Will there ever be too many (normal) used cars?
Discussion
veevee said:
It's always confused me why people would even want to buy, say a boggo Focus 1.6, brand new. Fail to see the point
Why not (aside from horrendous depreciation) ? You get a warranty, so most issues are sorted by your local garage for "free". Usually there is a low rate finance, or a guaranteed residual on a PCP.
There's no worrying about passing an MOT. Some cars have the "just add fuel" deal, so that you can fix your outgoings for the next 3 years.
Piece of mind, and a new smelling car vs depreciation ?
C.A.R. said:
However now that I am starting to gather more commitments in life - starting a small family, having to afford rent - I'm now looking for a diesel hatchback. The market is absolutely heaving with cars in my budget so finding something remotely interesting or different from the normal, grey specification is actually pretty tough.
That's kind of what I mean. Roll back a few years and you'd still have a variety of cars from mainstream manufacturers but they would have (for example) a 1.3L, a nicer 1.6 GL a sporty 2.0 SRI and perhaps a lovely 2.8 Ghia X in a variety of colours and trim.
2015 will see forecourts amass with grey diesel saloons and hatches and not a lot else (perhaps).
JREwing said:
I think the ship has sailed on this one. Depreciation is already savage on cars like this as the market has been flooded for years, largely to do with the UK company car culture. If a car is a stupid colour or has steel wheels, has the wrong engine etc then God help you get it's theoretical value on resale.
Which is fantastic if you want to buy a petrol engined, brightly coloured, second-hand car... except it's not because everyone is so obsessed with the resale values of grey and silver that it's almost impossible to find anything that isn't. Hunting for a car for the wife we would happily have paid a small premium to get an interesting colour, but there just wasn't anything on the market. Bit OT but I went out for a drive yesterday morning and was sort of thinking along the same lines. 99.9% of cars on the road these days are boring diesel/petrol euroboxes. In fact it's got to the point where seeing something interesting is a rare occurence! I'm sure there used to be a larger % of interesting stuff on the roads 5/10 years ago? 
being a typical ph'er i have been looking for my next car . now to put this in context , i am ill ,not working and have no available cash to buy anything other than day to day basics . so what economical cars have i been looking at ?
rr full fat , v8 obviously
bmw x5 ,4.4
porsche cayenne 4.5
all for around £10k , that i do not have
but i would rather one of those than a ford focus. when i get better and back to work , maybe a little sub £1k snotter to get me to work.
rr full fat , v8 obviously
bmw x5 ,4.4
porsche cayenne 4.5
all for around £10k , that i do not have
but i would rather one of those than a ford focus. when i get better and back to work , maybe a little sub £1k snotter to get me to work.jas xjr said:
i woud say the used car market is already flooded . but when am i comparing it to ? when i bought my first car in 1981 my budget was a healthy £1500 . trust me when i tell you that there really were not many decent cars available.
Indeed. I bought my second car in about 1995 with a budget of £1350 and it was a struggle to get anything half decent.Mind you, the internet has really opened up the used car market. before you had to go on the local paper and Autotrader magazine. These days you can scour the entire country with ease.
kambites said:
We almost certainly already scrap cars younger on average than anywhere else for this very reason.
Absolutely we do - in the UK we scrap cars for faults that any other country wouldn't hesitate in simply fixing because the depreciation is so savage that perfectly decent cars are literally worthless and most people don't see the value in fixing something completely worthless.Its a crying shame.
Garlick said:
That's kind of what I mean.
Roll back a few years and you'd still have a variety of cars from mainstream manufacturers but they would have (for example) a 1.3L, a nicer 1.6 GL a sporty 2.0 SRI and perhaps a lovely 2.8 Ghia X in a variety of colours and trim.
2015 will see forecourts amass with grey diesel saloons and hatches and not a lot else (perhaps).
This is very true. I hate silver/grey, it's the car equivalent of magnolia walls in your house.Roll back a few years and you'd still have a variety of cars from mainstream manufacturers but they would have (for example) a 1.3L, a nicer 1.6 GL a sporty 2.0 SRI and perhaps a lovely 2.8 Ghia X in a variety of colours and trim.
2015 will see forecourts amass with grey diesel saloons and hatches and not a lot else (perhaps).
These days most cars seem to be grey/silver and 90% of them are diesels.
Just look for a used F10 5 series now and see how many of them are the 520d.
It's depressing.
Codswallop said:
Given how complex the current crop of 4 year old cars are, I think mundane stuff will become more throw-away than ever before, hence we will see far more cars being scrapped. Why would someone spend £1500 on new electronic boxes when they can pick up another cheap used car instead?
I think that should deal with the used oversupply nicely, much to the manufacturer's glee.
