Will Coronavirus hit used car prices?

[Dohnut]

Joey Deacon said:

I suspect if you want to buy a brand new car that is not in stock for cash with no part exchange and refuse GAP, Tyre Insurance, Dent Insurance, Supaguard and know the CarWow price you are too much hassle for them.

This is me right now, although looking to buy with finance. The main dealer offers I've received aren't spectacular right now - circa 11% off of list on a new XC90. Had they been better I would have pushed the button already but I'm now waiting until end of Q3 in the hope prices will soften further.

My only concern at the moment is if sales do dry up will dealers be willing to discount further or try and squeeze as much out of any sale as possible.

[Deep Thought]

Throttlebody said:

TA14 said:

Deep Thought said:

What Car figures quoted are quite bemusing - 71% "expect" a better deal?

Want a better deal not expect; I'm surprised that it's not 100%. Who doesn't want a better deal?

Significant point is 71% of buyers want a better deal than was available pre CV19. They see CV19 as a significant milestone in their attitude and expectation for a new car deal.

And has been said - that "want" is likely to be met anyway, given the amount of incentives that are currently around - deferred payments, manufacturers making initial payments, redundancy insurance thrown in, lower / 0% APR, enhanced finance incentives, etc.

And if it cant be met then it may well be down to expectation management - people "wanted" cheaper used cars post lockdown but didnt get them, and used cars sold anyway.

These things arent as insurmountable as some would believe. Manufacturers and dealers will adapt to the prevailing expectation of buyers.

Edited by Deep Thought on Thursday 9th July 14:52

[93DW]

Dohnut said:

This is me right now, although looking to buy with finance. The main dealer offers I've received aren't spectacular right now - circa 11% off of list on a new XC90. Had they been better I would have pushed the button already but I'm now waiting until end of Q3 in the hope prices will soften further.

My only concern at the moment is if sales do dry up will dealers be willing to discount further or try and squeeze as much out of any sale as possible.

I cant imagine offers getting any better than they are now? Most factories were shut for 10 weeks so that will slow down supply which will take a few months to catch up, so if the dealers cant even deliver the cars for 3-4 months I cant imagine they'll be wanting to piss away even more margin as well.

[Court_S]

Deep Thought said:

Joey Deacon said:

Deep Thought said:

People have also been able to use brokers for decades to find them the best price and simply then arrange pickup from the dealer, if people want to do that.

This is not a sudden, new "e-commerce" thing.

I have done searches on Car Wow in the past before visiting dealers to look at brand new cars. They certainly don't like it when they bring out the full list price quote with GAP, Tyre Insurance, Supaguard etc. and you show them the Carwow price you have been quoted from another dealer.

Other dealers who obviously sell through Car Wow will give you the car wow price as soon as you mention it to them.

I would buy through Car Wow every time, especially if I don't have to go through the whole salesman game. I don't care if you just throw the keys at me and tell me to get out as I collect the car if it saves £5k.

Yes, i've used CarWow, Broadspeed and DriveTheDeal to do that.

I've had the full range of responses - feigned disbelief, laughing, denial that that price can be got, etc, etc. Generally they end up matching or coming close.

The only one who didnt was our local Mazda dealer who were adamant the price couldnt be meet by the broker but would give us a "good will gesture" of £500 off list price (£28K Mazda MX5 RC) when the brokers were offering £4K off. There was no doubt the car could have been got from the broker but we eventually decided not to go for the car anyway so it became a moot point.

Had similar with Sytner in a few occasions...

First was my other half’s F56 Cooper. I knew the spec we wanted and got a good quote via Coast2Coast. I didn’t really fancy a trip to Gatwick to collect so I thought I’d try my local Sytner. Chap there basically accused me of lying saying that there were no discounts on MINI’s despite me having a copy of the quote. The Sytner dealership down the road from my office had no issues matching it.

When buying my M140i I saw my local dealer trying to get a deal done, knowing roughly what I wanted to pay for the spec. Was told on multiple times that it was never going to happen, despite showing them the TRL prices, their best price was costing them to sell the car etc. Thanked them for their time and left it. Ordered my car from TRL. They called me a few weeks later, told them I’d ordered a car and what the deal was....’oh, we could have matched that’ was the response. But a few weeks ago it was costing you to sell me the car

[krs_sn]

I had my car up on autotrader. Got a few bites from private buyers(lowish offers). Got a call from a dealer effectively offering me my full asking price and he paid a £250 deposit. I'm still in disbelief.

