Secondhand car price crash?

[nickfrog]

nick1871 said:

For the vast majority of car buyers they just look at the current prices as the norm, they aren’t going back comparing prices from 2/3/4 years ago. They are unaware they are being ‘bent over’ as you say. I don’t agree they are being bent over, market forces dictate the prices, not the dealers.

I agree with Deep Thought, higher prices are here for the foreseeable. If you wait another 12 months the situation could be even worse.

I don't think many are getting bent over from a cost of change point of view. It is probably a little more than a few years ago of course but no more than inflation unless you don't have a car to sell of course or if it has not gone up commensurately. We might even be in a lower depreciation environment now overall, not unlike the level seen in similarly sized other European nations for many years.

[cheesejunkie]

ChrisH72 said:

That's what I meant, there's no shortage of buyers for all these expensive cars. That's despite all the economic doom and gloom.

I can understand people not buying houses. According to the papers a massive property price crash is imminent. In reality I'd expect them to do what usually happens in recession which is to fall slightly in the short term before going up yet again. Not dissimilar to the used car market but most people aren't really aware of car prices unless they're thinking of changing.

The car price crash relies on a myth that isn’t true. “Lots are driving cars they can’t afford”. It’s evidently bullst.

House market is different. Rental costs and mortgage costs are not sustainable, someone is going to get burned. But the bubble can go an unpredictable while yet.

The difference between houses and cars is I couldn’t give a st what houses cost as I don’t buy them every few years but some think prices matter when price to change is what counts.

[ice729091]

nickfrog said:

I don't think many are getting bent over from a cost of change point of view. It is probably a little more than a few years ago of course but no more than inflation unless you don't have a car to sell of course or if it has not gone up commensurately. We might even be in a lower depreciation environment now overall, not unlike the level seen in similarly sized other European nations for many years.

Anyone paying current used prices is clearly getting fked, as soon as supply starts returning to normal we'll see more usual rates of depreciation returning, as Covid was just a blip.

All this talk of "new normal" is nonsense.

[Deep Thought]

AlexNJ89 said:

Deep Thought said:

How long do you wait though? Prices have been high for nearly 3 years. Theres no sign of anything other than normal depreciation going forward for most cars (EVs and big SUVs are the notable exceptions). Maybe its time to accept (as i have) that this is now the new normal for pricing?

This is true, but surely we've got to now be looking at the global economic climate?

Do people really though?

The economic outlook appears much better than we were being told 6 months ago. Inflation to go down by year end, interest rates about to peak, energy prices on their way down....

Does Joe Public really care about the global economic climate? And when has there not been a global economic climate of some sort looming to worry about?

[Deep Thought]

ChrisH72 said:

I find it interesting that people can't buy these overpriced cars quickly enough. The cars I look at dipped a little in February but have now gone up even more than they were before. They seem to be selling too.

For the time being I'm afraid I am out. Now considering just keeping my perfectly good car a bit longer. With my low mileage it would probably do another 10 years if necessary.

Which is fine, but then you're 10 years older, and you've done without something for 10 years.... to save, what?

Granted, i cant recall what you're looking to buy, but unless its £50K-£100K and likely to crash over that time, how much are we really talking about "saving" over that time?

[Fusion777]

MrManual said:

Why can't people just vote with their wallets and say no to these ridiculous prices.

I currently drive a 16 year old Astra with 140k+ miles, it's worth next to nothing and I've wanted to upgrade for the last 2 years but seeing these prices has put me off entirely now as it's just getting worse and not better.

Also my car surprisingly passed it's MOT so another 12 months of hopefully cheap motoring.

I know I might be in the minority in not caring about driving around in a banger for the foreseeable future but do the general public enjoy getting bent over when it comes to buying and selling cars???

Edited by MrManual on Saturday 18th March 14:49

So long as people think they can afford it, they'll continue to buy. Very few people apply much scrutiny to their personal finances or even appear to care. The ones that do pay attention are normally the ones that can easily afford things anyway.

