Will Coronavirus hit used car prices? (Vol 2)

Will Coronavirus hit used car prices? (Vol 2)

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Discussion

Big Al.

Original Poster:

67,437 posts

235 months

Monday 21st December 2020
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HTP99

19,640 posts

117 months

Monday 21st December 2020
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In first, so far doesn't look like it!

Bigus

40 posts

25 months

Monday 21st December 2020
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In relation to car used car prices , there is also the small matter of 100,000 to 150,000 used cars that are exported to Republic of Ireland every year. From 1 st January 2021 , these cars are NOW subject to an extra 21% vat on arrival into the Republic, plus perhaps a tariff. ( vat is definite).

The panic to get cars to the republic before January and into dealer stock has definitely affected U.K. demand and prices lately , and conversely will depress demand from now on.

The bulk of these cars would be less than 5 years old and have reasonable CO2 outputs , as taxation on entry to the Republic, is based loosely on a sliding scale to CO2 output.

Last year a new Nox tax was introduced which effectively ended the importation of pre 2016 (dirty)diesels to the Republic , which may have had a minor affect on older diesel demand in the U.K.

I know 150,000 units is not huge in relation to the overall UK market . But it’s not insignificant either, particularly when it applies to a narrow band of that market.

The Rotrex Kid

26,784 posts

137 months

Monday 21st December 2020
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HTP99 said:
In first, so far doesn't look like it!
Nah, all gonna change Q2 next year mate.

Fast Bug

10,222 posts

138 months

Monday 21st December 2020
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The Rotrex Kid said:
HTP99 said:
In first, so far doesn't look like it!
Nah, all gonna change Q2 next year mate.
I'm going Q3, not going to say which year yet though. Still bounce back loans propping up the motor trade....

All I want to know is when can I buy a Porsche 964 for £15k like they used to be?

rotaryjam

295 posts

78 months

Monday 21st December 2020
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Its difficult to predict because to my mind there are two contradicting forces

- Pent up demand that can't fulfilled due to lockdowns and higher tiers restricting sales, increasing demand as restrictions ease
- Reduced demand due to the knock on economic impact of covid e.g. people losing their jobs

And two bonus factors:

- Move away from Petrol and especially Diesel towards boring electric cars
- Brexit

And lets not forget seasonality...

Furlough ends next March, likely also restrictions lifted due to increased vaccinations and summer reducing effect of the virus.

So moving in to Q3 2021 we'll start to see the true economic impact of covid unleashed due to no Furlough support once the virus is under control combined with seasonal decline in to the winter months.

I think we'll see the impact like so in order of worst to least affected:

Expensive new and boring diesels
Expensive new boring petrol cars
Cheap old boring diesels
Cheap old boring petrol
Electric cars
Expensive interesting petrol cars
Cheaper interesting petrol cars

I appreciate there are lots of gaps in the above but you get the idea.






Gman20

7,614 posts

123 months

Monday 21st December 2020
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Bigus said:
In relation to car used car prices , there is also the small matter of 100,000 to 150,000 used cars that are exported to Republic of Ireland every year. From 1 st January 2021 , these cars are NOW subject to an extra 21% vat on arrival into the Republic, plus perhaps a tariff. ( vat is definite).

The panic to get cars to the republic before January and into dealer stock has definitely affected U.K. demand and prices lately , and conversely will depress demand from now on.

The bulk of these cars would be less than 5 years old and have reasonable CO2 outputs , as taxation on entry to the Republic, is based loosely on a sliding scale to CO2 output.

Last year a new Nox tax was introduced which effectively ended the importation of pre 2016 (dirty)diesels to the Republic , which may have had a minor affect on older diesel demand in the U.K.

I know 150,000 units is not huge in relation to the overall UK market . But it’s not insignificant either, particularly when it applies to a narrow band of that market.
This is something I have been wondering about, those figures are quite surprising though, do you know if that is the net number, or is there a flow the other way that offsets some of that?

Bigus

40 posts

25 months

Tuesday 22nd December 2020
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Very little to nil flow from Republic back to U.K. unless it’s something very rare and very expensive or falls into the wrong annual road fund tax bracket (eg Evo x Mitsubishi is €2350 per year)

There was a big flow of vehicles to the U.K. after 2008, massive recession /Wipe out of irish economy ( much worse in Ireland than U.K. ) plus an oversupply of used Celtic tiger barges sold during the boom, that were too dear to run and tax.

Lots/Mostly Porsche Bentley’s Range Rovers, large SUV s and desirable classics made their way BACK to U.K. in 2009 to 2014, from the Republic. Then just as things bottomed out a new tax rebate became available after the irish government lost an EU court case. This restarted the export trend in latter years. Around 2012-2014 .Eg a 2008 Q7 could be bought in republic for about €6 k to 8keuro , be sold in U.K. for say £12k (€15k) and get an export refund on top of about €5 k .




