Will Coronavirus hit used car prices? (Vol 2)

Will Coronavirus hit used car prices? (Vol 2)

Author
Discussion

Fusion777

953 posts

29 months

Wednesday 21st September
quotequote all
The i have a headline today suggesting that interest rates are likely to go up another 2% over the next 4 months, with 0.75% coming tomorrow. To counter, there will be a reversal of the NI increase soon and there’s talk of more tax cuts in future such as a 1p income tax drop.

These won’t counter increased mortgage costs though for many people.

Niponeoff

221 posts

8 months

Wednesday 21st September
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Seems to be a few youtube clips of the auto loan problem in the US. not sure how much of a problem it is.

So many defaults that the banks are left with a ton of seized cars, but they cant sell them quickly otherwise they will flood the market and reduce the value of the very cars they now own. Bit of a conundrum? seems to be driven by a lot of younger folk taking out loans they cant afford, which isn't all that surprising to me.

I'm not sure how true it all is, but it has been widely reported.

Seems to me that the loan were given based on a much higher value of the car, which now depreciates, far lower than the loan value - person defaults nd hands the car back, bank is stuck with debt from someone who cant pay.. Guess it all mounts up and has been massively exacerbated by the recent price increases of cars, resulting in bigger loans and more defaults.

AlexNJ89

1,131 posts

60 months

Wednesday 21st September
quotequote all
Niponeoff said:
Seems to be a few youtube clips of the auto loan problem in the US. not sure how much of a problem it is.

So many defaults that the banks are left with a ton of seized cars, but they cant sell them quickly otherwise they will flood the market and reduce the value of the very cars they now own. Bit of a conundrum? seems to be driven by a lot of younger folk taking out loans they cant afford, which isn't all that surprising to me.

I'm not sure how true it all is, but it has been widely reported.
.
I don't buy that, banks are selfish and competitive and they'd happily crash a market for their own profits.

It just takes one of their competitors to decide to pull the trigger and sell them all and their own stock crashes.

They'd be racing to be the first to sell off their stock.

vikingaero

7,496 posts

150 months

Wednesday 21st September
quotequote all
AlexNJ89 said:
Niponeoff said:
Seems to be a few youtube clips of the auto loan problem in the US. not sure how much of a problem it is.

So many defaults that the banks are left with a ton of seized cars, but they cant sell them quickly otherwise they will flood the market and reduce the value of the very cars they now own. Bit of a conundrum? seems to be driven by a lot of younger folk taking out loans they cant afford, which isn't all that surprising to me.

I'm not sure how true it all is, but it has been widely reported.
.
I don't buy that, banks are selfish and competitive and they'd happily crash a market for their own profits.

It just takes one of their competitors to decide to pull the trigger and sell them all and their own stock crashes.

They'd be racing to be the first to sell off their stock.
I agree. Banks and finance houses are not in the business of holding and insuring car stock. They'll want out ASAP, even if the cars sell for pennies as they can offset losses and play financial trickery bks on the balance sheets.

PBCD

621 posts

119 months

Wednesday 21st September
quotequote all
AlexNJ89 said:
I don't buy that, banks are selfish and competitive and they'd happily crash a market for their own profits.

It just takes one of their competitors to decide to pull the trigger and sell them all and their own stock crashes.

They'd be racing to be the first to sell off their stock.
Wasn't the above the entire premise of the film 'Margin Call'?

Pommy

12,988 posts

197 months

Wednesday 21st September
quotequote all
AlexNJ89 said:
Niponeoff said:
Seems to be a few youtube clips of the auto loan problem in the US. not sure how much of a problem it is.

So many defaults that the banks are left with a ton of seized cars, but they cant sell them quickly otherwise they will flood the market and reduce the value of the very cars they now own. Bit of a conundrum? seems to be driven by a lot of younger folk taking out loans they cant afford, which isn't all that surprising to me.

I'm not sure how true it all is, but it has been widely reported.
.
I don't buy that, banks are selfish and competitive and they'd happily crash a market for their own profits.

It just takes one of their competitors to decide to pull the trigger and sell them all and their own stock crashes.

They'd be racing to be the first to sell off their stock.
Not quite, because in doing so they then crash their remaining assets they have liens over, which in turn ends up with people just giving them back (certainly in the US) as it's not economically beneficial to keep it and exacerbates the issue.

Most financial institutions will try and keep the possession, and debt, in play with the borrower for as long as possible whilst there's a chance they'll still get paid.



Fast Bug

10,461 posts

142 months

Wednesday 21st September
quotequote all
So the dream of cheap cars from the auction... I've just seen a post from a trader elsewhere that's spent 3 months trying to return a car he bought from BCA with the following;

Starting/cutting out problem. Loses all power including the power steering

Bad remap and DPF has been removed

Tape on the dash covering up engine management light, glow pluf and collision assist

None of the above are mentioned on the report, which is why we as a group don't buy from auction. These kind of faults aren't unusual, and it's not uncommon for them to not be listed when it goes through auction.

Auctions really aren't as great as people think. If you'd bought that car and not managed to return it (most traders end upthreatening to not buy again), it would cost youmore than buying it retail from a dealer with some kind of protection.

sam303

422 posts

176 months

Wednesday 21st September
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flibbage0 said:
I do. Jaguar XFR advertised for £16k on Autotrader, maximum trade in value I can find is £9450 on Motorway.

XKR for sale £21000, trade in value is £14000.

Yes I understand that the trade in value is not the same as the market price but the difference is huge when it only used to be a small amount.

For example I was tracking an XKR with the speed pack, 105k miles and it was up for around £17k. Trade in value was £15-16k, this was around September-October 2021.

