One year old used car prices - realistic or not?
Discussion
Ever since I started lurking at PH, I've fallen into the PH-esque trap of idly browsing through Auto Trader and classifieds at stuff I either don't need, or can't afford (especially since I need to save up enough to get a house one day rather than my flat).
But the price of some of the used cars is astonishing. I found a few one year old examples of a particular tasty model with 5/6/7k miles, with prices of £36k to £38k. Full list price would be around £44k. Online car brokers quote around £38k or £39k.
Now why would I pay £38k (or anywhere near it) for a second-hand example when a similar amount of money could get me a brand new car, specified & equipped precisely how I want it, and without anyone else having owned it?
And let's face it, if I was fortunate enough to be in the position to consider spending £38k in cash on a car, I would've thought I'd be comfortably capable of finding the extra few k to climb into a brand new one.
I know they're not going to get the asking price for these cars, but some of these specific examples have been for sale for months, at large franchised dealers, with no significant price reductions. How long are they going to keep them, gradually losing value and manufacturer's warranty ticking away? What factors affect the tipping point at which a dealer will accept a seriously low-ball offer, rather than sit and wait for someone to offer an amount painfully close to a brand new car? I don't know much about the economics of used car dealing and stock-holding, but I'm curious what the logic is!
But the price of some of the used cars is astonishing. I found a few one year old examples of a particular tasty model with 5/6/7k miles, with prices of £36k to £38k. Full list price would be around £44k. Online car brokers quote around £38k or £39k.
Now why would I pay £38k (or anywhere near it) for a second-hand example when a similar amount of money could get me a brand new car, specified & equipped precisely how I want it, and without anyone else having owned it?
And let's face it, if I was fortunate enough to be in the position to consider spending £38k in cash on a car, I would've thought I'd be comfortably capable of finding the extra few k to climb into a brand new one.
I know they're not going to get the asking price for these cars, but some of these specific examples have been for sale for months, at large franchised dealers, with no significant price reductions. How long are they going to keep them, gradually losing value and manufacturer's warranty ticking away? What factors affect the tipping point at which a dealer will accept a seriously low-ball offer, rather than sit and wait for someone to offer an amount painfully close to a brand new car? I don't know much about the economics of used car dealing and stock-holding, but I'm curious what the logic is!
It's wishful thinking and is people chancing their arm. No way in this market are cars selling for the premiums that they went for ten years ago when you could pre-order cars and then sell them at a significant premium to the list price.
If you really want to see some ouch look at the likes of Audi RS6 from 2010 and the M5's of the same year. I just paid 23K for a 60K 2008 M5 so there are some billy bargains to be had.
If you really want to see some ouch look at the likes of Audi RS6 from 2010 and the M5's of the same year. I just paid 23K for a 60K 2008 M5 so there are some billy bargains to be had.
A few years ago, the misses was looking for a CRV (Big Honda loose 4x4 thing) - I was completely uniterested...
She'd spent a few weeks looking round and found several to view, couldn't believe the price, almost 1 yr old ones (at Honda Main dealers) were being punted out for £26.5k, with a brand new list price of £26k.. eh...?
At the time they said there was a 1 year waiting list for new one's, so were happy to sell upto a year old for list and over...!
I told the misses to stop being soo stupid, so ended up with a 120d (less than a year old & only 800 miles) for £4500 under list...
I suppose someone would have brought the CRV's, or they were just interested in selling new ones...
jj
She'd spent a few weeks looking round and found several to view, couldn't believe the price, almost 1 yr old ones (at Honda Main dealers) were being punted out for £26.5k, with a brand new list price of £26k.. eh...?
At the time they said there was a 1 year waiting list for new one's, so were happy to sell upto a year old for list and over...!
I told the misses to stop being soo stupid, so ended up with a 120d (less than a year old & only 800 miles) for £4500 under list...
I suppose someone would have brought the CRV's, or they were just interested in selling new ones...
jj
It's all very well looking at "new list price" but don't forget cars often have a lot of expensive options added. Hence used prices close to the headline list price.
Some people say "you can't sell a used xyz car unless it's got a,b and c options". I say cobblers. It's all a matter of getting the used price to a realistic level relative to the new cost of that particular car.
