Will Coronavirus hit used car prices?

Will Coronavirus hit used car prices?

Author
Discussion

gizlaroc

14,874 posts

179 months

Tuesday 31st March
quotequote all
Put the sherry down, there's a good girl.

Pica-Pica

7,081 posts

39 months

Tuesday 31st March
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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

17,077 posts

130 months

Tuesday 31st March
quotequote all
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

jsf

17,040 posts

191 months

Wednesday 1st April
quotequote all
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

1,497 posts

193 months

Wednesday 1st April
quotequote all
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

39 posts

38 months

Wednesday 1st April
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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

39 posts

38 months

Wednesday 1st April
quotequote all
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

4,939 posts

183 months

Wednesday 1st April
quotequote all
Robert Kiyosak who made his money as an author not in property wink

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.

Raygun

3,403 posts

75 months

Wednesday 1st April
quotequote all
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

7,592 posts

76 months

Wednesday 1st April
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gizlaroc said:
CRA1G said:
But "all" private seller's havn't pulled off advertising...confused
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

4,027 posts

113 months

Wednesday 1st April
quotequote all
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.

johnnyBv8

1,976 posts

146 months

Wednesday 1st April
quotequote all
Raygun said:
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.
That doesn't particularly follow. "Expensive house" is very subjective - there may be people that consider yours to be expensive, and people in houses you perceive to be expensive may be well within their means; housing market decline usually affects all levels to an extent. The main threat would come right at the very top end in London, if foreign buyers / money launderers stop investing in the UK.

Edited by johnnyBv8 on Wednesday 1st April 07:39

Dwh8611

68 posts

7 months

Wednesday 1st April
quotequote all
LooneyTunes said:
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.
It doesn’t matter how rich you are if you have got there through doing good business then you will always look for the best deal. It’s lottery winners that fritter the money away like that and then wonder where it all went.

So

18,267 posts

177 months

Wednesday 1st April
quotequote all
LooneyTunes said:
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.
We bought a new Mini runaround on PCP recently. 2.9% APR.

We could have bought twenty or thirty of them in cash.

If we borrow money for our business it currently costs us somewhere around 6.5%.

We thought we were doing the right thing.

LooneyTunes

4,027 posts

113 months

Wednesday 1st April
quotequote all
Dwh8611 said:
LooneyTunes said:
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.
It doesn’t matter how rich you are if you have got there through doing good business then you will always look for the best deal. It’s lottery winners that fritter the money away like that and then wonder where it all went.
You think the best deal is always the cheapest? Convenience is part of the equation too.

R.Sole

11,039 posts

161 months

Wednesday 1st April
quotequote all
So said:
We bought a new Mini runaround on PCP recently. 2.9% APR.

We could have bought twenty or thirty of them in cash.

If we borrow money for our business it currently costs us somewhere around 6.5%.

We thought we were doing the right thing.
I would imagine that most people PCP’ing a £40k car have 20/30 times that sitting in the bank.

suffolk009

4,085 posts

120 months

Wednesday 1st April
quotequote all
classicaholic said:
Bowlers said:
gt69 said:
The CCA auction over the last couple of days was curious. Quite a lot was selling at pretty much what one would have expected pre-CV -though there were the odd 'bargains' - carb Ferrari 308 GTS at £33k (75k miles) is the lowest I've seen since before they went through the roof at a Silverstone 2014 auction - that was a £55-60k car a couple of years ago, given the high miles, and a £45-50k car a couple of months ago
https://www.classiccarauctions.co.uk/cca-march-202...
This chap bid and won the auction for the 308 GTS.

https://youtu.be/rCTOn7b_NI0
Nice Vid, reminds me of when I buy at auction, it can get exciting at the end!
He's worth a follow. I find his vids interesting. They're more Harry Metcalfe than Shmee, if you see what I mean.

woodsy99

22 posts

97 months

Wednesday 1st April
quotequote all
My view would be that given that there would be serious knock on effect caused by people’s income being reduced or worse still losing their jobs leading to inability to pay off CC debts etc.
So probably modern tin tops would see a sudden and substantial drop and dealers sitting on large stocks may even be forced into liquidation.
I don’t think classics or modern classics would escape either and with less buyers and again dealers sitting on stocks would be forced to sell off cars or again may go out of business.
I’m currently looking to buy a modern classic , but reluctant to go ahead until I see how things pans out...........but expect to be paying less in say months than I would be paying now
Perhaps a good test is to keep any eye on eBay auction prices and see how they vary from reserves as this will indicate exactly what people are willing to pay

Dwh8611

68 posts

7 months

Wednesday 1st April
quotequote all
LooneyTunes said:
Dwh8611 said:
LooneyTunes said:
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.
It doesn’t matter how rich you are if you have got there through doing good business then you will always look for the best deal. It’s lottery winners that fritter the money away like that and then wonder where it all went.
You think the best deal is always the cheapest? Convenience is part of the equation too.
Yes agree with convenience as often my time is more valuable to me but I always start with the cheapest cost deal available and then adjust for convenience.

Raygun

3,403 posts

75 months

Wednesday 1st April
quotequote all
johnnyBv8 said:
Raygun said:
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.
That doesn't particularly follow. "Expensive house" is very subjective - there may be people that consider yours to be expensive, and people in houses you perceive to be expensive may be well within their means; housing market decline usually affects all levels to an extent. The main threat would come right at the very top end in London, if foreign buyers / money launderers stop investing in the UK.

Edited by johnnyBv8 on Wednesday 1st April 07:39
I wasn't really being too serious, it's obvious at this moment in time the market for non-essential goods would've took a hit and no one knows what the outcome will be.