[Deep Thought]

cheesejunkie said:

The car price crash relies on a myth that isn’t true. “Lots are driving cars they can’t afford”. It’s evidently bullst.

Exactly. I see our Schadenfreude friend ThrottleBody seems to have fallen silent of late for whatever reason, as are some of the sneerers who love to tell us how those PCPing cant afford it, when in reality, it seems they can. No weeping and wailing in the streets as cars were repossessed, no massive car price crash, no comeuppance.

[Deep Thought]

ice729091 said:

Anyone paying current used prices is clearly getting fked, as soon as supply starts returning to normal we'll see more usual rates of depreciation returning, as Covid was just a blip.

All this talk of "new normal" is nonsense.

There are two problems with that -

Firstly, there are some 2-3 million car transactions that simply didnt happen. That means there is a hole that size in the used car market, that will never be filled (in any meaningful timescale)

Secondly, new car prices have went up dramatically, due to large cost increases. Used car values are ultimately a percentage of new car price. New car prices up = used car prices up.

And we have already seen more usual rates of depreciation returning - just that they are from the peak that we have experienced, not from what they were.

[ChrisH72]

Deep Thought said:

ChrisH72 said:

I find it interesting that people can't buy these overpriced cars quickly enough. The cars I look at dipped a little in February but have now gone up even more than they were before. They seem to be selling too.

For the time being I'm afraid I am out. Now considering just keeping my perfectly good car a bit longer. With my low mileage it would probably do another 10 years if necessary.

Which is fine, but then you're 10 years older, and you've done without something for 10 years.... to save, what?

Granted, i cant recall what you're looking to buy, but unless its £50K-£100K and likely to crash over that time, how much are we really talking about "saving" over that time?

That’s all true. In reality I won’t keep my car for 10 years but it’s doing no harm at the moment and I’m still very undecided about what to buy next. I had a budget of up to 20k in mind but that doesn’t really get much of an upgrade on what I have (current value between 7-8k). Problem is I’m looking at cars around 3 years old which are precisely the ones in short supply so priced accordingly.

I did happen to notice that a 2020 mini electric is about the same price as a petrol cooper s. It’s not something I’ve thought about before and still not sure I’m ready for an EV. But it would definitely work fine for my use. Never driven an EV or wanted one before but it’s always an option.

[SWoll]

Deep Thought said:

Do people really though?

The economic outlook appears much better than we were being told 6 months ago. Inflation to go down by year end, interest rates about to peak, energy prices on their way down....

Does Joe Public really care about the global economic climate? And when has there not been a global economic climate of some sort looming to worry about?

Banks failing left right and center in the USA with "votes of confidence" being given worldwide, no end in sight to the war in Ukraine, large businesses dumping staff across multiple industries, corporation tax going up which will push a lot of business offshore etc.

Not convinced we've seen the worst of anything so far personally, there's still a whole heap of st that has yet to float downstream.

[Fusion777]

SWoll said:

Not convinced we've seen the worst of anything so far personally

Me neither. I'm not a pessimist, but we've been relatively lucky so far in that unemployment numbers have stayed healthy. It's premature thinking that this has all blown over, because it hasn't.

[Deep Thought]

Fusion777 said:

SWoll said:

Not convinced we've seen the worst of anything so far personally

Me neither. I'm not a pessimist, but we've been relatively lucky so far in that unemployment numbers have stayed healthy. It's premature thinking that this has all blown over, because it hasn't.

Well, we'll see. We were supposed to have had the winter of doom there and it pretty much didnt happen.

We can either sit around and worry and always find economic / global gloom on the horizon or we can get on with life, and find a balance.

I'm in the latter camp.

[confused_buyer]

ice729091 said:

Anyone paying current used prices is clearly getting fked, as soon as supply starts returning to normal we'll see more usual rates of depreciation returning, as Covid was just a blip.

All this talk of "new normal" is nonsense.

No one is says depreciation won't resume. What they are saying is there won't be a readjustment back to prices of 2020.