When buying a brand new car try to avoid specifying expensive options which add little or nothing to the used price.
Some people say "you can't sell a used xyz car unless it's got a,b and c options". I say cobblers. It's all a matter of getting the used price to a realistic level relative to the new cost of that particular car.
When buying a brand new car try to avoid specifying expensive options which add little or nothing to the used price.
obob said:
Why would you pay 8k more for a car just because no one has sat in it?
You're missing the point - you can buy the car from a broker for just £1-2K more and probably only a little more than that if you went to a main dealer and negotiated.Edited by daemon on Sunday 8th April 08:23
Whilst there are no doubt real bargains out there in nearly new cars i think a lot of people who think they are 'canny' buyers think they are saving money by only looking at the nearly new cars. Often these cars come with a spec you might not otherwise want (extras you wont use or at the other end extras missing that you would have wanted).
On top of that a lot of these premium car dealerships have used car sales staff and new car sales staff so it is not in the interest of the used car sales staff to point out how little more you could buy a new one for - they will conveniently quote the saving you are getting 'off list price' when noone ever pays list.
Often you are buying what is considered in the trade a 'year old' car by virtue of the fact for example that is was registered in 2011, but is being sold by the dealership as being 'just five months old', so come trade in time you will have lost a chunk of the money you thought you were saving anyway.
The other thing that people forget is that there are often finance deals and other offers only on new cars that arent on used cars which again will offset any perceived saving on a nearly new car.
The most recent example i saw of this was when my wife was looking at buying a z4. She looked at the demo car which on the face of it looked good value - just six months old (registered Nov 2011), low miles and nicely specced. List price was £36K and they were selling it for £30K. She then looked at the new car - 'free' upgrade from SE to M Sport, 8% discount and £2000 finance contribution which effectively brought the new car back to £29.5K including the extras she wanted.
On top of that a lot of these premium car dealerships have used car sales staff and new car sales staff so it is not in the interest of the used car sales staff to point out how little more you could buy a new one for - they will conveniently quote the saving you are getting 'off list price' when noone ever pays list.
Often you are buying what is considered in the trade a 'year old' car by virtue of the fact for example that is was registered in 2011, but is being sold by the dealership as being 'just five months old', so come trade in time you will have lost a chunk of the money you thought you were saving anyway.
The other thing that people forget is that there are often finance deals and other offers only on new cars that arent on used cars which again will offset any perceived saving on a nearly new car.
The most recent example i saw of this was when my wife was looking at buying a z4. She looked at the demo car which on the face of it looked good value - just six months old (registered Nov 2011), low miles and nicely specced. List price was £36K and they were selling it for £30K. She then looked at the new car - 'free' upgrade from SE to M Sport, 8% discount and £2000 finance contribution which effectively brought the new car back to £29.5K including the extras she wanted.
Edited by daemon on Sunday 8th April 08:24
daemon said:
Whilst there are no doubt real bargains out there in nearly new cars i think a lot of people who think they are 'canny' buyers think they are saving money by only looking at the nearly new cars. Often these cars come with a spec you might not otherwise want (extras you wont use or at the other end extras missing that you would have wanted).
On top of that a lot of these premium car dealerships have used car sales staff and new car sales staff so it is not in the interest of the used car sales staff to point out how little more you could buy a new one for - they will conveniently quote the saving you are getting 'off list price' when noone ever pays list.
Often you are buying what is considered in the trade a 'year old' car by virtue of the fact for example that is was registered in 2011, but is being sold by the dealership as being 'just five months old', so come trade in time you will have lost a chunk of the money you thought you were saving anyway.
The other thing that people forget is that there are often finance deals and other offers only on new cars that arent on used cars which again will offset any perceived saving on a nearly new car.
The most recent example i saw of this was when my wife was looking at buying a z4. She looked at the demo car which on the face of it looked good value - just six months old (registered Nov 2011), low miles and nicely specced. List price was £36K and they werDe selling it for £30K. She then looked at the new car - 'free' upgrade from SE to M Sport, 8% discount and £2000 finance contribution which effectively brought the new car back to £29.5K including the extras she wanted.
