Secondhand car price crash?
Discussion
nickfrog said:
Fixed price with a DTC contract between the buyer and VW and a commission to the dealer rather than a margin. Presumably?
Which then allows the manufacturer to control discounts, etc. As per what Mercedes are doing.Another example of "be careful what you wish for" IMHO.
Tonberry said:
Even Car Dealer Magazine is panicking:
https://cardealermagazine.co.uk/publish/used-car-p...
The point always was that used car prices cannot rise or hold their levels indefinitely. Normal depreciation was always going to return and its doing that with extra on top if these falls continue.
BMW is delaying its launch of the ridiculous 'agency model' so they can see Mercedes fail with it first.
The funny money has dried up, its that simple. The bounce back loans have been spent and interest rates have risen.
There is no longer a massive queue out of showroom doors for X5s, Q7s, Range Rovers and Mercedes SUVs.
What are they on about taken by surprise.https://cardealermagazine.co.uk/publish/used-car-p...
The point always was that used car prices cannot rise or hold their levels indefinitely. Normal depreciation was always going to return and its doing that with extra on top if these falls continue.
BMW is delaying its launch of the ridiculous 'agency model' so they can see Mercedes fail with it first.
The funny money has dried up, its that simple. The bounce back loans have been spent and interest rates have risen.
There is no longer a massive queue out of showroom doors for X5s, Q7s, Range Rovers and Mercedes SUVs.
They must be idiots. That fact that prices have remained so strong in the face of the money taps being turned off is the surprise.
Thick or what.
Unreal said:
JaredVannett said:
Any opinions on E39 M5 pricing at the moment - well justified or complete fantasy land?
I know every year there is going to be slightly less on the road but it wasn't exactly low volume say relative to a 1M.
I often see them with asking prices of £25k-30k with high miles and owners - garage queen examples up around £35k-£40k last time I checked.
example: https://www.pistonheads.com/buy/listing/15895625
Sometimes I do wonder if fantasizing about 2000s cars is all a bit "rose-tinted" in that modern vehicles are a huge leap forward. I mean for less you could get a BMW F10 M5 - compromise on the manual?
My opinion. Fantasy land. Pre-facelift. All the signs of a seller trying to cash in before it's too late. Not a chance of getting anywhere near that money for it. I know every year there is going to be slightly less on the road but it wasn't exactly low volume say relative to a 1M.
I often see them with asking prices of £25k-30k with high miles and owners - garage queen examples up around £35k-£40k last time I checked.
example: https://www.pistonheads.com/buy/listing/15895625
Sometimes I do wonder if fantasizing about 2000s cars is all a bit "rose-tinted" in that modern vehicles are a huge leap forward. I mean for less you could get a BMW F10 M5 - compromise on the manual?
ChocolateFrog said:
What are they on about taken by surprise.
They must be idiots. That fact that prices have remained so strong in the face of the money taps being turned off is the surprise.
Thick or what.
If you scroll back 2-3 months on this very tread, you will see the sentiment was positive. Constant ‘what crash?’ posts, stating how they have been waiting since 2020 for the imaginary crash that is never coming. They must be idiots. That fact that prices have remained so strong in the face of the money taps being turned off is the surprise.
Thick or what.
Frimley111R said:
Unreal said:
JaredVannett said:
Any opinions on E39 M5 pricing at the moment - well justified or complete fantasy land?
I know every year there is going to be slightly less on the road but it wasn't exactly low volume say relative to a 1M.
I often see them with asking prices of £25k-30k with high miles and owners - garage queen examples up around £35k-£40k last time I checked.
example: https://www.pistonheads.com/buy/listing/15895625
Sometimes I do wonder if fantasizing about 2000s cars is all a bit "rose-tinted" in that modern vehicles are a huge leap forward. I mean for less you could get a BMW F10 M5 - compromise on the manual?
