Will Coronavirus hit used car prices? (Vol 2)

Will Coronavirus hit used car prices? (Vol 2)

Author
Discussion

av185

18,514 posts

128 months

Wednesday 18th May 2022
quotequote all
Venisonpie said:
Superflow said:

As they’ve been on for months it’s more likely they can’t drop them as they’ll be selling at a loss I mean if I went in and looked at a car that’s been up for 2/3 months and wouldn’t move on price I’d just laugh and leave,just sell it and move on.

But why? The market may not drop in the way some are suggesting.

Big engined out of date stuff I think will tank at some point but otherwise the lack of supply will hold the market away from a crash. Interest rates are still ludicrously low and there's still plenty of cash about, the current inflation is only going to impact some people and not all.
Quite and the crucial factor will be if that dealer sitting on that particular stock will be able to replace it at a much lower price if he lets it go. In many cases apart from the obvious sectors it will not be possible atm so the buyer will not gain anything by trying to find a comparable cheaper car elsewhere.

ghost83

5,478 posts

191 months

Wednesday 18th May 2022
quotequote all
av185 said:

You seriously think manufacturers are going to start slashing list prices after many have continually raised them over the past 12 months the most recent being up to 30 % merely in one rise alone the other week. I have a few new cars on order at various price points mainstream medium and relatively expensive and expect a minimum of at least two price rises before delivery.

You are conveniently forgetting the sc shortage backlog and componentry supply issues and huge price rises. Margin will continue to dominate over volume across many manufacturers and for obvious reasons. Whilst demand for new cars will tend to reduce clearly due to the economic constraints approaching this really is a non event for manufacturers chasing margin over volume as they will have fewer cars to sell but at higher prices. Their huge profit rises seen recently will continue because of this strategy. Demand will still exceed supply for the most part and many buyers forced away from the new car market will simply buy used instead thus supporting used values.

New car supply will broadly continue to be restricted well into next year.

Edited by av185 on Wednesday 18th May 13:21
I think they will if they market starts to dry up into 2023 they want to sell cars! I admit atm it ain’t gonna happen but with the economic contraints that will be hitting the average man in the street pretty hard something will have to happen!

carparkno1

1,432 posts

159 months

Wednesday 18th May 2022
quotequote all
Inflation at 9%

Brutal

Edited by carparkno1 on Wednesday 18th May 16:24

griffter

3,986 posts

256 months

Wednesday 18th May 2022
quotequote all
Interesting (to me at least) that Cazoo are now only guaranteeing valuations for 7 days (down from 10) and WBAC for 4 days (down from 7?).

Fusion777

2,232 posts

49 months

Wednesday 18th May 2022
quotequote all
No way are sales and prices going to hold up at 9% inflation (and we may not be near the peak).

av185

18,514 posts

128 months

Wednesday 18th May 2022
quotequote all
And yet new car prices continue to rise with virtually no discounting on list or finance. Manufacturers wouldn't be raising them if they thought for one minute they would have to discount them again because they will have fewer cars to shift.

Edited by av185 on Wednesday 18th May 18:11

nickfrog

21,183 posts

218 months

Wednesday 18th May 2022
quotequote all
Fusion777 said:
No way are sales and prices going to hold up at 9% inflation (and we may not be near the peak).
Difficult to say. It's still down to basic supply/demand economics. New car prices may well also go up 9% a year, or more. Which might have an effect on used.

Or we might simply see used cars start depreciating a bit more again, but difficult to say if it will be at the same rate as pre Covid rates. I think it will be slower.

And from what point? We might well see those 2 past years worth of depreciation never crystallise again.

e-honda

8,912 posts

147 months

Wednesday 18th May 2022
quotequote all
av185 said:
And yet new car prices continue to rise with virtually no discounting on list or finance. Manufacturers wouldn't be raising them if they thought for one minute they would have to discount them again because they will have fewer cars to shift.

Edited by av185 on Wednesday 18th May 18:11
It's all in your head
Minis latest prices are very much outliers
Just look where ons have put new car inflation, it is tracking at or below overall inflation.



Edited by e-honda on Wednesday 18th May 18:37

nickfrog

21,183 posts

218 months

Wednesday 18th May 2022
quotequote all
e-honda said:
It's all in your head
Minis latest prices are very much outliers
Just look where ons have put new car inflation, it is tracking at or below overall inflation.

