling the rebound, IHS predicts, will be a wave of business bankruptcies and cautious spending by consumers trying to repair their household finances and uneasy about resuming old habits that drive economic growth — shopping, eating out, booking vacations and going to the cinema.
Deutsche Bank Wealth Management warned that a “hoped-for’’ rebound in the second half of 2020 won’t be strong enough to undo the damage absorbed in the first, at least among the advanced economies of the United States, Europe and Japan.
(2) “We don’t expect developed economies output to be back to pre-crisis levels until 2022,’’ the report said'
'The economy of the European Union is expected to shrink by 7.4 percent in 2020, following the outbreak of Coronavirus (COVID-19) in early 2020, with an economic recovery anticipated in 2021. Greece and Italy are set to be the worst affected economies, seeing GDP decline by 9.7 and 9.5 respectively, while Poland is forecast to shrink by 4.3 percent and shrink the least in 2020.'
'The world economy is in its most precarious position since the global financial crisis.
Global growth, cooling for the past two years to a subdued level, has been dealt a nasty blow by the coronavirus. High frequency indicators such as coal demand, suggest the Chinese economy slowed sharply in the first quarter of 2020. As China accounts for 17% of global GDP, 11% of world trade, 9% of global tourism and over 40% of global demand of some commodities, negative spillovers to the rest of the world are sizeable. There is mounting evidence of sharp declines in tourism, supply chain disruptions, weak commodity demand and falling consumer confidence.'
(3) But it'll blow over and we'll be back to normal in no time thinking 'what was that all about?' eh! Think about the opportunities! It'll be bad, but we'll get through it! Nobody can predict what the future holds and those that think they can are stupid! Etc etc etc
(2) Yup. Sounds about right. 2 years before we're back to previous levels of output.
(3) Who said it was all going to blow over and we'd be back to normal in no time?
Edited by Deep Thought on Thursday 4th June 19:56
CAPP0 said:
I haven't read the whole thread, but I just wonder whether it's the case that having been locked down for many weeks, the dealers will take offers just to shift a car or two and get some cash in the bank? Or is it the case that they can't afford to lose any more money so they'll sit on stock until someone pays the sticker price thus protecting their margin?
The current feedback seems to be that they're not having to discount because demand levels are high based on pent up demand.How long that lasts remains to be seen.
growlerowl said:
Forgive me, I'm in a spouting nonsense and cherry picking mood again:
But it'll blow over and we'll be back to normal in no time thinking 'what was that all about?' eh! Think about the opportunities! It'll be bad, but we'll get through it! Nobody can predict what the future holds and those that think they can are stupid! Etc etc etc
No, but I’ve been following prices of E46 BMW 330i and they’ve been holding steady - no movement. This means prices will not be affected But it'll blow over and we'll be back to normal in no time thinking 'what was that all about?' eh! Think about the opportunities! It'll be bad, but we'll get through it! Nobody can predict what the future holds and those that think they can are stupid! Etc etc etc
growlerowl said:
Forgive me, I'm in a spouting nonsense and cherry picking mood again:
'IMF projects suggest that the coronavirus recession will be the most severe global economic downturn since the Great Depression, and that it will be "far worse" than the Great Recession of 2009.'
'Two reports this week predicted that global growth will struggle to bounce back from the lockdowns, travel restrictions and business closures meant to contain the pandemic.
IHS Markit said that it expects the world economy to shrink 5.5% this year, triple the damage it sustained in the 2008 financial crisis, and then struggle to regain traction.
“While growth in the hardest-hit economies may snap back briefly, the momentum will soon fade,’’ the London-based financial research firm warned.
It expects the US economy to contract by 7.3% this year and the collective economy of the 19 European countries that share the euro currency to recoil 8.6%.
Hobbling the rebound, IHS predicts, will be a wave of business bankruptcies and cautious spending by consumers trying to repair their household finances and uneasy about resuming old habits that drive economic growth — shopping, eating out, booking vacations and going to the cinema.
Deutsche Bank Wealth Management warned that a “hoped-for’’ rebound in the second half of 2020 won’t be strong enough to undo the damage absorbed in the first, at least among the advanced economies of the United States, Europe and Japan.
“We don’t expect developed economies output to be back to pre-crisis levels until 2022,’’ the report said'
'The economy of the European Union is expected to shrink by 7.4 percent in 2020, following the outbreak of Coronavirus (COVID-19) in early 2020, with an economic recovery anticipated in 2021. Greece and Italy are set to be the worst affected economies, seeing GDP decline by 9.7 and 9.5 respectively, while Poland is forecast to shrink by 4.3 percent and shrink the least in 2020.'
'The world economy is in its most precarious position since the global financial crisis.