My opinion. Fantasy land. Pre-facelift. All the signs of a seller trying to cash in before it's too late. Not a chance of getting anywhere near that money for it. I know every year there is going to be slightly less on the road but it wasn't exactly low volume say relative to a 1M.
I often see them with asking prices of £25k-30k with high miles and owners - garage queen examples up around £35k-£40k last time I checked.
example: https://www.pistonheads.com/buy/listing/15895625
Sometimes I do wonder if fantasizing about 2000s cars is all a bit "rose-tinted" in that modern vehicles are a huge leap forward. I mean for less you could get a BMW F10 M5 - compromise on the manual?
Great cars in their day for sure.
Re: Agency Sales Model… others have mentioned (and I am sure there is much more depth to it) but effectively the dealership becomes a handover bay and not much else. You order via website or in the showroom but the price is the price, zero negotiation or dealer discount. The only incentive would be PCP deposit contributions from the brand itself - this is Direct To Consumer in real-time.
Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
carparkno1 said:
Re: Agency Sales Model… others have mentioned (and I am sure there is much more depth to it) but effectively the dealership becomes a handover bay and not much else. You order via website or in the showroom but the price is the price, zero negotiation or dealer discount. The only incentive would be PCP deposit contributions from the brand itself - this is Direct To Consumer in real-time.
Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
The core risk is that you ideally need the entire industry to switch because punters love a bargain that costs them more so basically, you're average mug will pay £40k to get a £5k discount rather than pay £30k for the same thing. Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
It sounds mad but it's exactly why incentives have been banned from consumer facing financial products. Punters will literally pay more on the back end for a synthetic discount on the front end. This effect is also why there are various consumer retail laws governing how long goods must be marketed and available at a price before they can be marketed with a discount (used to be 28 days and was also why TV manufacturers, among others, would have two identical products with different codes
)So the risk to a vendor of centralising price control is that the vendor next door just has to offer a fake discount and the bulk of the consumers will go there to get that 10% off as a bargain is a bargain. The upside is that you can dispose of high cost, pro negotiator Gary and replace him with some half price Dorris with big knockers that just runs a basic program of 10 SAY NUMBER. 20 SMILE. 30 FLASH TITS. 40 GOTO 10. The mark is then sent to the special bumming cubicle they're told how much money they can have and how many times they need to touch their toes to get it.
Jiebo said:
ChocolateFrog said:
What are they on about taken by surprise.
They must be idiots. That fact that prices have remained so strong in the face of the money taps being turned off is the surprise.
Thick or what.
If you scroll back 2-3 months on this very tread, you will see the sentiment was positive. Constant ‘what crash?’ posts, stating how they have been waiting since 2020 for the imaginary crash that is never coming. They must be idiots. That fact that prices have remained so strong in the face of the money taps being turned off is the surprise.
Thick or what.
I didn't realise they actually believed what they were saying.
There's one or two overzealous industry insiders on this thread who I automatically skip over their posts so may have missed some of it.
The vast majority of us have been saying no crash but a significant reversion to normality for the last couple of years. Its taken a lot longer than I expected TBH and still has a long way to go.
carparkno1 said:
Re: Agency Sales Model… others have mentioned (and I am sure there is much more depth to it) but effectively the dealership becomes a handover bay and not much else. You order via website or in the showroom but the price is the price, zero negotiation or dealer discount. The only incentive would be PCP deposit contributions from the brand itself - this is Direct To Consumer in real-time.
Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
I've no idea if it'll work or not and I'll never buy another new car so largely irrelevant to me BUT the thought of not having to deal with salesmen would strike me as a massive bonus to the buying experience. Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
ChocolateFrog said:
av185 said:
I bought and ran a 2 year old X reg 20k mile E39 M5 (no nav) in 2002 for £29k.
Great cars in their day for sure.
How much did you sell it for? Great cars in their day for sure.
