Will Coronavirus hit used car prices? (Vol 2)
Discussion
nickfrog said:
DonkeyApple said:
In all likelihood we are starting to enter a buyer's market for some nice cars over the next 24 months. New or used.
For some nice cars, yes I agree. Overall though I am not sure we will see a slump on used or new. It has been comprehensively debated on the other thread. Uncertainty and divided views on the synthesis. 
nickfrog said:
DonkeyApple said:
In all likelihood we are starting to enter a buyer's market for some nice cars over the next 24 months. New or used.
For some nice cars, yes I agree. Overall though I am not sure we will see a slump on used or new. It has been comprehensively debated on the other thread. Uncertainty and divided views on the synthesis. Lower discretionary spending power always equals lower discretionary spend. In the U.K. the big ticket recipient for discretionary borrowing and spending is the car. It is simply inconceivable that the car market won't be impacted.
Inventory build up is death, the stock will be shifted at any cost. That will hit used values which in turn will further break the PCP amd HO models which rely on the manufacturers being able to manipulate used values at three years out. That then further reduces potential customer numbers etc.
Post 2011 the U.K. car market has become the big consumer debt area as that debt demand was closed off from housing and we all watched it flood into cars. Nowhere else could you borrow your annual income and pay funding rates as if you were solvent etc.
Now what I would say is that the optics at the moment remain really geographic. I don't think, for example, London residents and workers have started to see any of this yet. We've had a year of property rises, pay rises, everyone getting back into the office 2022 has looked good but it has masked the under current. That under current can be seen in the Boardrooms where people have been planning to cull the WFH salary bills to cover revenue slowdowns. Why pay the person who has moved out to the middle of nowhere his £200k London salary when you've now got them by the balls and they'll take £100k. But then why pay them anything when you can get someone overseas to WFH for half as much again. The top salaries are going to get nailed as so many have moved away from needing a London salary. The middle salaries are going to get nailed because they can be replaced by overseas workers.
In the SE, rents have been going up and there are huge mortgages that need to be covered.
When you go out beyond Z3 you can see that they've been absolutely mental with their shopping. Everything inside the houses is brand new and on finance, everything on the driveway is not just brand new but premium and all that borrowing freed up the cash to take repeated extravagant holidays that no one on that pay grade would have traditionally taken.
The consumer bubble in the SE looks unbroken at the moment but things are really just lagging by 6-12 months and it's hard to envisage London employers matching pay rises to the rise in the cost of debt servicing?
Venisonpie said:
An interesting read. I wonder if there's more money about than that though. I live in a West London bubble where 2nd homes are still all the rage (not for me sadly) and therefore not representative at all. However for the last 11 days I've been in rural Suffolk and Devon where there seems to be no shortage of cash being sloshed about in antique places that aren't and all manor of food and drink emporiums.
My view that I've voiced on the other 2nd hand car thread is we're about to really see the unequal distribution of wealth in society where the haves are perhaps more plentiful than realised but the gap to the have nots is massive, just recently disguised by the things you describe.
I think the poor supply is relevant as I still believe there is plenty of genuine cash about albeit held by a minority proportion of the population.
I genuinely hope car prices do crash as I'm one of those cash buyers who doesn't need a car but wants one.
Second homes for Londoners is an interesting area. When I was younger these second homes weren't leveraged in any way. Most were actually inheritances and not worth much but fun places to decamp to. Then when we bought them they were still affordable and we bought them using anomalous bonus payments we'd been awarded. The second home market re Londoners was never leveraged. My view that I've voiced on the other 2nd hand car thread is we're about to really see the unequal distribution of wealth in society where the haves are perhaps more plentiful than realised but the gap to the have nots is massive, just recently disguised by the things you describe.
I think the poor supply is relevant as I still believe there is plenty of genuine cash about albeit held by a minority proportion of the population.
I genuinely hope car prices do crash as I'm one of those cash buyers who doesn't need a car but wants one.
Then came 97 and the deregulation of lending and the evolution to a consumer society and the big shop started. Second homes seemed to become all the Range and in fact pretty much a 'must have'. Because the old Kensington families had estates out in the country more people started acquiring weekend places.
