Will Coronavirus hit used car prices?
Discussion
nickfrog said:
Just stating an opinion about a small minority here (as opposed to anyone), mainly TB. Happy to be proved wrong but you're not helping.
This is a discussion forum where we're all free to engage with each other, that's sort of the whole point of it. If you don't like my opinions Mike, why don't you ignore them and I'll do the same, deal ? That way I can move out.
It's not that I don't like your opinions as such, I just don't appreciate someone claiming to 'have no skin in the game' and attempting to adopt an attitude of breezy insouciance over a particular situation and debate whilst simultaneously holding derogatory and disparaging views and making baseless generalisations of one side of the debates position.This is a discussion forum where we're all free to engage with each other, that's sort of the whole point of it. If you don't like my opinions Mike, why don't you ignore them and I'll do the same, deal ? That way I can move out.
Edited by nickfrog on Sunday 7th June 08:53
I realise I've 'found you out' and you don't really like it but as I said earlier you've really nothing to worry about, from what I've seen they're going to do whatever it takes to protect the feckless debt junkies and allow the whole debt fuelled charade that is our economy to carry on regardless.
Anyway, must go, mother says I have to tidy my room.
growlerowl said:
I just can't square how a quarter's worth ish (at best) of deleted productivity across so many sectors cannot lead to big big economic problems, even in spite of whatever tricks they pull to try to fix it. Due to my situation I think I'll be OK personally either way it goes so no skin off my nose if I can't get my cheap V8, and I don't want to see friends and family getting burnt. But I suspect it's a bit premature to be crowing just yet. The real pain is still in the post.
Agreed. It will definitely be tough. Likewise with my similar aspirations to have something a bit more fruity than the 330i. Not the end of the world if i dont get it / dont do it.growlerowl said:
Also meant to say where I am (South coast) there's apparently plenty of pent-up demand for houses with no big drop off in demand, so with stuff like that it does seem that however this thing plays out it's going to be a weird one.
It is. I'm not sure what housing demand is like here in NI and i've no estate agent friends or colleagues to chat to about what they're seeing.jimPH said:
But that seems to be the problem as far as I can tell. Everyone thinks it's going to happen to someone else and they'll benefit.
Personally, I've benefited so far, I got cheap stocks and an entry point into the market for my savings. A pay increase for working during the pandemic and no time off, so haven't spent much.
My sister saw orders drop off at her place as they supplied cut plastic for conferences and displays. All of a sudden they were inundated for orders for protective screens and guards, they didn't have the staff to cope with the upturn of orders.
Most of my mates have been able to get cheap loans which have massively reduced their overheads and saved money furloughing staff
Travel and tourism has certainly took a hit, but let's be honest, the British seaside this summer will be busier than ever if people don't go abroad.
Sure, but like I said the pain is still in the post. There's only so much artificial funding the government can get away with - it's not sustainable to be effectively paying for millions of peoples mortgages, fortnight in the sun (when that happens again), PCP etc. One way or the other that money needs at some point to come from the actual production of stuff. And so whilst we're waiting for that to happen I suspect people will find there's less money for luxuries, then the stuff they take for granted but it turns out they can live without, and the next step after that is real hardship for the majority. I think it's going to be a narrow squeak personallyPersonally, I've benefited so far, I got cheap stocks and an entry point into the market for my savings. A pay increase for working during the pandemic and no time off, so haven't spent much.
My sister saw orders drop off at her place as they supplied cut plastic for conferences and displays. All of a sudden they were inundated for orders for protective screens and guards, they didn't have the staff to cope with the upturn of orders.
Most of my mates have been able to get cheap loans which have massively reduced their overheads and saved money furloughing staff
Travel and tourism has certainly took a hit, but let's be honest, the British seaside this summer will be busier than ever if people don't go abroad.
Throttlebody said:
Some elements of rationality there.
Certain aspects of the future economy you just can’t avoid, for example - The link between the unemployment rate and new car registrations is firmly established. Unemployment UP - new car registrations DOWN. This has been a well proven relationship in the EU for many years.
Agreed yes. There is no doubt a link, though not convinced that link will equate to mass redundancies on the scale of 150,000 as the article suggests.Certain aspects of the future economy you just can’t avoid, for example - The link between the unemployment rate and new car registrations is firmly established. Unemployment UP - new car registrations DOWN. This has been a well proven relationship in the EU for many years.
