Will Coronavirus hit used car prices? (Vol 2)

[av185]

swisstoni said:

You would expect bank savings interest rates to eventually rise in a high interest economy, reducing the panic to turn cash into something else asap.

You would but they probably won't this time.

[e-honda]

av185 said:

You are correct the 70s were very different.

For a start there weren't the huge supply chain issues currently affecting the whole car industry.

There was non stop industrial action and rolling blackouts

[nickfrog]

Teebs said:

@AV185 - what car(s) would be a shrewd move to purchase and hedge against inflation then? Let's say 1 car for 10k / 20 / 30 / 40.

Thanks

In the spirit of only mentioning cars that I already own, if I didn't have one already I would buy a manual OG M2 for £30k for that purpose (and to use as a car of course ). But only if I had used up all other fiscally rewarding wrappers like Pension or ISA allowance. Same for up to 10k, a Clio 200.

[ghost83]

av185 said:

You are correct the 70s were very different.

For a start there weren't the huge supply chain issues currently affecting the whole car industry.

But supply chain issues aren’t going to last forever! At some point the supply chain issues will be non existent whether it takes 6 months to catch up or 5yrs!

Quite clearly the cost of living is going up and it’s only going to get worse for the time being until inflation comes under control.
At some point demand will drop ppl don’t have a magical money tree! And for s lot of ppl cars aren’t the be all and end all! Surviving will be!

I agree the richest ppl won’t be massively affected as such but the middle classes and lower classes of society will be

[Earthdweller]

av185 said:

Earthdweller said:

av185 said:

Quite a coincidence this was just posted on another thread:



Doesn't take a genius to work out what is the shrewder move:

Sit on cash losing say 10% a year

Upgrade to a new/nearly new or more expensive car with all the benefits associated with this AND with the potential to come out with a profit or even break even.

Selective quoting is a wonderful thing isn’t it ?

Because on the same thread the same person also said ..

the thread was about the price of classic cars falling and cars not making reserves at auction and titled “market cooling”

The post was in direct reply to dmahons post incorrectly claiming no one bought cars as assets in tbe 1970s.

The thread is currently running and is merely a discussion about classic car prices with no real evidence other than anectodal or any accurate conclusions as to whether prices are rising cooling or staying the same.

But YOU are quoting a single post as a fact to back up YOUR argument that buying cars is a money maker without posting or referencing the context of the thread or linking to it so others can read it and draw their own inference from the thread .. and your done that several times

So in one post you claim … fact

In another you claim … anecdote

You do post some interesting stuff on here but then completely undermine yourself by contradictory posting which just makes you look foolish

So dmahon’s post was incorrect in your view yet ( as referenced above ) Lowdrags wasn’t, yet you are reading two ( as you state ) anecdotal posts and claiming one as rubbish and one as fact

When you have no idea of the veracity of either


Perhaps just reference the thread rather than pick a single post, here’s the thread

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Earthdweller on Monday 23 May 12:22

[carparkno1]

av185 said:

carparkno1 said:

av185 said:

Macron said:

av185 said:

Also whilst I and many others on this thread are clearly too young to remember much of what happened in the 1970s apparantly inflation hit 26% and holding cash was a very expensive pastime understandably. Consequently many bought cars which was one of the safest places for your money.

My driving licence was issued in 196-

No-one in the 70's had money to do this. NO ONE. No one was buying cars. Wherever you got that from it's complete bks. You didn't have enough money for food.

Sound familiar?

There is currently an odd situation creating a boom. There have been many odd situations creating many odd booms.

Not once has it not ended with a bust.

There is always room for a first. Although people won't be arriving at the food banks in their ever-increasingly valuable Bentayaga's this Christmas.

Quite a coincidence this was just posted on another thread:



Doesn't take a genius to work out what is the shrewder move:

Sit on cash losing say 10% a year

Upgrade to a new/nearly new or more expensive car with all the benefits associated with this AND with the potential to come out with a profit or even break even.

So have 20k savings sat at the bank, being very stagnant but very safe, or splurge 400 a month into a 3 series on the gamble that in a couple of years time it's still worth the same in a post covid environment?

If your idea of 'safe' is a minimum of 10 to 12% erosion of your hard earned capital by rampant inflation then sit back do nothing and crack on but you will be alot poorer alot quicker than you think.