[fido]

They aren't desperate to shift cars. Have made two offers for p/x. My car is a minter and i was only asking mid-trade for mine in exchange for full price. Mind you i'm not that desperate to buy one so works both ways! I assume they make little on each car - and it's related finance deals that rake it in.

[TA14]

Deep Thought said:

Throttlebody said:

TA14 said:

Deep Thought said:

What Car figures quoted are quite bemusing - 71% "expect" a better deal?

Want a better deal not expect; I'm surprised that it's not 100%. Who doesn't want a better deal?

Significant point is 71% of buyers want a better deal than was available pre CV19. They see CV19 as a significant milestone in their attitude and expectation for a new car deal.

And has been said - that "want" is likely to be met anyway, given the amount of incentives that are currently around - deferred payments, manufacturers making initial payments, redundancy insurance thrown in, lower / 0% APR, enhanced finance incentives, etc.

And if it cant be met then it may well be down to expectation management - people "wanted" cheaper used cars post lock down but didn't get them, and used cars sold anyway.

These things aren't as insurmountable as some would believe. Manufacturers and dealers will adapt to the prevailing expectation of buyers.

My guess is that it's going to be hard to get a better deal. On the one hand working from home etc. has shown some that they can get away with one less car so car sales may fall in the long term and with a shrinking market manufacturers will want to lower prices to keep market sales numbers. On the other hand I had the impression that things were quite tight in the car industry anyway and a lock down for a few months will have a financial cost which may even put pressure on price rises. For second hand cars, if new car sales are slow for a year, then they are likely to remain firm. After that tax changes on emissions/tax disc/electric vehicles etc seem to have a big effect on value.

[Deep Thought]

93DW said:

Dohnut said:

This is me right now, although looking to buy with finance. The main dealer offers I've received aren't spectacular right now - circa 11% off of list on a new XC90. Had they been better I would have pushed the button already but I'm now waiting until end of Q3 in the hope prices will soften further.

My only concern at the moment is if sales do dry up will dealers be willing to discount further or try and squeeze as much out of any sale as possible.

I cant imagine offers getting any better than they are now? Most factories were shut for 10 weeks so that will slow down supply which will take a few months to catch up, so if the dealers cant even deliver the cars for 3-4 months I cant imagine they'll be wanting to piss away even more margin as well.

I think they're probably matching demand with output as you say, but there are some good, targeted deals out there. Ford were doing "we'll pay your first three payments", plus deferred start by 3 months, plus 0% APR on a lot of their range. Others have been offereing free redundancy insurance.

I guess we're really looking now at what they do as the "pent up demand" starts to level off and potentially drop. It will be interesting to see then how they coax people in to showrooms.

Also, dont forget it doesnt have to be margin they give away - it could be as i said more targeted incentives. For example free redundancy insurance could be relatively cheap for them to do and they might be otherwise reducing the manufacturers contribution in to the finance deal to offset it. That assurance of the insurance (ha!) might hold more appeal than a few pounds per month off a customers financing payments.

[Deep Thought]

fido said:

They aren't desperate to shift cars. Have made two offers for p/x. My car is a minter and i was only asking mid-trade for mine in exchange for full price. Mind you i'm not that desperate to buy one so works both ways! I assume they make little on each car - and it's related finance deals that rake it in.

The trick will be down the line what they do. Theres pent up demand / reduced output so they're probably "ok" at the moment, but that is almost certain to change.

Right now is not the best time to buy used, and might not be the best time to buy new either.

[wsn03]

Sheepshanks said:

wsn03 said:

I would be worried if I was working for JLR, especially knowing how close to the wind they sail.

80% of their sales are abroad. China has picked back up strongly.

True, but working from home has become the new 'normal' in most parts of the developed world. China picking up strongly is a good thing, when I did work for JLR China made up most of their profits (even though they didn't account for most of their sales).