Edited by Deep Thought on Sunday 7th June 10:10
Deep Thought said:
Throttlebody said:
Some elements of rationality there.
Certain aspects of the future economy you just can’t avoid, for example - The link between the unemployment rate and new car registrations is firmly established. Unemployment UP - new car registrations DOWN. This has been a well proven relationship in the EU for many years.
Agreed yes. There is no doubt a link, though not convinced that link will equate to mass redundancies on the scale of 150,000 as the article suggests.Certain aspects of the future economy you just can’t avoid, for example - The link between the unemployment rate and new car registrations is firmly established. Unemployment UP - new car registrations DOWN. This has been a well proven relationship in the EU for many years.
Edited by Deep Thought on Sunday 7th June 10:10
This is the unintended consequences of the furlough scheme. Businesses up and down the country will be taking stock and factoring in not only the impact of COVID but also a no-deal Brexit looming at the end of this year. The future is uncertain so I expect businesses to tread carefully, at least for the immediate future.
Deep Thought said:
Throttlebody said:
Some elements of rationality there.
Certain aspects of the future economy you just can’t avoid, for example - The link between the unemployment rate and new car registrations is firmly established. Unemployment UP - new car registrations DOWN. This has been a well proven relationship in the EU for many years.
Agreed yes. There is no doubt a link, though not convinced that link will equate to mass redundancies on the scale of 150,000 as the article suggests.Certain aspects of the future economy you just can’t avoid, for example - The link between the unemployment rate and new car registrations is firmly established. Unemployment UP - new car registrations DOWN. This has been a well proven relationship in the EU for many years.
Edited by Deep Thought on Sunday 7th June 10:10
maz8062 said:
I don't understand why you can't see this happening. Hypothetically speaking, let's say you were a car dealership that employed 10 staff to cover sales, admin, service, parts etc. While your dealership has been closed you decided to put 8 of the 10 staff on Furlough comforted by the government contributions to their wages. Now, when Furtlough contributions end in October would you immediately rehire all of the staff that were previously on furlough, or would you take the opportunity to take stock and re-scale your business based on your view of future demand?
This is the unintended consequences of the furlough scheme. Businesses up and down the country will be taking stock and factoring in not only the impact of COVID but also a no-deal Brexit looming at the end of this year. The future is uncertain so I expect businesses to tread carefully, at least for the immediate future.
Car dealerships tend to run very lean anyway, given their tight net margins. I just dont see 150,000 out of a workforce of 600,000 going because of this.This is the unintended consequences of the furlough scheme. Businesses up and down the country will be taking stock and factoring in not only the impact of COVID but also a no-deal Brexit looming at the end of this year. The future is uncertain so I expect businesses to tread carefully, at least for the immediate future.
Staff are either revenue earning - sales and service, or supporting revenue earning.
I think there will be some big hits - like Lookers reducing staff or closing unprofitable sites - but does a typical dealership simply roll over and accept they're not going to get as big a market share and thus lay off staff, or do they fight for the market share and ensure they have the capability to continue to win sales and provide a service for customers?
Throttlebody said:
Real data. With UK unemployment forecasts of circa 10% you can see where new car registrations are heading.
And a (potentially short term) drop in employment translates to a 25% drop in car dealership staff does it?New car sales is only part of what a franchise does. They probably do more used car sales than new and the used car sales are likely to be more profitable . On top of that a lot of their work is warranty, maintenance, service and parts.
Oh - and glad we're now in agreement that unemployment is going to reach around 10%
Edited by Deep Thought on Sunday 7th June 10:46
Deep Thought said:
And a (potentially short term) drop in employment translates to a 25% drop in car dealership staff does it?
New car sales is only part of what a franchise does. They probably do more used car sales than new and the used car sales are likely to be more profitable . On top of that a lot of their work is warranty, maintenance, service and parts.
Oh - and glad we're now in agreement that unemployment is going to reach around 10%
The unemployment guess of 10% would be a result imo but there seems to be high/medium earners being affected like pilots ,engineers, chefs etc which will be difficult for them to regain equivalent earning jobs unless their sectors pick back up!New car sales is only part of what a franchise does. They probably do more used car sales than new and the used car sales are likely to be more profitable . On top of that a lot of their work is warranty, maintenance, service and parts.
