Will Coronavirus hit used car prices?
Discussion
Throttlebody said:
It’s was even referred to in your links earlier. You are getting confused with sub prime mortgages and the differences between the term applied to either borrowers or lenders products.
Sub prime is used by PCP ABS to define one of the levels of potential default risk of the borrower. When loans are packaged up into tranches it allows, in simple terms, a degree of definition on where the risk sits. Default being the key word.
And as always you don’t read what I say. My initial comment sparking this off was ‘sub prime selling’ you changed it to ‘sub prime lending’. Even now you are suggesting above that I said ‘PCP users are sub prime’ An element of them are. Take more time to read what people are saying rather than what your imagination seems to conjures up.
You deliberately incorrectly use the term "sub prime" in a derogatory manner when referring to PCP users.Sub prime is used by PCP ABS to define one of the levels of potential default risk of the borrower. When loans are packaged up into tranches it allows, in simple terms, a degree of definition on where the risk sits. Default being the key word.
And as always you don’t read what I say. My initial comment sparking this off was ‘sub prime selling’ you changed it to ‘sub prime lending’. Even now you are suggesting above that I said ‘PCP users are sub prime’ An element of them are. Take more time to read what people are saying rather than what your imagination seems to conjures up.
End of.
Deep Thought said:
You deliberately incorrectly use the term "sub prime" in a derogatory manner when referring to PCP users.
End of.
Afraid not DT. It’s not derogatory. If you had a bit more knowledge of how PCP loans, securitisation and ABS actually works and is tiered you would understand. Even a quick Google with ‘PCP, ABS and sub prime’ should help.End of.
https://www.bbc.co.uk/news/business-52845849
Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
Sevenon said:
https://www.bbc.co.uk/news/business-52845849
Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
If fewer new cars are made and purchased, the supply of cars that feed the used car market will dry up. Because people have less money, more will turn to the used market, so for certain sectors, prices could actually go up as there will be less choice. People might hang to their cars longer too, so again, less choice on the used market, so prices rise (for good cars, at least).Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
You might see 20% off new car prices, but that has always been the case. Some models you can get nearer to 30% off list price, and that was pre-covid!
growlerowl said:
tokyotv said:
It would be interesting to see what the world would Look like without the addiction to credit.
A lot fewer cars clogging the roads up....and a less people wasting their life looking at smart phones.
If you can’t afford it.....you should not buy it....
I agree. I suspect we'd all be a lot happier (apart from the would-be gazillionaires that wouldn't be able to cream off nearly as much), and lots of people would be forced to get more worthwhile careers. Society is broken and people think a new [insert product here] will make up for it. It won't...A lot fewer cars clogging the roads up....and a less people wasting their life looking at smart phones.
If you can’t afford it.....you should not buy it....
If you remove credit from the economy, there will be little return on investments or savings either. Lending pays the returns for savings and investments.
Camelot1971 said:
Sevenon said:
https://www.bbc.co.uk/news/business-52845849
Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
If fewer new cars are made and purchased, the supply of cars that feed the used car market will dry up. Because people have less money, more will turn to the used market, so for certain sectors, prices could actually go up as there will be less choice. People might hang to their cars longer too, so again, less choice on the used market, so prices rise (for good cars, at least).Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
You might see 20% off new car prices, but that has always been the case. Some models you can get nearer to 30% off list price, and that was pre-covid!
There will be some cracking deals to keep new cars being sold, but production levels will be reduced so there will be no need for new cars prices to fall off a cliff.
The used market will be harder to predict. I think we'll still see people changing their cars but their requirements - perhaps to something more economical, right sized for their needs - will change.
I think the likely to be hardest hit are nearly new to say 5 year old medium to large SUV types such as Q5, X3 / X5, etc - known to be sore on fuel, bigger than most people really need, etc.
It'll be interesting to watch it all change. I do think it will be change though rather than an overall used car market crash. There will be winners and losers across model types.
Edited by Deep Thought on Friday 29th May 09:46
Sevenon said:
https://www.bbc.co.uk/news/business-52845849
Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
Basic supply and demand economics. Fewer cars produced = higher prices.Is this just the start of mass redundancies across the car industry? How people do not think used car prices won't drop are either super optimistic or been hiding beneath a rock.
