Used car market is dead...?
Discussion
mike74 said:
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.
Which will drive up used prices as those who were otherwise "buying" new, will be out on the second hand market.Long, long overdue in my opinion.
And of course there will be much less new cars sold then, so good quality used cars will be even harder to get and in demand so more expensive.
Be careful what you wish for....
daemon said:
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.
Agreed - compared to proper Dealers offering real warranties.But they are probably less than 20% of the used car dealers - the other 80% offer nothing.
V8RX7 said:
daemon said:
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.
Agreed - compared to proper Dealers offering real warranties.But they are probably less than 20% of the used car dealers - the other 80% offer nothing.
daemon said:
Well thats wrong because they do - you're getting the ability to see maybe 100+ cars at one go rather than trawl around the country looking at "private" sales, you're getting an opportunity to dispose of your own car, you're getting the ability to drive in with your old car / drive out with a new one (so a one stop shop), finance facilities, clear their own finance if required, get a car with some sort of legal comeback as a minimum but often with a comprehensive (if not manufacturer spec) warranty, if the car has faults you can expect them to be rectified, you can have it serviced if required before pickup, it will (usually) be valeted, etc.
Completely agree. A 2013 Mercedes C63 AMG was £60k new. Numbers for a nice one should really now be:- Trade £24k
- Private Sale £25k
- Non Franchise Specialist £29k
- Franchise Dealer £32k
....but most private sellers are asking £30k plus. No thanks, I'll pay a couple of grand more to Merc dealer with a 2 year AMG warranty, PX facility etc.
Examples:
Private. http://www.autotrader.co.uk/classified/advert/2017...
Franchise. http://www.autotrader.co.uk/classified/advert/2017...
It is ridiculous
Edited by OddCat on Saturday 6th May 18:08
daemon said:
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.
A proportion of private sellers are a bit thick/chancers. They look at dealer prices and think mine is the same as that, too naive to consider the basics such as retail overheads never mind warranty. Unfortunately it is not just limited to cars but all items, makes it frustrating.OddCat said:
Completely agree. A 2013 Mercedes C63 AMG was £60k new. Numbers for a nice one should really now be:
- Trade £24k
- Private Sale £25k
- Non Franchise Specialist £29k
- Franchise Dealer £32k
....but most private sellers are asking £30k plus. No thanks, I'll pay a couple of grand more to Merc dealer with a 2 year AMG warranty, PX facility etc.
Examples:
Private. http://www.autotrader.co.uk/classified/advert/2017...
Franchise. http://www.autotrader.co.uk/classified/advert/2017...
It is ridiculous
Completely irrelevant comment coming but that white one is really nice.- Trade £24k
- Private Sale £25k
- Non Franchise Specialist £29k
- Franchise Dealer £32k
....but most private sellers are asking £30k plus. No thanks, I'll pay a couple of grand more to Merc dealer with a 2 year AMG warranty, PX facility etc.
Examples:
Private. http://www.autotrader.co.uk/classified/advert/2017...
Franchise. http://www.autotrader.co.uk/classified/advert/2017...
It is ridiculous
Edited by OddCat on Saturday 6th May 18:08
daemon said:
Well thats wrong because they do - you're getting the ability to see maybe 100+ cars at one go rather than trawl around the country looking at "private" sales, you're getting an opportunity to dispose of your own car, you're getting the ability to drive in with your old car / drive out with a new one (so a one stop shop), finance facilities, clear their own finance if required, get a car with some sort of legal comeback as a minimum but often with a comprehensive (if not manufacturer spec) warranty, if the car has faults you can expect them to be rectified, you can have it serviced if required before pickup, it will (usually) be valeted, etc.
No you're wrong - your example is from the 20%80% are the lot selling cars from home or a farm or a portacabin - the warranty - if one is offered, isn't worth the paper it's written on etc
A few of my own observations from selling a few cars (both my own and having worked with a few small independent dealers)
1. The cheap cheap car (few hundred to few thousand) market is nearly gone. Most people that have just passed their test now expect to be driving brand new Fiestas on finance, rather than ten-year-old bangers. This is a combination of insane insurance for young people (lot of dealers including it in the deal), constant one-up-manship and the ridiculous proliferation of finance.
2. Dealers seem to be making more money on finance than cars, and will often skew numbers. Very few people pay cash for a car, and the difference between finance on used and new might mean a car which is £30k used could be more expensive than a £40k new one.
3. We buy any car etc... have hooked in people by the thousands. Don't know or care why, although to a lot of people a car is as exciting as a dishwasher.
4. Regards private sellers asking high prices. Literally every single person I have ever had a phone call from has asked me "wts ur bst prce m8?" or something to that effect. No matter how good the price is, people have been taught to haggle.
