Will Coronavirus hit used car prices?

[anonymous-user]

Deep Thought said:

What are people seeing out there in terms of demand and price moment? Think of people out there actively looking for a car right now and those in the trade?

• Is there still high demand?
• Is the supply of used cars improving? Trade ins, auctions opening up, etc
• Are prices still as firm as they were or is there now some leeway in prices?
• Any signs of that changing?

I look at cheap Porsche Boxsters on eBay every day (think Poverty Pork thread on here) and a month ago a 986 under £6K or 987 under £10k would literally sell the same day. Over the last week I have noticed these cars hanging around and a return of the under £4K boxster. A tidy looking 2001 Boxster S with sensible mileage and decent MOT history was listed for £5450 last week which I thought would sell in hours. The price has since been lowered to £4995 and it still hasn't sold.

Maybe I am imagining this and things are still crazy?

[93DW]

Deep Thought said:

What are people seeing out there in terms of demand and price moment? Think of people out there actively looking for a car right now and those in the trade?

• Is there still high demand?
• Is the supply of used cars improving? Trade ins, auctions opening up, etc
• Are prices still as firm as they were or is there now some leeway in prices?
• Any signs of that changing?

• - Demand is still very much there, plenty of enquiries still coming through
• - Auctions still closed apart from arranged collections atm
• - As of this morning most cars are still making top trade money including stuff in poor condition or with no history
• - Not at present

[av185]

Both main UK auction groups are still physically closed pending government Covid policy on mass gatherings.

Online auction bidding is very strong prices are at all time highs across all vehicles with no signs whatsoever of demand reducing.

[Venisonpie]

av185 said:

Both main UK auction groups are still physically closed pending government Covid policy on mass gatherings.

Online auction bidding is very strong prices are at all time highs across all vehicles with no signs whatsoever of demand reducing.

Hmm, not quite that straight forward. The market is strong but I think the rest is a little OTT. Some outliers are coming down in price with cars hanging around (Alpine) and the auction house I use is starting to see a surge in supply, particularly passenger car.

So I agree it's strong but the rest is maybe a bit fanciful I fear.

[av185]

Venisonpie said:

av185 said:

Both main UK auction groups are still physically closed pending government Covid policy on mass gatherings.

Online auction bidding is very strong prices are at all time highs across all vehicles with no signs whatsoever of demand reducing.

Hmm, not quite that straight forward. The market is strong but I think the rest is a little OTT. Some outliers are coming down in price with cars hanging around (Alpine) and the auction house I use is starting to see a surge in supply, particularly passenger car.

So I agree it's strong but the rest is maybe a bit fanciful I fear.

We buy literally 100s of ex Lex Autolease and Motability 3 year old and newer quality ex lease low mileage cars weekly largely from BCA.

I can assure you prices are at all time relative record highs and ALL vehicles are making well over CAP clean most 10% over some up to 20% over. If anything prices are increasing weekly there is no let up in demand with prices reflecting this.

Check out other used car threads all of which will concur.

Mid £150k to high end cars even over £400k show similar demand with Redline Romans Bramley and TH desperate for stock with Ferrari and Porsche amongst others having just raised used car prices up to 10%.

Personally I and many others have never known demand for used cars as strong as this across the board at all levels and prices ££.

Edited by av185 on Monday 13th July 14:17

[johnnyBv8]

av185 said:

Venisonpie said:

av185 said:

Both main UK auction groups are still physically closed pending government Covid policy on mass gatherings.

Online auction bidding is very strong prices are at all time highs across all vehicles with no signs whatsoever of demand reducing.

Hmm, not quite that straight forward. The market is strong but I think the rest is a little OTT. Some outliers are coming down in price with cars hanging around (Alpine) and the auction house I use is starting to see a surge in supply, particularly passenger car.

So I agree it's strong but the rest is maybe a bit fanciful I fear.

We buy literally 100s of ex Lex Autolease and Motability 3 year old and newer quality ex lease low mileage cars weekly largely from BCA.

I can assure you prices are at all time relative record highs and ALL vehicles are making well over CAP clean most 10% over some up to 20% over. If anything prices are increasing weekly there is no let up in demand with prices reflecting this.

Check out other used car threads all of which will concur.