End of this year will see used car prices drop at least 20% from today's prices.
By this time years young couples will be saving to get a foot on the car ladder and be buying houses on PCP, you mark my words.
Throttlebody said:
More detail on how the Govt is going to trim furlough from Aug will now be starting to concentrate business minds.
Not sure what business minds you're talking about but people in business have been concentrating for a long time before you came along. And particularly since the start of the crisis. And before furlough was announced. And before the way it was going to be tapered was mentionned a few weeks ago already. Camelot1971 said:
If fewer new cars are made and purchased, the supply of cars that feed the used car market will dry up. Because people have less money, more will turn to the used market, so for certain sectors, prices could actually go up as there will be less choice. People might hang to their cars longer too, so again, less choice on the used market, so prices rise (for good cars, at least).
You might see 20% off new car prices, but that has always been the case. Some models you can get nearer to 30% off list price, and that was pre-covid!
Used cars are already too high priced in a lot of areas. By the nature of supply & demand although what you say is one correct measure with less used hitting the market - more people keeping hold of their cars will result in dealerships looking to drive demand by lowering prices. Its not always a ‘stock on hand’ method, but more P&L and cashflow. The manufacturers should in theory be throwing money at the market once fully back to capacity - but the big hinderance is going to be the EU emissions fine. Instead they may try to turn to battery and PHEV, but there is a worldwide shortage of quality batteries (Samsung/Pana/LG) with 3 month waits on minor cells so the car market in general will be in for a world of pain. What we will probably see is job cuts and market restrictions with price rises on a lot of new cars. You might see 20% off new car prices, but that has always been the case. Some models you can get nearer to 30% off list price, and that was pre-covid!
Basically - its all guesswork for now and deoends which camp you fall into!
OddCat said:
Why did you sell after just 4 months ?
Combination of things really. Recent redundancies at work made me start to feel uneasy. Also I've been working from home ever since the lockdown and unlikely to be back in the office this year so it wasn't getting used. Then I'm hearing/ reading about impending recessions, likely to be the worst ever and just thought sell now, money in bank and see what happens but without any worries really. Did love it and that fantastic 4.0TT V8 but I could always get another in the future. nickfrog said:
Throttlebody said:
More detail on how the Govt is going to trim furlough from Aug will now be starting to concentrate business minds.
Not sure what business minds you're talking about but people in business have been concentrating for a long time before you came along. And particularly since the start of the crisis. And before furlough was announced. And before the way it was going to be tapered was mentionned a few weeks ago already. Camelot1971 said:
What do you determine as a worthwhile career? Who are you to determine what other people do with their lives?
If you remove credit from the economy, there will be little return on investments or savings either. Lending pays the returns for savings and investments.
Agreed. Lending / credit greases the wheels of the economy. Too little and things grind to a halt. Too much and the machine starts spinning too fast..If you remove credit from the economy, there will be little return on investments or savings either. Lending pays the returns for savings and investments.
Throttlebody said:
nickfrog said:
Throttlebody said:
More detail on how the Govt is going to trim furlough from Aug will now be starting to concentrate business minds.
Not sure what business minds you're talking about but people in business have been concentrating for a long time before you came along. And particularly since the start of the crisis. And before furlough was announced. And before the way it was going to be tapered was mentionned a few weeks ago already. Again, "business minds" have been concentrating for a long time. They probably don't need you.
Edited by nickfrog on Friday 29th May 10:31
The spinner of plates said:
Camelot1971 said:
What do you determine as a worthwhile career? Who are you to determine what other people do with their lives?
If you remove credit from the economy, there will be little return on investments or savings either. Lending pays the returns for savings and investments.
Agreed. Lending / credit greases the wheels of the economy. Too little and things grind to a halt. Too much and the machine starts spinning too fast..If you remove credit from the economy, there will be little return on investments or savings either. Lending pays the returns for savings and investments.
Binary views from a minority of disgruntled weirdos are not useful.
I sense that access to credit will be harder to come by very soon. Have you seen the profit warnings and share price of the main financial institutions recently. Not good. Their operating margins will need to increase. Bad news for lenders. Bad news for cheap car deals. Less demand going forward.
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