So I should put it in a Renault Arkana for a better return?

[greggy50]

Valuation has gone up on my Polestar again.

£45,230 now for a car that was £47,995 22k miles and 15 months ago.

£185pm in depreciation certainly isn't bad at all!

[Earthdweller]

carparkno1 said:

av185 said:

carparkno1 said:

av185 said:

Macron said:

av185 said:

Also whilst I and many others on this thread are clearly too young to remember much of what happened in the 1970s apparantly inflation hit 26% and holding cash was a very expensive pastime understandably. Consequently many bought cars which was one of the safest places for your money.

My driving licence was issued in 196-

No-one in the 70's had money to do this. NO ONE. No one was buying cars. Wherever you got that from it's complete bks. You didn't have enough money for food.

Sound familiar?

There is currently an odd situation creating a boom. There have been many odd situations creating many odd booms.

Not once has it not ended with a bust.

There is always room for a first. Although people won't be arriving at the food banks in their ever-increasingly valuable Bentayaga's this Christmas.

Quite a coincidence this was just posted on another thread:



Doesn't take a genius to work out what is the shrewder move:

Sit on cash losing say 10% a year

Upgrade to a new/nearly new or more expensive car with all the benefits associated with this AND with the potential to come out with a profit or even break even.

So have 20k savings sat at the bank, being very stagnant but very safe, or splurge 400 a month into a 3 series on the gamble that in a couple of years time it's still worth the same in a post covid environment?

If your idea of 'safe' is a minimum of 10 to 12% erosion of your hard earned capital by rampant inflation then sit back do nothing and crack on but you will be alot poorer alot quicker than you think.

So I should put it in a Renault Arkana for a better return?

If you put 20k into a classic or older car .. maybe, who knows

Spending that 20k on a new car @ 400pcm into a pcp is 19200 and would seem to be a great way to lose the lot or most of it, even with strong residual values

Meanwhile if you left the 20k in the bank it could easily be worth 23k in 4 years

Neither seem a great return, but more likely to get any return from the bank

If you bought a £20k new/nearly new car today for cash you’d need it to be worth around £28k in 2026 to beat inflation and get your money back

Edited by Earthdweller on Monday 23 May 12:42

[av185]

Teebs said:

carparkno1 said:

So have 20k savings sat at the bank, being very stagnant but very safe, or splurge 400 a month into a 3 series on the gamble that in a couple of years time it's still worth the same in a post covid environment?

No, you've got this all wrong. You need one of his 16k Vauxhall Astras. Put the other 4k into crypto.

You forgot to mention Forex.

Incidentally its a pity you didn't throw some money into an Astra 18 months back when you would have only made a paltry 55% return on your capital.

[av185]

Fusion777 said:

Teebs said:

@AV185 - what car(s) would be a shrewd move to purchase and hedge against inflation then? Let's say 1 car for 10k / 20 / 30 / 40.

Thanks

Interested in hearing this, too.

New or used?

I will probably waive my usual 20% fee for sage investment advice btw......

[carparkno1]

av185 said:

Teebs said:

carparkno1 said:

So have 20k savings sat at the bank, being very stagnant but very safe, or splurge 400 a month into a 3 series on the gamble that in a couple of years time it's still worth the same in a post covid environment?

No, you've got this all wrong. You need one of his 16k Vauxhall Astras. Put the other 4k into crypto.

You forgot to mention Forex.

Incidentally its a pity you didn't throw some money into an Astra 18 months back when you would have only made a paltry 55% return on your capital.

I did the opposite, sold my 440i and went to one car and saved circa £500 a month. My point is that you're acting as if Astras will continue this way. They won't.

[Teebs]

carparkno1 said:

I did the opposite, sold my 440i and went to one car and saved circa 500 a month. My point is that you're acting as if Astras will continue this way. They won't.

It's easy to be cocky in hindsight, truth is, no-one knew what covid would do to the car business in terms of suppy & demand.

[e-honda]

av185 said:

If your idea of 'safe' is a minimum of 10 to 12% -1% to 3.5% erosion of your hard earned capital by "rampant" inflation then sit back do nothing and crack on but you will be alot poorer alot quicker than you think.

Ftfy based on Boe projection and alternative scenario projection for the next 12 months

[Earthdweller]

av185 said:

You forgot to mention Forex.

