Will Coronavirus hit used car prices?

[gizlaroc]

CRA1G said:

But "all" private seller's havn't pulled off advertising...

No, but the vast majority have.

There are often 100-150k on there, currently 30k.

So will skew the average price marker somewhat I would think, but not sure hence the ???? at the end.

[gizlaroc]

Justin Case said:

Is the cash v finance comparison a fair one to make. Finance can make a lot of sense on a new car that you change every two or three years, but not so much on a used one where interest rates tend to be higher. If there is a shortage of new cars as and when factories get into production will dealers start to cut their interest rates on used cars to try and make up the shortfall. My view - prices are unlikely to change much either way, as with new cars dealers will offer more incentives. Shoot it down if you wish

The mistake many make is using car dealer finance on used cars.

£25000
60 x £456
final payment £8000 at 11.9% apr

£25000
60 x £454
Owned outright at 3.5% apr.


Yet the PCP is sold on "But we guarantee your car will be worth £8000 at the end."
"No you don't! You guarantee I will have to pay you an extra £8000 at the end or walk away with nothing."

[anonymous-user]

Antj said:

Biggest losers will be people like JLR, finance payments to them are regularly 600-800 a month...

Wait, you think that people financing cars are paying the manufacturer directly?

[CRA1G]

gizlaroc said:

CRA1G said:

But "all" private seller's havn't pulled off advertising...

No, but the vast majority have.

There are often 100-150k on there, currently 30k.

So will skew the average price marker somewhat I would think, but not sure hence the ???? at the end.

WOW... so from 100-150k E46 M3's there's only currently 30K now for sale... selling quicker than Bog Rolls... better be quick then...

[gizlaroc]

CRA1G said:

WOW... so from 100-150k E46 M3's there's only currently 30K now for sale... selling quicker than Bog Rolls... better be quick then...

You know what I am saying.

Usually around 100-150k private cars being advertised privately on there.
Currently 32k.

No idea how many M3s are normally sold privately? Currenty showing 78 across all models.

I was asking if the below/above average price is skewed if there is a considerable drop in private sales, or do they not take them into account?

[V8RX7]

ChevronB19 said:

I always thought the phrase was something along the lines of ‘one pay cheque away from anarchy’ (or something like that) .

Which is why I was surprised that people were stocking up on loo roll rather than bullets

(friend is a large ammo supplier, reported there was less demand)

[visitinglondon]

Numpty with honours said:

fridaypassion said:

Good old PH

Always divides up into the following:

Know it all types that look down their noses at the peasants who have to use something so common as finance to buy a car - 99% of the time these are just people that inherited wealth and would be stacking shelves if daddy or granddady didn't bankroll them.

People that like to buy things using finance within their means (most normal people)

People that would like to buy a nice car but have to wait for their personal situation to improve before pressing the button

People that could afford to buy a nice car but run round in a stter perhaps not realising that one day you are dead and although its nice to own everything and now owe the bank anything we all ultimately rent everything in this life

Short answer - Let's just wait and see and stop being horrible to eachother.

I prefer to contract hire /pcp cars as I can invest at a higher rate than the APR on these deals .

Of course you can, sunshine. How’s your mythical portfolio looking at the moment? Probably the same as before as you’re just another dreamer with no pension and no savings because you hire/PCP cars to impress your mates rather than putting some aside for a rainy day.

Guess what - this is the rainy day you should have provided for!!!

[visitinglondon]

fridaypassion said:

Good old PH

Always divides up into the following:

Know it all types that look down their noses at the peasants who have to use something so common as finance to buy a car - 99% of the time these are just people that inherited wealth and would be stacking shelves if daddy or granddady didn't bankroll them.

People that like to buy things using finance within their means (most normal people)

People that would like to buy a nice car but have to wait for their personal situation to improve before pressing the button

People that could afford to buy a nice car but run round in a stter perhaps not realising that one day you are dead and although its nice to own everything and now owe the bank anything we all ultimately rent everything in this life

Short answer - Let's just wait and see and stop being horrible to eachother.

You forgot those who take out ruinous finance deals to impress their friends and neighbours, don’t actually have a pot to piss in and will be royally fked by this downturn.