Mid £150k to high end cars even over £400k show similar demand with Redline Romans Bramley and TH desperate for stock with Ferrari and Porsche amongst others having just raised used car prices up to 10%.

Personally I and many others have never known demand for used cars as strong as this across the board at all levels and prices ££.

Edited by av185 on Monday 13th July 14:17

I've given up on BCA for now - the norm seems to be 10-15% over CAP clean I'd say. I just can't see how it will last - there is so much "free" money at the moment, with £10k grants for small businesses (minimal eligibility hurdles), £50k bounceback loans, people not having the same opportunities to spend money on retail shopping or holidays. Totally mental. But this will dry up, and I'd be amazed if prices haven't dropped back massively in a few months time...the key is to make money now but not be left holding overpriced stock when the music stops.

[kevinon]

It could happen that the shortage of new car sales will reduce the number of used cars available.



Certainly the Times story below, using reputable sources (SMMT, head of Ford) is less than rosy. Ford plan to shut more than half of their dealerships by 2025. Ford UK MD says there will be 20% fewer across the industry.

What strikes me is how little profit there is in cars in the sales channel.



https://www.thetimes.co.uk/edition/news/will-the-u...

Edited by kevinon on Monday 13th July 16:30

[kevinon]

Here's the graphic on new car sales, which could 'starve' the used car market if it continues.

[Deep Thought]

kevinon said:

Here's the graphic on new car sales, which could 'starve' the used car market if it continues.

Those willing the new car market to crash need to be very careful what they wish for....

[av185]

johnnyBv8 said:

av185 said:

Venisonpie said:

av185 said:

Both main UK auction groups are still physically closed pending government Covid policy on mass gatherings.

Online auction bidding is very strong prices are at all time highs across all vehicles with no signs whatsoever of demand reducing.

Hmm, not quite that straight forward. The market is strong but I think the rest is a little OTT. Some outliers are coming down in price with cars hanging around (Alpine) and the auction house I use is starting to see a surge in supply, particularly passenger car.

So I agree it's strong but the rest is maybe a bit fanciful I fear.

We buy literally 100s of ex Lex Autolease and Motability 3 year old and newer quality ex lease low mileage cars weekly largely from BCA.

I can assure you prices are at all time relative record highs and ALL vehicles are making well over CAP clean most 10% over some up to 20% over. If anything prices are increasing weekly there is no let up in demand with prices reflecting this.

Check out other used car threads all of which will concur.

Mid £150k to high end cars even over £400k show similar demand with Redline Romans Bramley and TH desperate for stock with Ferrari and Porsche amongst others having just raised used car prices up to 10%.

Personally I and many others have never known demand for used cars as strong as this across the board at all levels and prices ££.

Edited by av185 on Monday 13th July 14:17

I've given up on BCA for now - the norm seems to be 10-15% over CAP clean I'd say. I just can't see how it will last - there is so much "free" money at the moment, with £10k grants for small businesses (minimal eligibility hurdles), £50k bounceback loans, people not having the same opportunities to spend money on retail shopping or holidays. Totally mental. But this will dry up, and I'd be amazed if prices haven't dropped back massively in a few months time...the key is to make money now but not be left holding overpriced stock when the music stops.

Imo these crazy levels of increasing prices across all used stock will continue well into next year at least irrespective of future Covid waves and economic uncertainty particularly as Kevinon correctly points out new car production will be cutback.

Don't forget that up to lockdown residuals ££ on mainstream cars in particular have always been hugely dictated by oversupply and once this is cut back following cuts in new car production and being set to continue then even given restrictions on the demand side for used cars due to the economic fallout of Covid prices will continue to climb for the forseeable future and well into next year at least.

Looks like the days of the 20k miles 3 year old eurobox at 30% of new price at Auction due to under supply could well be a distant memory as buyers will now have to pay more like 50% for such vehicles soon.

[Throttlebody]

Venisonpie said:

av185 said:

Both main UK auction groups are still physically closed pending government Covid policy on mass gatherings.

Online auction bidding is very strong prices are at all time highs across all vehicles with no signs whatsoever of demand reducing.

Hmm, not quite that straight forward. The market is strong but I think the rest is a little OTT. Some outliers are coming down in price with cars hanging around (Alpine) and the auction house I use is starting to see a surge in supply, particularly passenger car.

