Used cars not selling?
Discussion
Yodafone said:
Used prices do seem to be higher than this time last year on some cars, Suzuki Swift Sport and Lexus ISF are 2 which seems to have gone up can't say what it is for other cars but these 2 definitely have.
If I have noticed, other people probably have seen that prices were cheaper before as well, so are not willing to buy.
As I know I am in that situation as I have been looking a Lexus ISF for a year and I know they have gone up but they are not selling as most are sitting around for a long time and get past from dealer to dealer.
There are also some which seem like good value like the Merc A45 and BMW M135i hatch, but then you get the old 135i coupes which seem to have gone up.
And to be honest allot of people want new and flash with low cost these days and are a bit snobbery about old cars.
But you cannot blame them for that as older cars do have fault's.
I'm currently in the market for a 2010-2012 135i Coupe with DCT and noticed this... Strange. I may as well go for the more powerful, newer M135i hatchIf I have noticed, other people probably have seen that prices were cheaper before as well, so are not willing to buy.
As I know I am in that situation as I have been looking a Lexus ISF for a year and I know they have gone up but they are not selling as most are sitting around for a long time and get past from dealer to dealer.
There are also some which seem like good value like the Merc A45 and BMW M135i hatch, but then you get the old 135i coupes which seem to have gone up.
And to be honest allot of people want new and flash with low cost these days and are a bit snobbery about old cars.
But you cannot blame them for that as older cars do have fault's.
Deep Thought said:
I wouldn't like to be running an A45 outside warranty. Theres a lot to go wrong.
I think you can say that about pretty much every car today, hideously complex and many jobs that only for main dealers.All fits in nicely with the PCP sales model , will run nicely for the warranty period then the dealer's can make loads of money fixing them later.
Deep Thought said:
Wooda80 said:
gizlaroc said:
I would argue that main dealers are now not retailers, they are finance houses.
The finance is the product, the cars are now just a tool to sell the product, finance.
This is why when it all goes tits up, again, they will all be in shock, again.
If we can explode the myth that everyone who finances a car must have less "cash in the bank" than everyone who spent some of their "cash in the bank" on an new car then:The finance is the product, the cars are now just a tool to sell the product, finance.
This is why when it all goes tits up, again, they will all be in shock, again.
In a world where everyone pays cash for cars, when there is a recession some people stop buying new(er) cars because it's a large discretionary purchase that they don't have to make and the production lines grind to a halt. This in itself causes a deeper recession in the car manufacturing sector --> job losses, reduced hours --> less consumer demand
In a world where everyone pays for cars monthly then in a recession people will still renew (because it's a regular household expense just like broadband, gas, electric, pay tv, gym membership etc.) perhaps into a car with a lower monthly payment if they wish to cut back. At least then the production lines keep turning.
This notion that in the next recession we'll see everyone who pcpd cars walking along the road barefoot and in tears with no car whilst the guy down the road who drive a 10 year old Mondeo swans smugly past frankly is banal.
People adjust.
My point was the lenders tend to be the last ones to realise things are slowing down, and almost certainly too late to adjust manufacturing patterns to suit.
Like in 2009, it all suddenly ground to a halt, it took them 12-18 months of making the cars more attractive and affordable via finance packages (low deposit and high residuals) to get the car market going again.
At the moment the car industry is going the other way, prices getting higher, residuals getting lower, which shows they think the market is buoyant, and thus may get a bit of a shock if things take a bit of a downturn.
Try and find the £179 deals for a Golf R or M140i today, or that £399 S Class or 7 Series, those deals just are not out there like they were in 2010,11 and 12. They were buying business.
The one thing they have in their favour though is they won't get hit with massive debts for overvalued residuals like last time, they have covered themselves there with low GFVs and super high interest rates. New cars at around 5% over base and used cars at 12% over base. That is a pretty damned good rate of return that will be building the coffers up nicely.
And that is the problem, when you see your profits climb at such a rate you just presume everything is rosy, it is not until it hits your business or everyone around you in the same industry says it has turned, that you can comprehend it is anything but great.
As I said, it is usually the lenders who are the most shocked when it suddenly all goes bang again.
gizlaroc said:
At the moment the car industry is going the other way, prices getting higher, residuals getting lower, which shows they think the market is buoyant, and thus may get a bit of a shock if things take a bit of a downturn.
Try and find the £179 deals for a Golf R or M140i today, or that £399 S Class or 7 Series, those deals just are not out there like they were in 2010,11 and 12. They were buying business.
I think they've got other things on their mind. Many cars are basically unavailable at the moment.Try and find the £179 deals for a Golf R or M140i today, or that £399 S Class or 7 Series, those deals just are not out there like they were in 2010,11 and 12. They were buying business.
I'm amazed (and somewhat disappointed
) we haven't seen blow-out offers as the WLTP deadline approached. The boss of Ford UK said a few weeks ago he expected pre-registrations this month to be several hundred thousand. The Sept new-reg figures will be interesting.Easternlight said:
Deep Thought said:
I wouldn't like to be running an A45 outside warranty. Theres a lot to go wrong.
I think you can say that about pretty much every car today, hideously complex and many jobs that only for main dealers.All fits in nicely with the PCP sales model , will run nicely for the warranty period then the dealer's can make loads of money fixing them later.
If we keep ours beyond its third birthday i think we will be investing in an extended Mercedes warranty.