Nail. On. Head. On top of that a lot of these premium car dealerships have used car sales staff and new car sales staff so it is not in the interest of the used car sales staff to point out how little more you could buy a new one for - they will conveniently quote the saving you are getting 'off list price' when noone ever pays list.
Often you are buying what is considered in the trade a 'year old' car by virtue of the fact for example that is was registered in 2011, but is being sold by the dealership as being 'just five months old', so come trade in time you will have lost a chunk of the money you thought you were saving anyway.
The other thing that people forget is that there are often finance deals and other offers only on new cars that arent on used cars which again will offset any perceived saving on a nearly new car.
The most recent example i saw of this was when my wife was looking at buying a z4. She looked at the demo car which on the face of it looked good value - just six months old (registered Nov 2011), low miles and nicely specced. List price was £36K and they werDe selling it for £30K. She then looked at the new car - 'free' upgrade from SE to M Sport, 8% discount and £2000 finance contribution which effectively brought the new car back to £29.5K including the extras she wanted.
Edited by daemon on Sunday 8th April 08:24
I ordered a Skoda Superb Greenline last month brand new. The cheapest 1.6 model I could find on trader was £15k for an S model with 20k on it when a new one was £13.9k through Autoebid. The Elegance model I went for was about £1k more than a 6 month old used one with 10,000 miles and less options on it.
Skoda are running VAT off on new cars at the moment and have a reasonable waiting list so supply and demand dictates high used prices vs very good new prices. For me it was worth the wait but I hear of others who were in lease deals and needed cars quick so had to take ex-demo's or cancelled orders to get them in time.
Sometimes people just want the car right now and don't want to wait a few months for it. Those impulsive types don't care if its new or resale value further down the line. I myself am probably slightly skewed buying a new one too as a 4 year old used one with 80k on it would have been half the price. But I wanted certain options and the most economical engine which only came out 12 months ago, plus I decided to treat myself.
Skoda are running VAT off on new cars at the moment and have a reasonable waiting list so supply and demand dictates high used prices vs very good new prices. For me it was worth the wait but I hear of others who were in lease deals and needed cars quick so had to take ex-demo's or cancelled orders to get them in time.
Sometimes people just want the car right now and don't want to wait a few months for it. Those impulsive types don't care if its new or resale value further down the line. I myself am probably slightly skewed buying a new one too as a 4 year old used one with 80k on it would have been half the price. But I wanted certain options and the most economical engine which only came out 12 months ago, plus I decided to treat myself.
Cemesis said:
I ordered a Skoda Superb Greenline last month brand new. The cheapest 1.6 model I could find on trader was £15k for an S model with 20k on it when a new one was £13.9k through Autoebid. The Elegance model I went for was about £1k more than a 6 month old used one with 10,000 miles and less options on it.
Skoda are running VAT off on new cars at the moment and have a reasonable waiting list so supply and demand dictates high used prices vs very good new prices. For me it was worth the wait but I hear of others who were in lease deals and needed cars quick so had to take ex-demo's or cancelled orders to get them in time.
Sometimes people just want the car right now and don't want to wait a few months for it. Those impulsive types don't care if its new or resale value further down the line. I myself am probably slightly skewed buying a new one too as a 4 year old used one with 80k on it would have been half the price. But I wanted certain options and the most economical engine which only came out 12 months ago, plus I decided to treat myself.
Totally agree - there are situations whereby it does make sense to buy a 6 month old one - as you say if you need a car 'today' OR if you really are getting a fantastic deal. Its just that so often it only costs a few £££'s more to get a brand new one rather than last years model that half the country has driven like they stole it. Skoda are running VAT off on new cars at the moment and have a reasonable waiting list so supply and demand dictates high used prices vs very good new prices. For me it was worth the wait but I hear of others who were in lease deals and needed cars quick so had to take ex-demo's or cancelled orders to get them in time.
Sometimes people just want the car right now and don't want to wait a few months for it. Those impulsive types don't care if its new or resale value further down the line. I myself am probably slightly skewed buying a new one too as a 4 year old used one with 80k on it would have been half the price. But I wanted certain options and the most economical engine which only came out 12 months ago, plus I decided to treat myself.