I have seen an SLK55 AMG for sale on Autotrader, based in Golders Green, lovely example. Earlier this year it was for sale around £18k, now it's £16k.

Anyone who thinks V8 sports cars aren't dropping value are quite frankly in denial.
Fibbage0, you are right. I know this because I am one such seller of an XFR, with a wide gap between my asking price and the trade in price hehe

In my defence, it's fabulous and I don't really want to sell it.



chickenbarns

66 posts

1 month

Wednesday 21st September
quotequote all
WBAC is not a good barometer of used car price. There is a looming ban on petrol will only raise the price of interesting cars next year. Take a look at price of interesting cars they are already climbing.

-CB

johnnyBv8

2,261 posts

172 months

Wednesday 21st September
quotequote all
chickenbarns said:
WBAC is not a good barometer of used car price. There is a looming ban on petrol will only raise the price of interesting cars next year. Take a look at price of interesting cars they are already climbing.

-CB
Funny, AV185 used to relentlessly make the same assertion

Seraph14

19 posts

Wednesday 21st September
quotequote all
Fast Bug said:
So the dream of cheap cars from the auction... I've just seen a post from a trader elsewhere that's spent 3 months trying to return a car he bought from BCA with the following;

Starting/cutting out problem. Loses all power including the power steering

Bad remap and DPF has been removed

Tape on the dash covering up engine management light, glow pluf and collision assist

None of the above are mentioned on the report, which is why we as a group don't buy from auction. These kind of faults aren't unusual, and it's not uncommon for them to not be listed when it goes through auction.

Auctions really aren't as great as people think. If you'd bought that car and not managed to return it (most traders end upthreatening to not buy again), it would cost youmore than buying it retail from a dealer with some kind of protection.
I'm aware of this. However, when you buy from a dealer (at least the sort of cars I'm looking for in the up to £8k range) you are often effectively buying from the auction indirectly anyway. I often see cars come up for sale at dealers which use the auction photos first, so it's evident that the dealer has just bought the car online at auction without even seeing it in person himself. When it gets delivered, the photos get updated.

I don't believe dealers typically check these cars over much, they just clean them up (if they even do that) and sell it on, pocketing their fat profit. If you have any problems they usually don't want to know. Consumer law is very weak, and dealers know that very well. The consumer has plenty of rights on paper, but enforcing them is another matter, if the dealer doesn't play ball.

Pommy

12,988 posts

197 months

Wednesday 21st September
quotequote all
johnnyBv8 said:
chickenbarns said:
WBAC is not a good barometer of used car price. There is a looming ban on petrol will only raise the price of interesting cars next year. Take a look at price of interesting cars they are already climbing.

-CB
Funny, AV185 used to relentlessly make the same assertion
Did he also pointlessly leave his signature at the end of every post?

-P

chickenbarns

66 posts

1 month

Wednesday 21st September
quotequote all
johnnyBv8 said:
chickenbarns said:
WBAC is not a good barometer of used car price. There is a looming ban on petrol will only raise the price of interesting cars next year. Take a look at price of interesting cars they are already climbing.

-CB
Funny, AV185 used to relentlessly make the same assertion
which is?

-CB

ghost83

5,108 posts

171 months

Wednesday 21st September
quotequote all
chickenbarns said:
WBAC is not a good barometer of used car price. There is a looming ban on petrol will only raise the price of interesting cars next year. Take a look at price of interesting cars they are already climbing.

-CB
Aren’t we 13yrs off that?

2ono

425 posts

88 months

Wednesday 21st September
quotequote all
Took my 911 in for its first MOT today, it would seem there is no real downturn for used prices at the moment as I was offered £105k by the dealer, OPC, to buy it from me today, he said they would go a bit higher if I purchased another car from them, paid £110k for it in Feb 2020, car was 4 months old at the time.

chickenbarns

66 posts

1 month

Wednesday 21st September
quotequote all
ghost83 said:
chickenbarns said:
WBAC is not a good barometer of used car price. There is a looming ban on petrol will only raise the price of interesting cars next year. Take a look at price of interesting cars they are already climbing.

-CB
Aren’t we 13yrs off that?
8 years AFAIK. Truth is it will happen much sooner and push prices higher as we can see and manufacturers churn out more bog standard cars.

-CB

nickfrog

17,673 posts

198 months

Wednesday 21st September
quotequote all
2ono said:
Took my 911 in for its first MOT today, it would seem there is no real downturn for used prices at the moment as I was offered £105k by the dealer, OPC, to buy it from me today, he said they would go a bit higher if I purchased another car from them, paid £110k for it in Feb 2020, car was 4 months old at the time.
Around £160 depreciation a month at worst?

Talk of VFM!!

Well done.

pquinn

4,340 posts

27 months

Wednesday 21st September
quotequote all
nickfrog said:
2ono said:
Took my 911 in for its first MOT today, it would seem there is no real downturn for used prices at the moment as I was offered £105k by the dealer, OPC, to buy it from me today, he said they would go a bit higher if I purchased another car from them, paid £110k for it in Feb 2020, car was 4 months old at the time.
Around £160 depreciation a month at worst?

Talk of VFM!!

Well done.
It's not bad, but what's the current price for a new equivalent replacement?

chickenbarns

66 posts

1 month

Wednesday 21st September
quotequote all
pquinn said:
nickfrog said:
2ono said:
Took my 911 in for its first MOT today, it would seem there is no real downturn for used prices at the moment as I was offered £105k by the dealer, OPC, to buy it from me today, he said they would go a bit higher if I purchased another car from them, paid £110k for it in Feb 2020, car was 4 months old at the time.
Around £160 depreciation a month at worst?

Talk of VFM!!

Well done.
It's not bad, but what's the current price for a new equivalent replacement?
from £108000.

-CB