My concern for JLR is the type of car they are selling - they aren't the type people are going to "scale down" to.

[Deep Thought]

TA14 said:

My guess is that it's going to be hard to get a better deal. On the one hand working from home etc. has shown some that they can get away with one less car so car sales may fall in the long term and with a shrinking market manufacturers will want to lower prices to keep market sales numbers. On the other hand I had the impression that things were quite tight in the car industry anyway and a lock down for a few months will have a financial cost which may even put pressure on price rises. For second hand cars, if new car sales are slow for a year, then they are likely to remain firm. After that tax changes on emissions/tax disc/electric vehicles etc seem to have a big effect on value.

Agreed RE: used cars, yes. Used car prices have been relatively low because so many new cars are sold. If less new cars are sold, then used car prices could rise overall.

For example, with diesel cars - not as popular with new car buyers now, so new car volumes are down, but still popular with used car buyers, so the prices of good diesels is in some cases up.

We could see that happening across the piste.

Those wishing to see the new car / PCP finance market collapse really need to be very careful what they wish for - in case they get it.

Granted if you're looking at some £1K ropey old jag, then its maybe not so much of an issue.

[Deep Thought]

wsn03 said:

Sheepshanks said:

wsn03 said:

I would be worried if I was working for JLR, especially knowing how close to the wind they sail.

80% of their sales are abroad. China has picked back up strongly.

True, but working from home has become the new 'normal' in most parts of the developed world. China picking up strongly is a good thing, when I did work for JLR China made up most of their profits (even though they didn't account for most of their sales).

My concern for JLR is the type of car they are selling - they aren't the type people are going to "scale down" to.

Yup i think thats a real risk.

Audi, BMW, Merc - all have models that it would be easy to downsize to. Trickier with JLR.

[Harris_I]

I've been following this thread (and used prices) with great interest. Been following the market for Merc C43 since the start of the year, with a view to buying by summer. The bizarre thing is prices have barely moved since just before lockdown (barring a little natural depreciation).

Since I don't need a car for now, I'm happy to wait until the autumn. But I had a really weird conversation with a dealer who's had the same car in stock since February. When I suggested would he be OK for me to make an offer over the phone before I travelled to see the car, he said "I'll stop you right there", and said he would not take anything less than sticker price. I said OK then, I'll wait until the autum and check the market again, to which he responded prices are going up "because Brexit". Had a genuine head scratching moment there. He waffled something about VAT but I think he meant the 10% additional tariff that might be imposed on new cars if the UK leaves without a deal. (Albeit he mentioned 20-30% price rises, I mean this guy was really smoking something strong).

I thought I'd leave him to his fantasy and just take a look at the market in a month or two, see if the furlough taper has made any difference to demand. And then if I'm wrong, I'm wrong, so be it.

[Auto810graphy]

Throttlebody said:

Significant point is 71% of buyers want a better deal than was available pre CV19. They see CV19 as a significant milestone in their attitude and expectation for a new car deal.

Not really that significant, if anything that is low. Imagine asking 10 pub goes if they wanted lower prices, I would expect 100% would want this.

Once again you are just stating the obvious

[ChocolateFrog]

Harris_I said:

I've been following this thread (and used prices) with great interest. Been following the market for Merc C43 since the start of the year, with a view to buying by summer. The bizarre thing is prices have barely moved since just before lockdown (barring a little natural depreciation).

Since I don't need a car for now, I'm happy to wait until the autumn. But I had a really weird conversation with a dealer who's had the same car in stock since February. When I suggested would he be OK for me to make an offer over the phone before I travelled to see the car, he said "I'll stop you right there", and said he would not take anything less than sticker price. I said OK then, I'll wait until the autum and check the market again, to which he responded prices are going up "because Brexit". Had a genuine head scratching moment there. He waffled something about VAT but I think he meant the 10% additional tariff that might be imposed on new cars if the UK leaves without a deal. (Albeit he mentioned 20-30% price rises, I mean this guy was really smoking something strong).

I thought I'd leave him to his fantasy and just take a look at the market in a month or two, see if the furlough taper has made any difference to demand. And then if I'm wrong, I'm wrong, so be it.

They're selling something that's the precursor to questioning everything they say.