I overheard a conversation recently about a very large American department store who had a new director. He lowered the prices on everything in store, but stopped doing DFS-style sales/discounts every month. Sales tanked because their customers had been brainwashed over years into never buying anything unless it was "on sale" - they wouldn't buy a $100 handbag, but they'd buy a $200 handbag if you told them it was 50% off this month.
That and car ownership is becoming more expensive and less enjoyable all the time. Nice cars are a luxury, not everyone can afford them.
I would like to add that I have been involved in a few car sales involving main dealers that would take your breath away. Vehicles that have been taken in,checked, approved and sold on with MAJOR modifications that are not obvious to the average joe, but the moment you put a car on a ramp are plain to see. In my mind the ONLY benefit of a main dealer is the warranty and of course, free drinks. The cars are no better or worse than selling private in my experience.
1. The cheap cheap car (few hundred to few thousand) market is nearly gone. Most people that have just passed their test now expect to be driving brand new Fiestas on finance, rather than ten-year-old bangers. This is a combination of insane insurance for young people (lot of dealers including it in the deal), constant one-up-manship and the ridiculous proliferation of finance.
2. Dealers seem to be making more money on finance than cars, and will often skew numbers. Very few people pay cash for a car, and the difference between finance on used and new might mean a car which is £30k used could be more expensive than a £40k new one.
3. We buy any car etc... have hooked in people by the thousands. Don't know or care why, although to a lot of people a car is as exciting as a dishwasher.
4. Regards private sellers asking high prices. Literally every single person I have ever had a phone call from has asked me "wts ur bst prce m8?" or something to that effect. No matter how good the price is, people have been taught to haggle.
I overheard a conversation recently about a very large American department store who had a new director. He lowered the prices on everything in store, but stopped doing DFS-style sales/discounts every month. Sales tanked because their customers had been brainwashed over years into never buying anything unless it was "on sale" - they wouldn't buy a $100 handbag, but they'd buy a $200 handbag if you told them it was 50% off this month.
That and car ownership is becoming more expensive and less enjoyable all the time. Nice cars are a luxury, not everyone can afford them.
I would like to add that I have been involved in a few car sales involving main dealers that would take your breath away. Vehicles that have been taken in,checked, approved and sold on with MAJOR modifications that are not obvious to the average joe, but the moment you put a car on a ramp are plain to see. In my mind the ONLY benefit of a main dealer is the warranty and of course, free drinks. The cars are no better or worse than selling private in my experience.
Edited by jayemm89 on Saturday 6th May 18:49
I've been saying a few times on various threads about 2nd hand performance car market that the market is likely to turn any moment as asking prices have become a bit too silly to the point that buyers no longer see any value for money in the vehicle.
A lot of buyers are now probably just waiting for sellers to realise that all these "investment" cars that have been scooped up over the past number of years are not the big profit making machine they want them to be.
Any asset is generally only worth the money that a buyer is willing to pay for it.
With the new millennials that make up most of the buyer market which have grown up to fail to appreciate cars and treat everything as a "rent it then ditch it" attitude, I think the 2nd hand performance car market could be in for a significant down turn.
The trigger is likely to be bank of england interest rate rises which will probably happen in the near future.
But this depends on how the economy reacts to brexit of course.
A lot of buyers are now probably just waiting for sellers to realise that all these "investment" cars that have been scooped up over the past number of years are not the big profit making machine they want them to be.
Any asset is generally only worth the money that a buyer is willing to pay for it.
With the new millennials that make up most of the buyer market which have grown up to fail to appreciate cars and treat everything as a "rent it then ditch it" attitude, I think the 2nd hand performance car market could be in for a significant down turn.
The trigger is likely to be bank of england interest rate rises which will probably happen in the near future.
But this depends on how the economy reacts to brexit of course.
daemon said:
Which will drive up used prices as those who were otherwise "buying" new, will be out on the second hand market.
And of course there will be much less new cars sold then, so good quality used cars will be even harder to get and in demand so more expensive.
Be careful what you wish for....
Can't agree at all with any of that... availability of cheap and easy credit is what drives prices up (both new and used) take away the credit and the buyers will dry up And of course there will be much less new cars sold then, so good quality used cars will be even harder to get and in demand so more expensive.
Be careful what you wish for....
jayemm89 said:
I overheard a conversation recently about a very large American department store who had a new director. He lowered the prices on everything in store, but stopped doing DFS-style sales/discounts every month. Sales tanked because their customers had been brainwashed over years into never buying anything unless it was "on sale" - they wouldn't buy a $100 handbag, but they'd buy a $200 handbag if you told them it was 50% off this month.