Oh - and glad we're now in agreement that unemployment is going to reach around 10%
Edited by Deep Thought on Sunday 7th June 10:46
Deep Thought said:
maz8062 said:
I don't understand why you can't see this happening. Hypothetically speaking, let's say you were a car dealership that employed 10 staff to cover sales, admin, service, parts etc. While your dealership has been closed you decided to put 8 of the 10 staff on Furlough comforted by the government contributions to their wages. Now, when Furtlough contributions end in October would you immediately rehire all of the staff that were previously on furlough, or would you take the opportunity to take stock and re-scale your business based on your view of future demand?
This is the unintended consequences of the furlough scheme. Businesses up and down the country will be taking stock and factoring in not only the impact of COVID but also a no-deal Brexit looming at the end of this year. The future is uncertain so I expect businesses to tread carefully, at least for the immediate future.
Car dealerships tend to run very lean anyway, given their tight net margins. I just dont see 150,000 out of a workforce of 600,000 going because of this.This is the unintended consequences of the furlough scheme. Businesses up and down the country will be taking stock and factoring in not only the impact of COVID but also a no-deal Brexit looming at the end of this year. The future is uncertain so I expect businesses to tread carefully, at least for the immediate future.
Staff are either revenue earning - sales and service, or supporting revenue earning.
I think there will be some big hits - like Lookers reducing staff or closing unprofitable sites - but does a typical dealership simply roll over and accept they're not going to get as big a market share and thus lay off staff, or do they fight for the market share and ensure they have the capability to continue to win sales and provide a service for customers?
Anonymous-poster said:
The unemployment guess of 10% would be a result imo but there seems to be high/medium earners being affected like pilots ,engineers, chefs etc which will be difficult for them to regain equivalent earning jobs unless their sectors pick back up!
It would be a result yes.For every 1 pilot, engineer, chef, etc, theres probably another 10 entry level job roles affected though. Even thinking of their airline industry - for every one pilot, how many supporting cabin staff, ground staff, baggage handling and airport staff will go too? Same in a restaurant, for every back end qualified chef, how many entry level cooking staff, waiters and serving staff are there?
And as has been said, as is usually the case in a recession, it tends to be those in the lower wage brackets affected most.
jammy-git said:
Given that we're seeing a move to online vehicle purchasing, at least in the short term, could that not translate to dealerships looking, or needing to lay off more staff because a certain percentage of new car purchases won't be done via a dealership, or at least in the dealership itself?
Other than the salesman's time of maybe an hour or so in front of a customer, what are you saving there? Theres still people required to man the phones, answer emails, take pics and send them on, do short video presentations, engage with the customer, review offers, negotiate. Any cars sold during lockdown via online methods - and the salesmen can correct me if i'm wrong here - was done by a salesperson not an admin person.Then you've still the normal prep, handover and support requirement for the car anyway.
Deep Thought said:
Anonymous-poster said:
The unemployment guess of 10% would be a result imo but there seems to be high/medium earners being affected like pilots ,engineers, chefs etc which will be difficult for them to regain equivalent earning jobs unless their sectors pick back up!
It would be a result yes.For every 1 pilot, engineer, chef, etc, theres probably another 10 entry level job roles affected though. Even thinking of their airline industry - for every one pilot, how many supporting cabin staff, ground staff, baggage handling and airport staff will go too? Same in a restaurant, for every back end qualified chef, how many entry level cooking staff, waiters and serving staff are there?
And as has been said, as is usually the case in a recession, it tends to be those in the lower wage brackets affected most.
Deep Thought said:
jammy-git said:
Given that we're seeing a move to online vehicle purchasing, at least in the short term, could that not translate to dealerships looking, or needing to lay off more staff because a certain percentage of new car purchases won't be done via a dealership, or at least in the dealership itself?
Other than the salesman's time of maybe an hour or so in front of a customer, what are you saving there? Theres still people required to man the phones, answer emails, take pics and send them on, do short video presentations, engage with the customer, review offers, negotiate. Any cars sold during lockdown via online methods - and the salesmen can correct me if i'm wrong here - was done by a salesperson not an admin person.Then you've still the normal prep, handover and support requirement for the car anyway.
