Used car market is dead...?

[daemon]

golfer19 said:

lord trumpton said:

I think most folk simply don't have a lot of hard cash to hand. As a result they go and lease a new one for a manageable monthly sum.

Given 90% of new cars are financed then this obviously has an effect on the number of private sellers coming to the market. Of the ones that do try to sell privately then they seem to want retail money as they needing a maximum return as they owe money on the car.

Agree.
It's not what price is the car but how much per month.

For a lot of people - but not everyone. There should be a viable enough buyer market for people who either have the availability of cash (often from another previously sold car) and maybe the difference made up of a bank loan or their own savings.

[Sa Calobra]

Crumpet said:

I had my old Discovery 3 for sale privately last summer at £10,500 and in two weeks didn't have a single enquiry. I traded it in at a (non-franchised) dealers who then put it up for £13,500. It had sold within a few days to someone living about a mile from me (see it frequently).

I guess people need to use dealer finance a lot of the time and being able to trade your old motor in is just so much easier. Can't say I'd bother trying to sell a run-of-the-mill car privately again.

Two things here, you can't offer finance to all comers. People can be very shy about buying a Disco privately. At least with a dealer there's some comeback when it goes pop within three months. Finally, people pass that dealer daily, he also has a contact list of current/previous customers.

[croyde]

I agree about trying to sell privately when selling at 20k, 30k or more.

My Mustang GT has been on sale for 7 weeks now with very little interest but then who can blame them. Mines on for just over £30k but then I wouldn't hand over that sort of cash to a private seller.

And the economic climate. I have a house in SW London for sale. Prior to Brexit it would have resulted in a bidding war but so far no interest despite a massive price reduction.

[red_slr]

Used prices are silly at the moment. Generally covering all makes / models. There are a few lead balloons out there but not many.

This is, IMHO, boosting the new market. Why spend £20k on a used Audi whatever when for a few grand more you can have brand new.

On top of that the dealers are throwing discounts, servicing and almost 100% guaranteed finance into the ring.

The kicker is most dealers are charging 6% and upwards for finance right now which is great for them given the base rates. But repayments seem low due to GFV of c.40-50% of the deal.

This is plus the GE and Brexit is pushing the used market down. I suspect if you got 10 average people off the street and had them ask their bank for a loan of £20k the majority would probably get turned down and the payments would be not far off twice the monthly amount (yet interest half etc!).

IYSWIM.

[Blown2CV]

the market is due to burst. Values are sky high for certain things. Low interest rates push people to invest in other things such as cars, but there is a ceiling.

[daemon]

Blown2CV said:

the market is due to burst. Values are sky high for certain things.

I'm genuinely not seeing that for common or garden cars - or even "premium" brand cars.

I would be fairly confident i could apply the old rule of 50% drop every three years to most cars on the market, and get a 3 year old variant for half the price of a new one and have ample choice.

I think part of the problem is that people think dealers should be giving used cars away when the reality is that clean retail quality stock is hard to come by and sought after by buyers.

[OddCat]

Yes. I think the norm is something like 25% depreciation in year one, then 40% by end of year two, and 50% by end of year three.

Now try telling that to Mustang GT owners...!!!

[Blown2CV]

daemon said:

Blown2CV said:

the market is due to burst. Values are sky high for certain things.

I'm genuinely not seeing that for common or garden cars - or even "premium" brand cars.

I would be fairly confident i could apply the old rule of 50% drop every three years to most cars on the market, and get a 3 year old variant for half the price of a new one and have ample choice.

I think part of the problem is that people think dealers should be giving used cars away when the reality is that clean retail quality stock is hard to come by and sought after by buyers.

I am not saying it's happening now, i am saying it is due. Values for investable things don't keep going up and up. Gold values are on the same trajectory, for the same reasons. Gold mining corp CEO on R4 two days ago saying same. Anyone whose business depends on this stuff and thinks Summer will never end is going to get wake-up call equivalent to a XL bucket of iced water.

[hyphen]

OddCat said:

Yes. I think the norm is something like 25% depreciation in year one, then 40% by end of year two, and 50% by end of year three.

Now try telling that to Mustang GT owners...!!!

Are the retail prices now inflated for leases though? "This car would be £80k to buy, lease for only £299 a month" type thing

[Blown2CV]

hyphen said:

OddCat said:

Yes. I think the norm is something like 25% depreciation in year one, then 40% by end of year two, and 50% by end of year three.

Now try telling that to Mustang GT owners...!!!