Then my inclination is that the director was crap or the products were crap.Look at Car Giant and other car supermarkets, they don't haggle. The sticker price + admin fee is what you pay and it is made very clear. People still flock to Car Giant by the thousands as the price is right in the first place.
Edited by hyphen on Saturday 6th May 19:33
V8RX7 said:
Not in the Autotrader at the cars I look at there isn't.
Indeed frequently the traders cars are cheaper.
Autotrader is part of the problem here, they offer "guide" prices to people when they list cars, some ignore it and some price above it. We advertised a 335d last night, it went live at 8pm, it sold this morning and left the building at 11am today. The right spec in good condition if priced well will sell.Indeed frequently the traders cars are cheaper.
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.
A year ago we PX'd a BMW X3 to a dealer after I could not move it at all privately for 4500. Dealer had it sold in less than a week for almost 6000 and the pictures were taken literally when we dropped it off to get out new car, they did nothing to it.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.
fivepointnine said:
A year ago we PX'd a BMW X3 to a dealer after I could not move it at all privately for 4500. Dealer had it sold in less than a week for almost 6000 and the pictures were taken literally when we dropped it off to get out new car, they did nothing to it.
Thus confirming, in this instance, the 25% differential (at least) between private and dealer retail prices. Despite it not working, at least you were being sensible with your pricing so it wasn't that which causd your failure to find a buyer.mike74 said:
daemon said:
Which will drive up used prices as those who were otherwise "buying" new, will be out on the second hand market.
And of course there will be much less new cars sold then, so good quality used cars will be even harder to get and in demand so more expensive.
Be careful what you wish for....
Can't agree at all with any of that... availability of cheap and easy credit is what drives prices up (both new and used) take away the credit and the buyers will dry up And of course there will be much less new cars sold then, so good quality used cars will be even harder to get and in demand so more expensive.
Be careful what you wish for....
Trust me on this - not happening. Ever.
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...!!!
Now try telling that to Mustang GT owners...!!!
Appreciate that, I really do.
There was a honeymoon period when a few were sold at the same as paid for 12 months earlier but that is over now, I believe.
Still my car cost me 34k and if you want to go and get one from the dealers now with my spec they are now 39k. Bit of a price rise in 14 months.
I was, stupidly perhaps, hopeful of +30k for mine. The dealer that offered me 30k money day one is buying off me for 29k now. My fault as I waited 6 weeks hoping for an interested private buyer.
Not bad in my opinion for 14 months and 12,000 miles of fun.
Be far better if I could justify keeping it for decades as was my original plan. Still have my e36 bought back in 1998.
daemon said:
So people will suddenly NOT be able to get credit AT ALL, rather than just on £35K cars on questionable PCP deals?
Trust me on this - not happening. Ever.
Where did I say that people will be able to get "NO CREDIT AT ALL"?Trust me on this - not happening. Ever.
I can't believe you're seriously trying to say there's no correlation at all between cheap and easy credit and inflated asset prices.
mike74 said:
daemon said:
So people will suddenly NOT be able to get credit AT ALL, rather than just on £35K cars on questionable PCP deals?
Trust me on this - not happening. Ever.
Where did I say that people will be able to get "NO CREDIT AT ALL"?Trust me on this - not happening. Ever.
I can't believe you're seriously trying to say there's no correlation at all between cheap and easy credit and inflated asset prices.
The "credit" wont be taken away- it will be that people will get less and it will be tighter controlled at most
SO, that will lead to people buying cheaper, used cars as they can no longer get their Audi A4s on £249 a month PCP deals.
And pretty much all the cheap and easy credit is on new cars - we're talking on this thread about the used car market, right?
The used car market - where finance is used - tends to be trade in plus straight HP finance for the remainder.
V8RX7 said:
daemon said:
Well thats wrong because they do - you're getting the ability to see maybe 100+ cars at one go rather than trawl around the country looking at "private" sales, you're getting an opportunity to dispose of your own car, you're getting the ability to drive in with your old car / drive out with a new one (so a one stop shop), finance facilities, clear their own finance if required, get a car with some sort of legal comeback as a minimum but often with a comprehensive (if not manufacturer spec) warranty, if the car has faults you can expect them to be rectified, you can have it serviced if required before pickup, it will (usually) be valeted, etc.
No you're wrong - your example is from the 20%80% are the lot selling cars from home or a farm or a portacabin - the warranty - if one is offered, isn't worth the paper it's written on etc
daemon said:
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.Either way, it's difficult for the private seller as they can't offer finance, which seems to be the preferred method of payment these days.
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