Global growth, cooling for the past two years to a subdued level, has been dealt a nasty blow by the coronavirus. High frequency indicators such as coal demand, suggest the Chinese economy slowed sharply in the first quarter of 2020. As China accounts for 17% of global GDP, 11% of world trade, 9% of global tourism and over 40% of global demand of some commodities, negative spillovers to the rest of the world are sizeable. There is mounting evidence of sharp declines in tourism, supply chain disruptions, weak commodity demand and falling consumer confidence.'
But it'll blow over and we'll be back to normal in no time thinking 'what was that all about?' eh! Think about the opportunities! It'll be bad, but we'll get through it! Nobody can predict what the future holds and those that think they can are stupid! Etc etc etc
At the risk of taking on DT's mantle of replying to every comment, these quotes are all valid, but context is the key.'IMF projects suggest that the coronavirus recession will be the most severe global economic downturn since the Great Depression, and that it will be "far worse" than the Great Recession of 2009.'
'Two reports this week predicted that global growth will struggle to bounce back from the lockdowns, travel restrictions and business closures meant to contain the pandemic.
IHS Markit said that it expects the world economy to shrink 5.5% this year, triple the damage it sustained in the 2008 financial crisis, and then struggle to regain traction.
“While growth in the hardest-hit economies may snap back briefly, the momentum will soon fade,’’ the London-based financial research firm warned.
It expects the US economy to contract by 7.3% this year and the collective economy of the 19 European countries that share the euro currency to recoil 8.6%.
Hobbling the rebound, IHS predicts, will be a wave of business bankruptcies and cautious spending by consumers trying to repair their household finances and uneasy about resuming old habits that drive economic growth — shopping, eating out, booking vacations and going to the cinema.
Deutsche Bank Wealth Management warned that a “hoped-for’’ rebound in the second half of 2020 won’t be strong enough to undo the damage absorbed in the first, at least among the advanced economies of the United States, Europe and Japan.
“We don’t expect developed economies output to be back to pre-crisis levels until 2022,’’ the report said'
'The economy of the European Union is expected to shrink by 7.4 percent in 2020, following the outbreak of Coronavirus (COVID-19) in early 2020, with an economic recovery anticipated in 2021. Greece and Italy are set to be the worst affected economies, seeing GDP decline by 9.7 and 9.5 respectively, while Poland is forecast to shrink by 4.3 percent and shrink the least in 2020.'
'The world economy is in its most precarious position since the global financial crisis.
Global growth, cooling for the past two years to a subdued level, has been dealt a nasty blow by the coronavirus. High frequency indicators such as coal demand, suggest the Chinese economy slowed sharply in the first quarter of 2020. As China accounts for 17% of global GDP, 11% of world trade, 9% of global tourism and over 40% of global demand of some commodities, negative spillovers to the rest of the world are sizeable. There is mounting evidence of sharp declines in tourism, supply chain disruptions, weak commodity demand and falling consumer confidence.'
But it'll blow over and we'll be back to normal in no time thinking 'what was that all about?' eh! Think about the opportunities! It'll be bad, but we'll get through it! Nobody can predict what the future holds and those that think they can are stupid! Etc etc etc
Yes, if you have a year where one quarter has a significant and sustained decline in GDP then the figures will undoubtedly look poor. This year will be shocking in comparison to previous years. But we all need to be careful when evaluating short term economic data. Will we all be rejoicing at massive recovery growth YoY in 2021 for example, I doubt it.
Unlike previous recessions, where demand has fallen, we've seen a reduction in both supply AND demand, anyone who has done intermediate-level economics will know that if supply and demand both fall in equal measure, prices do not (necessarily). Any long term effect on used cars (which is what this thread is about) will be lead by the behaviour of the manufacturers when it comes to new-car pricing. If they slash prices to maintain demand in new vehicles, but maintain volume, then used car prices will follow suit and fall, it has to as there will be an over supply vs. demand. If they alter either their discount model or their production volumes, then prices may not. The short term value of used cars is about who blinks first.
Edited by Inky81 on Thursday 4th June 20:14
Inky81 said:
At the risk of taking on DT's mantle of replying to every comment, these quotes are all valid, but context is the key.
Yes, if you have a year where one quarter has a significant and sustained decline in GDP then the figures will undoubtedly look poor. This year will be shocking in comparison to previous years. But we all need to be careful when evaluating short term economic data. Will we all be rejoicing at massive recovery growth YoY in 2021 for example, I doubt it.
Unlike previous recessions, where demand has fallen, we've seen a reduction in both supply AND demand, anyone who has done intermediate-level economics will know that if supply and demand both fall in equal measure, prices do not (necessarily). Any long term effect on used cars (which is what this thread is about) will be lead by the behaviour of the manufacturers when it comes to new-car pricing. If they slash prices to maintain demand in new vehicles, but maintain volume, then used car prices will follow suit and fall, it has to as there will be an over supply vs. demand. If they alter either their discount model or their production volumes, then prices may not. The short term value of used cars is about who blinks first.