Ran quite a few e39s 20 odd years back my favourites were the 530 manuals which were always cheap to buy because most wanted an auto but always sold well because they were quite rare.
carparkno1 said:
Re: Agency Sales Model… others have mentioned (and I am sure there is much more depth to it) but effectively the dealership becomes a handover bay and not much else. You order via website or in the showroom but the price is the price, zero negotiation or dealer discount. The only incentive would be PCP deposit contributions from the brand itself - this is Direct To Consumer in real-time.
Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
I witnessed something similar while contracting for one of the bigger construction supplies companies. The feeling at the top will be that the dealer salesmen aren’t very good because they can only make sales in a constrained supply environment or by selling at a loss. By controlling the sales price the margin is protected from sales people ‘giving the cars away’. Personally I abhor the idea of it and have struck Mercedes off the list entirely of cars I want to buy. Partly because shopping around is half the run and partly because it gives little to no incentive for a dealer to actually be half decent if the head office is setting the tone across the board.
Doesn’t sound like it has been successful and I am surprised VW are taking the plunge.
Not necessarily saying I agree with this approach, but that’s the logic for it. From the manufacturers point of view every element of cost is reviewed and justified (normally several times), then it goes into the dealer network where the sales price is governed like the Wild West. You can see why the suits might not approve this lack of control/oversight.
av185 said:
c£32500 from memory. It was a silver ex Leaseplan car with 1 owner and FBMWSH.
Ran quite a few e39s 20 odd years back my favourites were the 530 manuals which were always cheap to buy because most wanted an auto but always sold well because they were quite rare.
Bargain then.Ran quite a few e39s 20 odd years back my favourites were the 530 manuals which were always cheap to buy because most wanted an auto but always sold well because they were quite rare.
ChocolateFrog said:
The vast majority of us have been saying no crash but a significant reversion to normality for the last couple of years. Its taken a lot longer than I expected TBH and still has a long way to go.
I think it really depends on the definition of 'crash'. Prices adjusting back to normal slowly isn't a crash, prices halving in 12 months is...Strong adjustment downwards?
"Used car prices have fallen 13.7% since April, according to figures from trade pride experts Cap HPI, and they are on track to fall a further 4% at least in November."
At a time when annual inflation has been >10%; in real-terms used car prices are off by 20%.
4% fall in one month, is significant.
"Used car prices have fallen 13.7% since April, according to figures from trade pride experts Cap HPI, and they are on track to fall a further 4% at least in November."
At a time when annual inflation has been >10%; in real-terms used car prices are off by 20%.
4% fall in one month, is significant.
So agency, MINI go to agency in September and BMW follow Jan '25 along with VAG as already stated. From a manufacturer point of view they make more money per unit, however they can't push dealers to over perform or make problem vehicles go away with additional support. As a dealer you can potentially make more money per unit as well, and aren't burdened with stocking costs and demo write downs.
So whilst they'll lose market share, they'll be more profitable on what they sell. Which is what a lot of the manufacturers stated they wanted to do, less units but make more money. I think they've invested too heavily in to agency to switch back to a margin model and they'll monitor stock levels and adjust fleet support and customer offers accordingly.
I'd say agency is here to stay, but I've been wrong before
So whilst they'll lose market share, they'll be more profitable on what they sell. Which is what a lot of the manufacturers stated they wanted to do, less units but make more money. I think they've invested too heavily in to agency to switch back to a margin model and they'll monitor stock levels and adjust fleet support and customer offers accordingly.
I'd say agency is here to stay, but I've been wrong before
ChocolateFrog said:
av185 said:
I bought and ran a 2 year old X reg 20k mile E39 M5 (no nav) in 2002 for £29k.
Great cars in their day for sure.
How much did you sell it for? Great cars in their day for sure.
Vroomer said:
What is the 'agency model'?
Thanks.
A summary of the franchise vs agency model:Thanks.
https://www.autoexpress.co.uk/buying-car/357915/ag...
... and if there is still any confusion it basically means the "end" of this:
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