Edited by daemon on Sunday 8th April 11:14
daemon said:
Whilst there are no doubt real bargains out there in nearly new cars...
Most notably from big dealerships at the end of the month after a registration plate half-yearly change. Their used car lot will be full of cars they'd rather convert into cash and which will help them achieve their sales target (personal or business) for the month.Ozzie Osmond said:
daemon said:
Whilst there are no doubt real bargains out there in nearly new cars...
Most notably from big dealerships at the end of the month after a registration plate half-yearly change. Their used car lot will be full of cars they'd rather convert into cash and which will help them achieve their sales target (personal or business) for the month.Also, arent you then getting a car from a previous plate registration which - according to glasses guide - will impact the used value anyway?
What you are saying is correct by the way, however it shouldnt be 'assumed' that you are getting the best deal possible without weighing up all the options.
Edited by daemon on Sunday 8th April 12:00
It always depends on the type of the car or the situation, model facelift, new reg month etc... there are some bargains to be had on both new and used. On a 6 month old preregistration or demo I'd be looking for a serious discount of around £1k per month of registration for a car up to £40k and £2k (or more) per month for a car over £40k ... not just a couple of grand.
A month or two back I bought a very well equipped 5 month old preregistration Jag XK with only 17 miles on the clock and I got it for £25k less than the list price.
Same price as new is ridiculous as you'll immediately lose out on depreciation, e.g. the minute you drive it off the forecourt the depreciation will backdate to the first reg date and not the purchase date.
A month or two back I bought a very well equipped 5 month old preregistration Jag XK with only 17 miles on the clock and I got it for £25k less than the list price.
Same price as new is ridiculous as you'll immediately lose out on depreciation, e.g. the minute you drive it off the forecourt the depreciation will backdate to the first reg date and not the purchase date.
Heres a really good example.
People over on hotukdeals have voted this deal HOT - a pre-reg Seat Ibiza 1.4 S for just £8995, and on the face of it, it is - a new one has a list price of £11995.
http://www.hotukdeals.com/deals/61-plate-pre-regis...
Even though you can get a 2012 one for less...
http://www.arnoldclark.com/used-cars/seat/ibiza/1....
And heres a brand new one for just £1000 more....
http://www.dennishorton.co.uk/seat/new-offers/new-...
People over on hotukdeals have voted this deal HOT - a pre-reg Seat Ibiza 1.4 S for just £8995, and on the face of it, it is - a new one has a list price of £11995.
http://www.hotukdeals.com/deals/61-plate-pre-regis...
Even though you can get a 2012 one for less...
http://www.arnoldclark.com/used-cars/seat/ibiza/1....
And heres a brand new one for just £1000 more....
http://www.dennishorton.co.uk/seat/new-offers/new-...
Redv8 said:
On a 6 month old preregistration or demo I'd be looking for a serious discount of around £1k per month of registration for a car up to £40k and £2k (or more) per month for a car over £40k ... not just a couple of grand.
£1k a month against list price? That would still be way out. It would need to be an easy £1K a month after discounted new price AND the spec would need to be perfect OR have extra spec 'free' before i'd consider it worthwhile.
There are deals to be had - my last couple of cars were <6mo old at a very good saving. Last one was 2.5k less than the drivethedeal price, which itself was 2k off list. Crucially, the car was right there in front of me, had the right options and I could have it in a couple of days. Factory order would have been about 16 weeks, but not guaranteed.
There is a lot of optimistic pricing on nearly-new stock but not everyone plans so far in advance to wait for the typical 12+ week delivery times. Some people just decide one weekend to change their car and dont want to wait more than a few weeks for it. Some people have an old car die, or get a new job on car allowance, or need more space for kids and can't really wait.
There is a lot of optimistic pricing on nearly-new stock but not everyone plans so far in advance to wait for the typical 12+ week delivery times. Some people just decide one weekend to change their car and dont want to wait more than a few weeks for it. Some people have an old car die, or get a new job on car allowance, or need more space for kids and can't really wait.
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