Yes, but you are not taking into consideration, demand. Most of the posters in this thread are concentrating on what they expect to be a fall in demand for various reasons including redundancies, furlough, WFH and the general uncertainty in the economy. Without the demand for cars, the argument is that prices will fall, or some dealers will go bust if they hold out for Pre-COVID prices.Yes, if you have a year where one quarter has a significant and sustained decline in GDP then the figures will undoubtedly look poor. This year will be shocking in comparison to previous years. But we all need to be careful when evaluating short term economic data. Will we all be rejoicing at massive recovery growth YoY in 2021 for example, I doubt it.
Unlike previous recessions, where demand has fallen, we've seen a reduction in both supply AND demand, anyone who has done intermediate-level economics will know that if supply and demand both fall in equal measure, prices do not (necessarily). Any long term effect on used cars (which is what this thread is about) will be lead by the behaviour of the manufacturers when it comes to new-car pricing. If they slash prices to maintain demand in new vehicles, but maintain volume, then used car prices will follow suit and fall, it has to as there will be an over supply vs. demand. If they alter either their discount model or their production volumes, then prices may not. The short term value of used cars is about who blinks first.
Edited by Inky81 on Thursday 4th June 20:14
On the supply side, I expect manufacturers to invent schemes to attract buyers and the used car dealers with healthy balance sheets will do well.
The rest is conjecture.
maz8062 said:
Yes, but you are not taking into consideration, demand. Most of the posters in this thread are concentrating on what they expect to be a fall in demand for various reasons including redundancies, furlough, WFH and the general uncertainty in the economy. Without the demand for cars, the argument is that prices will fall, or some dealers will go bust if they hold out for Pre-COVID prices.
On the supply side, I expect manufacturers to invent schemes to attract buyers and the used car dealers with healthy balance sheets will do well.
The rest is conjecture.
I mention/consider demand 4 times in my post??. Otherwise, I agree, overall used values will be subject to new car deals/manufacture support.On the supply side, I expect manufacturers to invent schemes to attract buyers and the used car dealers with healthy balance sheets will do well.
The rest is conjecture.
Edit to add: if you're talking about overall demand/requirement to personal transport then yes, valid point. But I think overall fall in demand for cars will be minimal, whilst overall mileage will fall.
Edited by Inky81 on Thursday 4th June 20:50
Throttlebody said:
limpsfield said:
Economists have forecast 16 of the previous 6 recessions.
Make that 7. We're already in it. This one’s the special edition.limpsfield said:
Throttlebody said:
limpsfield said:
Economists have forecast 16 of the previous 6 recessions.
Make that 7. We're already in it. This one’s the special edition.Throttlebody said:
limpsfield said:
Throttlebody said:
limpsfield said:
Economists have forecast 16 of the previous 6 recessions.
Make that 7. We're already in it. This one’s the special edition.Deep Thought said:
CAPP0 said:
I haven't read the whole thread, but I just wonder whether it's the case that having been locked down for many weeks, the dealers will take offers just to shift a car or two and get some cash in the bank? Or is it the case that they can't afford to lose any more money so they'll sit on stock until someone pays the sticker price thus protecting their margin?
The current feedback seems to be that they're not having to discount because demand levels are high based on pent up demand.How long that lasts remains to be seen.
So, is coronavirus hitting used car prices? I'm one of those sad individuals who spends hours and hours looking at Autotrader and Facebay at various potential purchases. I tend to look at older stuff and I think if anything prices of those cars have risen of late. Example, early Honda Civic Type R FN2. Before Christmas I saw several going for £3000-£3500 in my area. Ditto Mk5 Golf GTI. Now, they seem to be creeping up towards the £4K level. Another car I look out for is the Fiesta ST Mk7. Prices don't seem to have dropped below £7K for early examples this year.....
Anonymous-poster said:
The manufacturer smoke and mirrors has started already!
Audi offering first 4 months payment free and up to £18k off and Fiat/Alfa offering 12 months free redundancy insurance on new cars!
Incredible - Used car sales 1-3 years old will tank. Audi offering first 4 months payment free and up to £18k off and Fiat/Alfa offering 12 months free redundancy insurance on new cars!
What are audi doing regarding the 18k? What model?
Aftershox said:
Anonymous-poster said:
The manufacturer smoke and mirrors has started already!
Audi offering first 4 months payment free and up to £18k off and Fiat/Alfa offering 12 months free redundancy insurance on new cars!
Incredible - Used car sales 1-3 years old will tank. Audi offering first 4 months payment free and up to £18k off and Fiat/Alfa offering 12 months free redundancy insurance on new cars!
What are audi doing regarding the 18k? What model?
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