TBF you asked if he'd take an offer and he said no straight away, atleast you both know where you stand.

I predicted October for a noticable drop in prices initially. I think that's being pushed to the right by the governments open cheque book policy. Jan/Feb 21 will be a good time to take stock and see what's really happening.

[RUSTILLDOWN]

Harris_I said:

I've been following this thread (and used prices) with great interest. Been following the market for Merc C43 since the start of the year, with a view to buying by summer. The bizarre thing is prices have barely moved since just before lockdown (barring a little natural depreciation).

Since I don't need a car for now, I'm happy to wait until the autumn. But I had a really weird conversation with a dealer who's had the same car in stock since February. When I suggested would he be OK for me to make an offer over the phone before I travelled to see the car, he said "I'll stop you right there", and said he would not take anything less than sticker price. I said OK then, I'll wait until the autum and check the market again, to which he responded prices are going up "because Brexit". Had a genuine head scratching moment there. He waffled something about VAT but I think he meant the 10% additional tariff that might be imposed on new cars if the UK leaves without a deal. (Albeit he mentioned 20-30% price rises, I mean this guy was really smoking something strong).

I thought I'd leave him to his fantasy and just take a look at the market in a month or two, see if the furlough taper has made any difference to demand. And then if I'm wrong, I'm wrong, so be it.

That’s salesmen for you! They typically believe in playing the waiting game and even though it makes no sense to the customer it’ll probably work out well for them 8 out of 10 years.

As per my previous posts, although I WANT a new car I don’t NEED a new car and given my reduced mileage over the last few months I’ve decided to wait until Q1 or Q2 next year before looking again. I’m sure there are a lot of other people in the same boat.

[av185]

Harris_I said:

I've been following this thread (and used prices) with great interest. Been following the market for Merc C43 since the start of the year, with a view to buying by summer. The bizarre thing is prices have barely moved since just before lockdown (barring a little natural depreciation).

Since I don't need a car for now, I'm happy to wait until the autumn. But I had a really weird conversation with a dealer who's had the same car in stock since February. When I suggested would he be OK for me to make an offer over the phone before I travelled to see the car, he said "I'll stop you right there", and said he would not take anything less than sticker price. I said OK then, I'll wait until the autum and check the market again, to which he responded prices are going up "because Brexit". Had a genuine head scratching moment there. He waffled something about VAT but I think he meant the 10% additional tariff that might be imposed on new cars if the UK leaves without a deal. (Albeit he mentioned 20-30% price rises, I mean this guy was really smoking something strong).

I thought I'd leave him to his fantasy and just take a look at the market in a month or two, see if the furlough taper has made any difference to demand. And then if I'm wrong, I'm wrong, so be it.

The 10% hard Brexit surcharge if imposed could very well support used car prices further particularly nearly new stuff for obvious reasons.

Mid to high end priced late stuff will doubtless show a substantial uplift.

[Deep Thought]

ChocolateFrog said:

They're selling something that's the precursor to questioning everything they say.

TBF you asked if he'd take an offer and he said no straight away, atleast you both know where you stand.

I predicted October for a noticable drop in prices initially. I think that's being pushed to the right by the governments open cheque book policy. Jan/Feb 21 will be a good time to take stock and see what's really happening.

I think its interesting that in March there were predictions that it would be carnage as soon as the dealers opened, then it was that it would be bad in October, now its looking like it'll be next Jan / Feb before we can take stock.

If the ripple effect takes that until then or longer to hit the used car market perhaps it will be much softer than the initial End of the World predictions, if noticable at all?

Edited by Deep Thought on Thursday 9th July 21:20

[Harris_I]

ChocolateFrog said:

TBF you asked if he'd take an offer and he said no straight away, atleast you both know where you stand.

True. I prefer it that way. That way neither of us is wasting each other's time.

That said, one thing I didn't mention about the conversation. I happened to say I was also looking at the BMW 340i as a direct comparison and he had a rant about BMW build quality being terrible (apparently the steel panels are very thin!!). I really do wonder if there is a particular car salesman finishing school that specialises in advanced bks...

[av185]

Ferrari main dealers have now raised their prices up to 10% on all used stock ££ across the board reflecting the unprecedented demand.