That's presumably based on list. Not transaction prices. Dramatically reduced discounts might tell a different story. I suspect it might double that inflation figure, at least.

e-honda

8,912 posts

147 months

Wednesday 18th May 2022
quotequote all
nickfrog said:

That's presumably based on list. Not transaction prices. Dramatically reduced discounts might tell a different story. I suspect it might double that inflation figure, at least.
Its not just based on list, they send people out to get real prices, they know what sort of retailers do and do not offer discounts and ask for a realistic prices from those sort of retailers. It relies on good faith and sellers are going to tend to be a bit optimistic so when those discounts to complete disappear then there may be a certain amount of unrecorded inflation but not to that extent.

MaxFromage

1,890 posts

132 months

Wednesday 18th May 2022
quotequote all
Venisonpie said:

But why? The market may not drop in the way some are suggesting.
I understand why some think it might not happen given the unique set of circumstances, but markets depend on confidence. Confidence is disappearing fast and no amount of new car restrictions will stop price drops IMO.

I was speaking to one of the main guys at a large insolvency firm today. His view is things will look very interesting towards the end of the year frown

As I mentioned previously on this thread, quite a few successful clients are now gearing up to buy assets 'when they drop', like they have many times before.



Fast Bug

11,707 posts

162 months

Wednesday 18th May 2022
quotequote all
If prices are going to plummet, will I be able to buy a Porsche 964 for £20k? Still kicking myself for missing that boat

MaxFromage

1,890 posts

132 months

Wednesday 18th May 2022
quotequote all
I think you might need a time machine for that.

Fast Bug

11,707 posts

162 months

Wednesday 18th May 2022
quotequote all
So no cheap Countach's either then?

stevemcs

8,672 posts

94 months

Wednesday 18th May 2022
quotequote all
Id take a Ford RS of some description

Venisonpie

3,281 posts

83 months

Wednesday 18th May 2022
quotequote all
Fast Bug said:
If prices are going to plummet, will I be able to buy a Porsche 964 for 20k? Still kicking myself for missing that boat
You and me both. I looked at a 52000 mile guards red c2 coupe manual at £17k and bought a TVR Tuscan instead back in 2010. Duh!

ghost83

5,478 posts

191 months

Wednesday 18th May 2022
quotequote all
Who knows what will happen!

I nearly bought a f355 at 35k back in 2010/2011


Nobody knows how bad this crap is gonna get abs how far things will go if at all

Venisonpie

3,281 posts

83 months

Wednesday 18th May 2022
quotequote all
MaxFromage said:

I understand why some think it might not happen given the unique set of circumstances, but markets depend on confidence. Confidence is disappearing fast and no amount of new car restrictions will stop price drops IMO.

I was speaking to one of the main guys at a large insolvency firm today. His view is things will look very interesting towards the end of the year frown

As I mentioned previously on this thread, quite a few successful clients are now gearing up to buy assets 'when they drop', like they have many times before.


Yeah, I agree about confidence. However unemployment is at an all time low and there is still a lot of cash for the limited stock available.

Bizarrely having recently had my car written off and a payout almost equal to it's new invoice cost I'd love the market to crash. I'm not convinced it will though.

Fast Bug

11,707 posts

162 months

Wednesday 18th May 2022
quotequote all
Venisonpie said:
Fast Bug said:
If prices are going to plummet, will I be able to buy a Porsche 964 for 20k? Still kicking myself for missing that boat

You and me both. I looked at a 52000 mile guards red c2 coupe manual at 17k and bought a TVR Tuscan instead back in 2010. Duh!
If it makes you feel better, a friend of mine turned down a 964 RS for sub £30k as he really needed rear seats for his son. I don't think he's ever forgiven his son laugh

Backtobasics

1,182 posts

184 months

Wednesday 18th May 2022
quotequote all
Seán Kemple, managing director at Close Brothers Motor Finance, said: “Inflation continues to rise and cause headaches across the UK, not least for the motor industry.
“With the cost of living soaring, and fears of bad debt increasing, consumers are being attacked from all angles. Used car prices remain high a – trend which is changing the priorities of prospective buyers.”