FredFlacht

36 posts

17 months

Tuesday 22nd December 2020
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Fast Bug said:
I'm going Q3, not going to say which year yet though. Still bounce back loans propping up the motor trade....

All I want to know is when can I buy a Porsche 964 for £15k like they used to be?
Never. With zero CGT and few safe havens for people to put their cash, collectible cars are only going in one direction.

Fast Bug

10,222 posts

138 months

Tuesday 22nd December 2020
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FredFlacht said:
Fast Bug said:
I'm going Q3, not going to say which year yet though. Still bounce back loans propping up the motor trade....

All I want to know is when can I buy a Porsche 964 for £15k like they used to be?
Never. With zero CGT and few safe havens for people to put their cash, collectible cars are only going in one direction.
I am aware of that, I was being sarcastic...

Venisonpie

1,991 posts

59 months

Tuesday 22nd December 2020
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It looks like we're going to be locked down (up?) for a couple of months now meaning there will be cash piling high in many places itching for something to buy.

Come March or whenever restrictions are lifted I see a huge demand for everything big ticket - property, cars, holidays, boats etc.

Sadly it will be a further more divided country between the haves and the have nots but the reality is there will be tons of cash looking for a home.

greenarrow

2,792 posts

94 months

Tuesday 22nd December 2020
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Looking at the Used Car market just now, is it me, or does there appear to be more value in 3-4 year old cars than 7-10 year old ones?

Example, you can pick up a 3 year old current shape Fiesta ecoboost for around the £8K mark. A 7 year old one however will still be advertised for around the £4-£5K mark. The newer one seems better value to me than the 7 year old one with 60-70K mile on it.

Edited by greenarrow on Tuesday 22 December 10:01

Fuzzarr

166 posts

88 months

Tuesday 22nd December 2020
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greenarrow said:
Looking at the Used Car market just now, is it me, or does there appear to be more value in 3-4 year old cars than 7-10 year old ones?

Example, you can pick up a 3 year old current shape Fiesta ecoboost for around the £8K mark. A 7 year old one however will still be advertised for around the £4-£5K mark. The newer one seems better value to me than the 7 year old one with 60-70K mile on it.

Edited by greenarrow on Tuesday 22 December 10:01
Yeah I've seen the same with Octavias, 2017 cars are not a lot more than those from 2013/14. Unless it's the controversial facelift that is putting people off!

Vroomer

1,586 posts

157 months

Tuesday 22nd December 2020
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Big Al. said:
Is there a 500-page limit on topics?

The Rotrex Kid

26,784 posts

137 months

Tuesday 22nd December 2020
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Vroomer said:
Big Al. said:
Is there a 500-page limit on topics?

Deep Thought

31,082 posts

174 months

Tuesday 22nd December 2020
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Venisonpie said:
It looks like we're going to be locked down (up?) for a couple of months now meaning there will be cash piling high in many places itching for something to buy.

Come March or whenever restrictions are lifted I see a huge demand for everything big ticket - property, cars, holidays, boats etc.

Sadly it will be a further more divided country between the haves and the have nots but the reality is there will be tons of cash looking for a home.
I think this is likely going to be the case.

Those who have been building up cash / savings because no hols, no commuting expenses, not going out, no coffees every day, etc will, as per post previous lockdown want to spend it.

And yes, it will be a case of the haves and have nots, though after this carnage there will be fewer haves than after the last lockdown.

Justin Case

2,190 posts

111 months

Tuesday 22nd December 2020
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Stopped to look at a 10 reg Chevrolet Spark parked outside a house with a For Sale notice on it as I thought it might make a cheap winter daily. I thought it would be just a few hundred as it's not the most desirable of cars, but to my surprise it was up at £1600. I thought this was steep, but checking Autotrader when I got back it was actually quite reasonably priced compared to similar models. If this can happen at the bottom end of the motoring food chain a few days before Christmas, then it looks as if prices are still remarkably buoyant.

Auto810graphy

933 posts

69 months

Tuesday 22nd December 2020
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Fuzzarr said:
Yeah I've seen the same with Octavias, 2017 cars are not a lot more than those from 2013/14. Unless it's the controversial facelift that is putting people off!
This has been the case for a few years, there is no logic to it, even more so when you look at the additional mileage of older cars. We finance quite a few 2-3 year mainstream cars as the PCP payments are low due to good residuals.

Fusion777

617 posts

25 months

Tuesday 22nd December 2020
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Deep Thought said:
I think this is likely going to be the case.

Those who have been building up cash / savings because no hols, no commuting expenses, not going out, no coffees every day, etc will, as per post previous lockdown want to spend it.

And yes, it will be a case of the haves and have nots, though after this carnage there will be fewer haves than after the last lockdown.
Will these people not have just spent the money on other things though? Home/garden improvements, technology, furniture, so on and so on. Many people get through whatever cash they have available, we are not a nation of savers.

Vroomer

1,586 posts

157 months

Wednesday 23rd December 2020
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Big Al. said:
Is there a 500-page limit on topics?