And to be frank, since customers have been able to visit showrooms again we haven’t conducted a single ‘online’ sale. A few online enquiries granted, but those customers have then visited the showroom and bought.
Butter Face said:
Deep Thought said:
jammy-git said:
Given that we're seeing a move to online vehicle purchasing, at least in the short term, could that not translate to dealerships looking, or needing to lay off more staff because a certain percentage of new car purchases won't be done via a dealership, or at least in the dealership itself?
Other than the salesman's time of maybe an hour or so in front of a customer, what are you saving there? Theres still people required to man the phones, answer emails, take pics and send them on, do short video presentations, engage with the customer, review offers, negotiate. Any cars sold during lockdown via online methods - and the salesmen can correct me if i'm wrong here - was done by a salesperson not an admin person.Then you've still the normal prep, handover and support requirement for the car anyway.
And to be frank, since customers have been able to visit showrooms again we haven’t conducted a single ‘online’ sale. A few online enquiries granted, but those customers have then visited the showroom and bought.
Speaking strictly about cars I’ve been discussing with friends family & work folk to see how they are intending on using cars in the future / number of cars etc.
Note this group have all been able to work from home and all continue to do so.
Also note cars are either PCP PCH or owned (outright or with a cheap bank loan).
Without question NONE are going to change their cars this year (not sure if any were planning to). One has a PCP ending in Sept it’s going to be handed back as they have 3 cars). A few have stated they simply do not see the point in two cars given WFH is a functioning setup and is likely to be the way they will mainly work in the future (as such sell one of the two cars they have).
Another who was on PCP and always changed cars ever 2/3/4 years deal dependant but loves their current car and due to costs have decided to take a bank loan and clear the PCP.
Basically no one wants to take on anymore debt and change in circumstance long term means having cash tied up in a depreciating asset is really wasteful.
We will likely change the SMax for a Galaxy maybe this year.
Note this group have all been able to work from home and all continue to do so.
Also note cars are either PCP PCH or owned (outright or with a cheap bank loan).
Without question NONE are going to change their cars this year (not sure if any were planning to). One has a PCP ending in Sept it’s going to be handed back as they have 3 cars). A few have stated they simply do not see the point in two cars given WFH is a functioning setup and is likely to be the way they will mainly work in the future (as such sell one of the two cars they have).
Another who was on PCP and always changed cars ever 2/3/4 years deal dependant but loves their current car and due to costs have decided to take a bank loan and clear the PCP.
Basically no one wants to take on anymore debt and change in circumstance long term means having cash tied up in a depreciating asset is really wasteful.
We will likely change the SMax for a Galaxy maybe this year.
Welshbeef said:
Speaking strictly about cars I’ve been discussing with friends family & work folk to see how they are intending on using cars in the future / number of cars etc.
Note this group have all been able to work from home and all continue to do so.
Also note cars are either PCP PCH or owned (outright or with a cheap bank loan).
Without question NONE are going to change their cars this year (not sure if any were planning to). One has a PCP ending in Sept it’s going to be handed back as they have 3 cars). A few have stated they simply do not see the point in two cars given WFH is a functioning setup and is likely to be the way they will mainly work in the future (as such sell one of the two cars they have).
Another who was on PCP and always changed cars ever 2/3/4 years deal dependant but loves their current car and due to costs have decided to take a bank loan and clear the PCP.
Basically no one wants to take on anymore debt and change in circumstance long term means having cash tied up in a depreciating asset is really wasteful.
We will likely change the SMax for a Galaxy maybe this year.
Without the question in bold answered the rest of your "analysis" is completely pointless.Note this group have all been able to work from home and all continue to do so.
Also note cars are either PCP PCH or owned (outright or with a cheap bank loan).
Without question NONE are going to change their cars this year (not sure if any were planning to). One has a PCP ending in Sept it’s going to be handed back as they have 3 cars). A few have stated they simply do not see the point in two cars given WFH is a functioning setup and is likely to be the way they will mainly work in the future (as such sell one of the two cars they have).
Another who was on PCP and always changed cars ever 2/3/4 years deal dependant but loves their current car and due to costs have decided to take a bank loan and clear the PCP.
Basically no one wants to take on anymore debt and change in circumstance long term means having cash tied up in a depreciating asset is really wasteful.
We will likely change the SMax for a Galaxy maybe this year.
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