So I agree it's strong but the rest is maybe a bit fanciful I fear.

Exactly, a broader sales picture based on reliable data such as Indicata is needed -

Used car buyers purchasing 6-12 year old cars led to a 3.7% rise in sales in Jun 20 compared with June 19 and sales of cars aged 6-9-years old and 9-12-year old rose by about 10% on average. But the 0-3-year old used car sector fell by 7.1%

So mixed results overall.

[av185]

Throttlebody said:

Venisonpie said:

av185 said:

Both main UK auction groups are still physically closed pending government Covid policy on mass gatherings.

Online auction bidding is very strong prices are at all time highs across all vehicles with no signs whatsoever of demand reducing.

Hmm, not quite that straight forward. The market is strong but I think the rest is a little OTT. Some outliers are coming down in price with cars hanging around (Alpine) and the auction house I use is starting to see a surge in supply, particularly passenger car.

So I agree it's strong but the rest is maybe a bit fanciful I fear.

Exactly, a broader sales picture based on reliable data such as Indicata is needed -

Used car buyers purchasing 6-12 year old cars led to a 3.7% rise in sales in Jun 20 compared with June 19 and sales of cars aged 6-9-years old and 9-12-year old rose by about 10% on average. But the 0-3-year old used car sector fell by 7.1%

So mixed results overall.

Restricted supply of 0 to 3 year old cars resulted in the 7.1% drop.

[Throttlebody]

av185 said:

Restricted supply of 0 to 3 year old cars resulted in the 7.1% drop.

Or people just weren’t buying them.

[Shadow R1]

It's reading like the lynchpin is the physical auctions opening up again.

[anonymous-user]

it's becoming clear we are seeing market changes never seen before, we will probably see the biggest disconnect between used and new market movements ever.

Its still way too early to know what the fallout is likely to be in 12 months time.

[Auto810graphy]

kevinon said:

It could happen that the shortage of new car sales will reduce the number of used cars available.



Certainly the Times story below, using reputable sources (SMMT, head of Ford) is less than rosy. Ford plan to shut more than half of their dealerships by 2025. Ford UK MD says there will be 20% fewer across the industry.

What strikes me is how little profit there is in cars in the sales channel.



https://www.thetimes.co.uk/edition/news/will-the-u...

Edited by kevinon on Monday 13th July 16:30

A few manufacturers including Ford and Vauxhall have been planning dealer closures for some time in favour of more spread out larger outlets.

[Auto810graphy]

Shadow R1 said:

It's reading like the lynchpin is the physical auctions opening up again.

I think quite a lot more sales will be online only. Traditional dealers will still want to touch and feel the cheaper stuff but newer is fine if it is appraised correctly.

I purchased an ex management Range Rover last week, pictures online, bid online, Land Rover deliver direct from Upper Heyford prepared to Land Rover used car standards.

[Auto810graphy]

kevinon said:

Here's the graphic on new car sales, which could 'starve' the used car market if it continues.

I know of two main dealer groups who can’t cope with the volume of new leasing work at the moment, one sent a very blunt email out saying please do not send any new business requests this week as they have such a backlog of paperwork and orders.

It’s the same with our funders and logistics, there are not enough staff to cope.

Will it continue? I am expecting a slow down but there is no sign of it yet.

[av185]

Auto810graphy said:

Shadow R1 said:

It's reading like the lynchpin is the physical auctions opening up again.

I think quite a lot more sales will be online only. Traditional dealers will still want to touch and feel the cheaper stuff but newer is fine if it is appraised correctly.

This is the main problem with the big two UK auction groups.

There is little consistency in grade appraisals even at the same auction centres.

We constantly purchase grade 3 stock which is often in better condition than grade 1.

[Throttlebody]

Auto810graphy said:

I know of two main dealer groups who can’t cope with the volume of new leasing work at the moment, one sent a very blunt email out saying please do not send any new business requests this week as they have such a backlog of paperwork and orders.

It’s the same with our funders and logistics, there are not enough staff to cope.

Will it continue? I am expecting a slow down but there is no sign of it yet.

Less than 12% of franchised dealers were fully staffed in Jul. NFDA data.

Companies are using furlough to reduced staffing overheads. Reduced workforces looking busy.