I have similar thoughts - DPF, DMF & injector failures on the typical diesel Passat, Mondeo will lead to a shorter lifespan on the road, even though the bodywork and major mechanicals will be solid. A big repair bill for the unsuspecting punter wil likely lead to early scrapping and buying another vehicle, as they are so readily available. The anticipated new MOT rules will also knock a higher proportion of vehicles into an early grave.I think that should deal with the used oversupply nicely, much to the manufacturer's glee.
kambites said:
Which is fantastic if you want to buy a petrol engined, brightly coloured, second-hand car... except it's not because everyone is so obsessed with the resale values of grey and silver that it's almost impossible to find anything that isn't. Hunting for a car for the wife we would happily have paid a small premium to get an interesting colour, but there just wasn't anything on the market.
That's my point too. However, boring colour diesels in nice spec still do depreciate rapidly, just not like puke-coloured petrolsD1bram said:
Looked at new cars recently as I need a new company car soon. A mid spec diesel Astra with the tax efficient derv engine is around £23k new now.
A three year old version of this (albeit a different shape model) can be had for under £5k.
I take your point but I don't think it's quite as bad as that. £23k is the new list price which no one ever pays for a Vauxhall. £5k will only get you a high milage example from an independant dealer. On a main dealer forcourt you're still lookin9 at 7k-8k for a 4 year old car. I know because my dad's going to after an Astra for that sort of money.A three year old version of this (albeit a different shape model) can be had for under £5k.
Still 'off a cliff' depreciation though
I think as these glut of small 2/3 yr old cars that were bought through the scrappage scheme get to the usual "trade in" time, their buyers will be faced with the fact they'll lose £x,xxx in depreciation if they PX, add the fact that modern cars are reliable and I suspect a lot of people who bought new, will be keeping their car a lot longer than 3 years.
Middle range cars I think are typically leased or bought with these PCPs with guaranteed future value in 2/3 years time. If the actual value is half what they guaranteed, people will be handing them back in droves. Big losses for the credit / contract companies and a lot of middle of the range cars coming onto the market.
High end cars, well there's already a very small market for new sales, slightly bigger for 3 year old ones so the depreciation will be huge. Good news for us PHs, but we'll end up fighting over the nice examples.
Which is how it is now, really. Small cars = hold value well, middle cars = loads of cheap ones, high end cars = very few (new ish ones), hard to sell.
I bet these PCP deals will drastically reduce their guaranteed future value very soon, unless it's a manufacturer backed scheme and they're factoring the losses into the new car price?
Middle range cars I think are typically leased or bought with these PCPs with guaranteed future value in 2/3 years time. If the actual value is half what they guaranteed, people will be handing them back in droves. Big losses for the credit / contract companies and a lot of middle of the range cars coming onto the market.
High end cars, well there's already a very small market for new sales, slightly bigger for 3 year old ones so the depreciation will be huge. Good news for us PHs, but we'll end up fighting over the nice examples.
Which is how it is now, really. Small cars = hold value well, middle cars = loads of cheap ones, high end cars = very few (new ish ones), hard to sell.
I bet these PCP deals will drastically reduce their guaranteed future value very soon, unless it's a manufacturer backed scheme and they're factoring the losses into the new car price?
fwaggie said:
Middle range cars I think are typically leased or bought with these PCPs with guaranteed future value in 2/3 years time. If the actual value is half what they guaranteed, people will be handing them back in droves. Big losses for the credit / contract companies and a lot of middle of the range cars coming onto the market.
That is a very good point.kambites said:
The markets sort it out - the more used cars there are for sale, the more they fall in value and the less attractive it becomes to buy new. We already have some of the highest rates of depreciation in the world because we have more of an obsession with buying new than anywhere else.
Personally, I hope it continues. Depreciation is great.
Or people keep their car longer. We bought a new Octavia in 2005 with the intention of keeping it 6 years. With the increase in complexity along with inflated purchase costs that have risen about 1000% more than my salary, we have decided to keep the car until it is scrapped.Personally, I hope it continues. Depreciation is great.
I've made the same decision with my S2000 as well. I bought it in 2008 when it was 3 years old and will just run it until it dies.
Garlick said:
Well, quite. But can the market sustain the sheer amount of similar stock now out there. Supply with surely outstrip demand (and those that can afford to buy a nearly new used car these days)
If market dictates, even I could be tempted with a very cheap, nearly new Golf diesel when the bottom falls out of the market
If prices were to really plunge then at some price point it would become economical to ship the cars overseas to developing markets.If market dictates, even I could be tempted with a very cheap, nearly new Golf diesel when the bottom falls out of the market
Lucas Ayde said:
If prices were to really plunge then at some price point it would become economical to ship the cars overseas to developing markets.
It'll rarely be economical because most countries have import duties which will completely offset any potential value in the vehicle.Most will just end up being scrapped / recycled prematurely.
Not very green is it?
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