Hopefully it will teach them some financial discipline going forward.

[av185]

Custarding portfolio required.

[gizlaroc]

Put the sherry down, there's a good girl.

[Pica-Pica]

Plate spinner said:

I’m looking forward to hoovering up the odd bargain in the aftermath.

In the aftermath, when trading resumes, the world and his wife will be doing the same. Result....
Guess.
I think any bargains will be immovable assets, houses and land.

[Wills2]

mstrbkr said:

Wait, you think that people financing cars are paying the manufacturer directly?

Who do you think owns BMWFS or VWFS etc....? They borrow the money and then use that money to sell a car through the retailer, so yes in many cases (if not most when buying a new car using dealer finance) you're paying the manufacturer via their FS arm, they pay the retailer out on the sale and take the debt on.

There is enough PCP debt out there to bankrupt the big three German brands if is goes wrong, Merkel would have to bail them out.

Edited by Wills2 on Tuesday 31st March 23:55

[anonymous-user]

Wills2 said:

There is enough PCP debt out there to bankrupt the big three German brands if is goes wrong, Merkel would have to bail them out.

With what? German banks are buggered and were before this hit and they don't own a printing press anymore.

[Julian Thompson]

It’ll be fine they can just ask Italy and Spain to clear their target 2 balances as they close the EU door behind them. Oh wait no they can’t!!

[Numpty with honours]

av185 said:

This is the line so often trotted out by pcpers to cover their backs.

Great news if you can but imo many do not beat the overall rate at all as previously discussed and many just fritter the saved capital away.

Out of interest what exactly did you invest in showing what rate of return?

Cheers.

Commercial ground rents (indexed linked) yield around 4.5% plus RPI circa 7%

[Numpty with honours]

av185 said:

This is the line so often trotted out by pcpers to cover their backs.

Great news if you can but imo many do not beat the overall rate at all as previously discussed and many just fritter the saved capital away.

Out of interest what exactly did you invest in showing what rate of return?

Cheers.

I would also add that when I was young I would rather borrow the money and the money I could have used to buy the car make an investment in an income producing asset

The loan payments in a way inconvenienced me as while the interest rate on the borrowings was more or less the same as what I would invest in , I of course had to make capital payments. The loan made me save and cut out that expenditure on fluff which builds up as your income rises

This of course is the principal of Rich Dad Poor Dad by Robert Kiyosak. I have reservations about the book on a number of issues but it implies that the poor dad is not a good farther, he may be poor but may be rich in other areas of life which may help launch his child better into the adult world.

[fridaypassion]

Robert Kiyosak who made his money as an author not in property

I read that book and although the concept is logical it doesn't really explain where to stump up lots of cash from thin air to get going. It's a work of fiction and Robert Kiyosak it's a snake oil salesman in the great American tradition. That's not a criticism in itself but selling false hope to people is not readily an honesty industry. Look up Samuel Leeds for a uk example.

[anonymous-user]

As with all these bargains I take it all those in expensive houses will have to downsize and my little two bedroom semi worth about £200k will become in demand?
Every cloud and all that.

[Driver101]

gizlaroc said:

CRA1G said:

But "all" private seller's havn't pulled off advertising...

No, but the vast majority have.

There are often 100-150k on there, currently 30k.

So will skew the average price marker somewhat I would think, but not sure hence the ???? at the end.

I can't remember filtering off how many private sales in total, but more often than not the amount of cars I search for there is very few available privately.

[LooneyTunes]

So said:

Aaa. said:

av185 said:

Aaa. said:

One of my mates is a new money multimillionaire, I don't know exact figure (he probably doesnt really either) but circa £15m-20m?? He sold the company he worked for for £600m.

His one and only car is a BMW 430i coupe (not even an M4) and I would imagine the average PHer would lump him in with with the 'PCP cant afford it' crowd clearly living well beyond his means.

Did he pcp it?

No, but I did find out that he financed it rather than outright purchase, which did surprise me.

Why?

If you're getting finance for nearly free, or actually free, why would you tie up capital?

If you’ve got that sort of cash then tying up £40k(?) is unlikely to be a concern. More likely he just doesn’t want the hassle of getting rid of a 2/3 year daily and the couple of grand in interest is immaterial.