I don’t want to get into the lease v. cash argument.... but a lot of buyers don’t care about silly sticker prices on new ones-someone rightly cited Fiestas- because this is masked by the smoke and mirrors of PCP with all sorts of potential add-ons like gap insurance, alloy wheel cover, posh polishing regimes etc, etc. The poorer used buyer of 3 year old cars will be much more canny and cynical and cost conscious. lncidentally, the current PCP situation will continue until interest rates rise.
gizlaroc said:
That was not my point.
My point was the lenders tend to be the last ones to realise things are slowing down, and almost certainly too late to adjust manufacturing patterns to suit.
Like in 2009, it all suddenly ground to a halt, it took them 12-18 months of making the cars more attractive and affordable via finance packages (low deposit and high residuals) to get the car market going again.
At the moment the car industry is going the other way, prices getting higher, residuals getting lower, which shows they think the market is buoyant, and thus may get a bit of a shock if things take a bit of a downturn.
Try and find the £179 deals for a Golf R or M140i today, or that £399 S Class or 7 Series, those deals just are not out there like they were in 2010,11 and 12. They were buying business.
The one thing they have in their favour though is they won't get hit with massive debts for overvalued residuals like last time, they have covered themselves there with low GFVs and super high interest rates. New cars at around 5% over base and used cars at 12% over base. That is a pretty damned good rate of return that will be building the coffers up nicely.
And that is the problem, when you see your profits climb at such a rate you just presume everything is rosy, it is not until it hits your business or everyone around you in the same industry says it has turned, that you can comprehend it is anything but great.
As I said, it is usually the lenders who are the most shocked when it suddenly all goes bang again.
I think they have realised that a change is happening and will get worse and i think they are building a war chest for if there is another market crash they dont end up with a load of cars back like the last time worth £,£££s less than the GFV.My point was the lenders tend to be the last ones to realise things are slowing down, and almost certainly too late to adjust manufacturing patterns to suit.
Like in 2009, it all suddenly ground to a halt, it took them 12-18 months of making the cars more attractive and affordable via finance packages (low deposit and high residuals) to get the car market going again.
At the moment the car industry is going the other way, prices getting higher, residuals getting lower, which shows they think the market is buoyant, and thus may get a bit of a shock if things take a bit of a downturn.
Try and find the £179 deals for a Golf R or M140i today, or that £399 S Class or 7 Series, those deals just are not out there like they were in 2010,11 and 12. They were buying business.
The one thing they have in their favour though is they won't get hit with massive debts for overvalued residuals like last time, they have covered themselves there with low GFVs and super high interest rates. New cars at around 5% over base and used cars at 12% over base. That is a pretty damned good rate of return that will be building the coffers up nicely.
And that is the problem, when you see your profits climb at such a rate you just presume everything is rosy, it is not until it hits your business or everyone around you in the same industry says it has turned, that you can comprehend it is anything but great.
As I said, it is usually the lenders who are the most shocked when it suddenly all goes bang again.
I wish I could find a used car! We want an i3s and there aren't any, literally none at all for sale used. I can't afford to buy one new, can't really afford to finance, so PCP or lease is my only option. Bit of a bummer, but we want the latest car, and even worse if the 120Ah comes out next year as well.
captain_cynic said:
Actually it harkens back to the day when cash was your only option for immediate payment.
There are still places in the world where this happens. Try buying a used car in Perth, Western Australia. You've got two options, a bank cheque (A.K.A. bankers draft) or cash. For smaller amounts the bank cheque is a pain in the arse as it requires you to go to the bank to get it and the seller to go to the bank to cash it (bank cheques in Oz are pretty hard to forge and very quick to verify as well as cashing instantly), for larger amounts its bank cheque as you cant just withdraw $10,000 over the counter these days.
With the faster payments system in the UK, cheques are redundant and cash is no longer your only option for instant payment.
I didn't know Perth was that different to Sydney & Melbourne. Even way back when I lived in Oz in 2005 I sold my lotus Elise privately for the then princely sum of $79K. I got paid via CBA Netbank same day.There are still places in the world where this happens. Try buying a used car in Perth, Western Australia. You've got two options, a bank cheque (A.K.A. bankers draft) or cash. For smaller amounts the bank cheque is a pain in the arse as it requires you to go to the bank to get it and the seller to go to the bank to cash it (bank cheques in Oz are pretty hard to forge and very quick to verify as well as cashing instantly), for larger amounts its bank cheque as you cant just withdraw $10,000 over the counter these days.
With the faster payments system in the UK, cheques are redundant and cash is no longer your only option for instant payment.
Deep Thought said:
If they were all priced at 20% too high Glass's Guide / Glass.net and CAP would have picked up on it. Glass's use sold for prices from dealers themselves and CAP uses auction prices at trade auctions.
Is the Glass's "retail transacted" price considered accurate?It shows £4710 for daughters 11reg Golf Twist, which has just been written off. Cheapest on Autotrader is listed at £4995 but the photo has £5995 in the screen. Most are well into £5K and some over £6K.
Sheepshanks said:
Deep Thought said:
If they were all priced at 20% too high Glass's Guide / Glass.net and CAP would have picked up on it. Glass's use sold for prices from dealers themselves and CAP uses auction prices at trade auctions.
Is the Glass's "retail transacted" price considered accurate?It shows £4710 for daughters 11reg Golf Twist, which has just been written off. Cheapest on Autotrader is listed at £4995 but the photo has £5995 in the screen. Most are well into £5K and some over £6K.
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