Incidentally its a pity you didn't throw some money into an Astra 18 months back when you would have only made a paltry 55% return on your capital.

No you wouldn’t

If you’d bought a nearly new year old Astra it would have cost you £11k or so in 2020 for a 2018/9 car

That car is now 3/4 years old and a quick look at auto trader shows 3 year old Astras from around £10.5k retail

So you would have made no money on it

If you’d bought a new one for £23k it would now be retailing for £15-16k

So in both cases you would have lost money and would still have to find more money to replace them

For you to earn 55% return your 3 year old Astra would have to return you £17k and your now 18 month old one £35000 … i

Fantasy, pure fantasy




There is absolutely no way on earth

[av185]

carparkno1 said:

av185 said:

Teebs said:

carparkno1 said:

So have 20k savings sat at the bank, being very stagnant but very safe, or splurge 400 a month into a 3 series on the gamble that in a couple of years time it's still worth the same in a post covid environment?

No, you've got this all wrong. You need one of his 16k Vauxhall Astras. Put the other 4k into crypto.

You forgot to mention Forex.

Incidentally its a pity you didn't throw some money into an Astra 18 months back when you would have only made a paltry 55% return on your capital.

I did the opposite, sold my 440i and went to one car and saved circa 500 a month. My point is that you're acting as if Astras will continue this way. They won't.

I haven't suggested for one minute that (used) Astras will continue any way at all. But thats not to suggest they won't be a good used buy for someone looking to buy a reasonable and reliable 2/3 year old car up to say £15k because they will be. Not everyone likes the new model especially at the inflated price and with the smaller 3 cylinder engines so used models will hold their value as well if not better than other used comparable cars there is clearly more upside especially with Ford halting orders of both Focus and Fiestas due to supply chain issues.

[carparkno1]

Teebs said:

carparkno1 said:

I did the opposite, sold my 440i and went to one car and saved circa 500 a month. My point is that you're acting as if Astras will continue this way. They won't.

It's easy to be cocky in hindsight, truth is, no-one knew what covid would do to the car business in terms of suppy & demand.

I'm not being cocky, if I had held on five or six months I'd have sold it for a few grand more. You're also correct that nobody knew what the impact of covid etc would do to car prices. What's grinding my gears is this continual position that it can only continue, coupled with very selective editing and presentation of "facts".

[Teebs]

carparkno1 said:

I'm not being cocky, if I had held on five or six months I'd have sold it for a few grand more. You're also correct that nobody knew what the impact of covid etc would do to car prices. What's grinding my gears is this continual position that it can only continue, coupled with very selective editing and presentation of "facts".

Apologies, it was poorly quoted. My comment was aimed at AV185.

[carparkno1]

I don't have any real position here. Ultimately I've driven the family car and can continue to. I was looking at nearly new Leon Cupras but I've decided to take a step back. Until some of these major financial headwinds change its just risky dumping money into a hot hatch that is a want rather than a need.

[carparkno1]

Teebs said:

carparkno1 said:

I'm not being cocky, if I had held on five or six months I'd have sold it for a few grand more. You're also correct that nobody knew what the impact of covid etc would do to car prices. What's grinding my gears is this continual position that it can only continue, coupled with very selective editing and presentation of "facts".

Apologies, it was poorly quoted. My comment was aimed at AV185.

Haha no worries!

[Superflow]

av185 said:

Yep this makes sense and I've been saying exactly the same throughout the thread. The days of huge initial new car depreciation in the UK could well now be a distant memory.

Also whilst I and many others on this thread are clearly too young to remember much of what happened in the 1970s apparantly inflation hit 26% and holding cash was a very expensive pastime understandably. Consequently many bought cars which was one of the safest places for your money.

Okay thankfully we are extremely unlikely to return to those extreme levels of inflation but with many asset classes looking expensive and perhaps increasingly less upside in equity markets depending on your risk appetite then throwing money into a car is actually looking like a smarter move for many especially bearing in mind the rapidly rising prices of new cars and more inevitable price rises to come at all price points. Throw a minimum of 10% inflation into the mix and car purchasing looks even more attractive.

I’m afraid I’m way ahead of you old chap as early this morning I took delivery of 36 high spec Astra’s in mostly black and gold ,decided to cash up some bitcoin and go for it!

I took the precaution of calling the few neighbours last night as I didn’t want them waking up thinking Arnold Clark had moved in!.