That does not mean zero depreciation, it just means they'll be starting to depreciate from a higher price in the first place dragged up by higher new prices.

If you can't cope with depreciation don't buy a car, or at least one over shed money. Depreciate at one level or another is what the vast majority of modern cars do.

[AlexNJ89]

Deep Thought said:

Do people really though?

The economic outlook appears much better than we were being told 6 months ago. Inflation to go down by year end, interest rates about to peak, energy prices on their way down....

Does Joe Public really care about the global economic climate? And when has there not been a global economic climate of some sort looming to worry about?

I mean the global economic climate will force prices down, not by people looking at the outlook and deciding to stop buying.

[RayDonovan]

Walked past a Ford dealer today who had a 5 door Fiesta, 2019 plate and a fairly basic looking spec and it was up for £16,995.

Years ago now (2015), we bought a 4 year old (so same as the Fiesta) Focus 1.6T Titanium X for under £9k from a Ford main dealer.

So a model down, easily down at least one spec grade and £8k more expensive.

[confused_buyer]

Deep Thought said:

There are two problems with that -

Firstly, there are some 2-3 million car transactions that simply didnt happen. That means there is a hole that size in the used car market, that will never be filled (in any meaningful timescale)

Secondly, new car prices have went up dramatically, due to large cost increases. Used car values are ultimately a percentage of new car price. New car prices up = used car prices up.

And we have already seen more usual rates of depreciation returning - just that they are from the peak that we have experienced, not from what they were.

This.

[Saweep]

I think the real inflation figure since before Covid is about 30%; that's what it feels like to me.

Therefore, taking the years of little production out too, the current prices seem about right.

I think they are largely here to stay.

[Fusion777]

Deep Thought said:

Well, we'll see. We were supposed to have had the winter of doom there and it pretty much didnt happen.

We can either sit around and worry and always find economic / global gloom on the horizon or we can get on with life, and find a balance.

I'm in the latter camp.

It’s not a case of being gloomy, it’s just being honest about world events. Credit Suisse posted a $7.9bn loss in 2022, have received a huge government bailout and are now on the brink of being taken over.

Credit Suisse is one of about 30 global banks deemed “too big to fail”. Why is such a stalwart organisation losing so much money if things are rosy?

It’s naive to think that none of this matters- these types of events can easily trigger a huge loss in confidence in the banking system and global economy that ultimately may affect the likes of you and I.

Of course you’ve got to do the best you can as an individual. But I think it’s useful to have an awareness of emerging events and the bigger picture.

[nickfrog]

Fusion777 said:

It’s not a case of being gloomy, it’s just being honest about world events. Credit Suisse posted a $7.9bn loss in 2022, have received a huge government bailout and are now on the brink of being taken over.

Credit Suisse is one of about 30 global banks deemed “too big to fail”. Why is such a stalwart organisation losing so much money if things are rosy?

It’s naive to think that none of this matters- these types of events can easily trigger a huge loss in confidence in the banking system and global economy that ultimately may affect the likes of you and I.

Of course you’ve got to do the best you can as an individual. But I think it’s useful to have an awareness of emerging events and the bigger picture.

CS' serious problems started years ago. I am surprised you didn't mention them earlier.

[Fckitdriveon]

Deep Thought said:

cheesejunkie said:

The car price crash relies on a myth that isn’t true. “Lots are driving cars they can’t afford”. It’s evidently bullst.

Exactly. I see our Schadenfreude friend ThrottleBody seems to have fallen silent of late for whatever reason, as are some of the sneerers who love to tell us how those PCPing cant afford it, when in reality, it seems they can. No weeping and wailing in the streets as cars were repossessed, no massive car price crash, no comeuppance.

The line of Pcp-ers can’t afford it , doesn’t really wash imho, unless someone’s financial situation changes mid point in their agreement .
the banks want proof of money not just a good credit score ….to satisfy themselves they are going to get paid back- affordability I think they call it.