Are the retail prices now inflated for leases though? "This car would be £80k to buy, lease for only £299 a month" type thing

there are additional key factors at play with lease pricing.

[Crumpet]

daemon said:

Crumpet said:

I had my old Discovery 3 for sale privately last summer at £10,500 and in two weeks didn't have a single enquiry. I traded it in at a (non-franchised) dealers who then put it up for £13,500. It had sold within a few days to someone living about a mile from me (see it frequently).

I guess people need to use dealer finance a lot of the time and being able to trade your old motor in is just so much easier. Can't say I'd bother trying to sell a run-of-the-mill car privately again.

OR, dont want to run an older Disco without a fully comprehensive warranty from a dealer whos going to (have to) stand over it?

Lets not forget, at that price point people could easily get a bank loan. Companies online are falling over themselves to lend money at stupidly low rates.

I completely agree, but I was selling it with four months of transferable Land Rover approved warranty (about £1200 a year) which would have been ten times better than the crappy warranty the Vauxhall garage will have stuck on it. The car was a Friday afternoon special though, so I hope they did get a decent warranty with it.

[daemon]

OddCat said:

Yes. I think the norm is something like 25% depreciation in year one, then 40% by end of year two, and 50% by end of year three.

Now try telling that to Mustang GT owners...!!!

Yes, thats why i said most cars on the market. Theres a small minority it doesnt apply to.

Supply v demand and all that...

Edited by daemon on Saturday 6th May 16:28

[daemon]

hyphen said:

OddCat said:

Yes. I think the norm is something like 25% depreciation in year one, then 40% by end of year two, and 50% by end of year three.

Now try telling that to Mustang GT owners...!!!

Are the retail prices now inflated for leases though? "This car would be £80k to buy, lease for only £299 a month" type thing

No, with a Mustang GT, its a simple supply v demand. Long waiting list for new ones, no discount on new ones and not too many on the used market.

[OddCat]

daemon said:

hyphen said:

OddCat said:

Yes. I think the norm is something like 25% depreciation in year one, then 40% by end of year two, and 50% by end of year three.

Now try telling that to Mustang GT owners...!!!

Are the retail prices now inflated for leases though? "This car would be £80k to buy, lease for only £299 a month" type thing

No, with a Mustang GT, its a simple supply v demand. Long waiting list for new ones, no discount on new ones and not too many on the used market.

True, but the initial novelty is now over, everyone who wanted one new has now got one, pre April 2017 cars are £520 Car Tax (most post April 2017 car are £140), waiting list now just a few months, new model due next year. As someone pointed out in another thread it was the same with the Monaro.

But point taken generally.

[V8RX7]

daemon said:

Not 25% less than market value, 25% less than dealer value - theres a difference.

Not in the Autotrader at the cars I look at there isn't.

Indeed frequently the traders cars are cheaper.

[C70R]

CS Garth said:

C70R said:

trickywoo said:

CS Garth said:

New car sales down considerably as announced yesterday and new diesel sales down 24 percent I think. Even allowing for this being month on month against a strong March it is difficult to ignore the mood music which is that the uncertainty caused by Brexit is starting to get very real

What a load of rubbish! The stats you quote are compared with the same time last year when people were rusing through purchases ahead of tax changes.

If in doubt, assume Brexit. How tragic.

I see the head in the sand brigade are alive and well

I stubbed my toe this morning. Bloody brexit...

[OddCat]

V8RX7 said:

Indeed frequently the traders cars are cheaper.

Thes are 'asking' prices of course. Who knows whether private sellers are getting anything like that - if selling at all.

[daemon]

V8RX7 said:

daemon said:

Not 25% less than market value, 25% less than dealer value - theres a difference.

Not in the Autotrader at the cars I look at there isn't.

Indeed frequently the traders cars are cheaper.

Indeed. And thats my point - private sale cars should be cheaper. Significantly cheaper. Because a private seller cant offer a warranty, trade in, finance, etc.

[daemon]

OddCat said:

V8RX7 said:

Indeed frequently the traders cars are cheaper.

Thes are 'asking' prices of course. Who knows whether private sellers are getting anything like that - if selling at all.

And yet those same private sellers will grumble about not being able to sell their cars privately and wonder why.

[mike74]

After the biggest debt splurge in history I'm finally starting to see a few signs from TPTB that credit availability might finally start to be tightened... meaning a reigning in of loose monetary policy, cheap and easily available debt and the endless inflating of asset price bubbles.

Long, long overdue in my opinion.