By about ten years ago it had gone insane. Clubs were opening up at these destinations and Londoners were remortgaging their London flats to raise the deposit to get a country property which then was also on a mortgage! So a lot of second homes are the weak points in a self created pyramid of debt of people who'd never traditionally be exposed to debt like that.
Places like Wells and around there are riddled, as are key villages in the Cotswolds. I can only assume it's the same in key locations around the Downs?
Unlike back in the 80a the London second home market is a pyramid of debt as opposed to a rock of wealth.
There's a village out here that became media and banking trendy due to the arrival of a couple of businesses and a couple of people and what followed has been a decade of Londoners grabbing any cottage they can at any price. The locals all think it's been cash purchases like it always was instead of 100% leveraged deals using a London flat to collateralise not just all of that but also the required car to reach that property and the three legally mandated holidays a year to required locations.
Lots of folk have been putting their second homes on the game to try and stem the flow of losses. There are almost entire villages that are up for rent. And to me that's been a real warning sign over the years. Why would you rent out your second home unless you needed the money? It's like renting your sailing boat, it's done to share what is a burden not a flippant expense for fun or pleasure.
In short, there are people who even have their red trousers on credit and some of them will be seen rolling on the pavement of the Bayswater Road while bailiffs are trying to take their trousers back.
DonkeyApple said:
Second homes for Londoners is an interesting area. When I was younger these second homes weren't leveraged in any way. Most were actually inheritances and not worth much but fun places to decamp to. Then when we bought them they were still affordable and we bought them using anomalous bonus payments we'd been awarded. The second home market re Londoners was never leveraged.
Then came 97 and the deregulation of lending and the evolution to a consumer society and the big shop started. Second homes seemed to become all the Range and in fact pretty much a 'must have'. Because the old Kensington families had estates out in the country more people started acquiring weekend places.
By about ten years ago it had gone insane. Clubs were opening up at these destinations and Londoners were remortgaging their London flats to raise the deposit to get a country property which then was also on a mortgage! So a lot of second homes are the weak points in a self created pyramid of debt of people who'd never traditionally be exposed to debt like that.
Places like Wells and around there are riddled, as are key villages in the Cotswolds. I can only assume it's the same in key locations around the Downs?
Unlike back in the 80a the London second home market is a pyramid of debt as opposed to a rock of wealth.
There's a village out here that became media and banking trendy due to the arrival of a couple of businesses and a couple of people and what followed has been a decade of Londoners grabbing any cottage they can at any price. The locals all think it's been cash purchases like it always was instead of 100% leveraged deals using a London flat to collateralise not just all of that but also the required car to reach that property and the three legally mandated holidays a year to required locations.
Lots of folk have been putting their second homes on the game to try and stem the flow of losses. There are almost entire villages that are up for rent. And to me that's been a real warning sign over the years. Why would you rent out your second home unless you needed the money? It's like renting your sailing boat, it's done to share what is a burden not a flippant expense for fun or pleasure.
In short, there are people who even have their red trousers on credit and some of them will be seen rolling on the pavement of the Bayswater Road while bailiffs are trying to take their trousers back.
Not sure about the Downs, I always thought they were 1st homes owned by old money but have no real insight. Then came 97 and the deregulation of lending and the evolution to a consumer society and the big shop started. Second homes seemed to become all the Range and in fact pretty much a 'must have'. Because the old Kensington families had estates out in the country more people started acquiring weekend places.
By about ten years ago it had gone insane. Clubs were opening up at these destinations and Londoners were remortgaging their London flats to raise the deposit to get a country property which then was also on a mortgage! So a lot of second homes are the weak points in a self created pyramid of debt of people who'd never traditionally be exposed to debt like that.
Places like Wells and around there are riddled, as are key villages in the Cotswolds. I can only assume it's the same in key locations around the Downs?
Unlike back in the 80a the London second home market is a pyramid of debt as opposed to a rock of wealth.
There's a village out here that became media and banking trendy due to the arrival of a couple of businesses and a couple of people and what followed has been a decade of Londoners grabbing any cottage they can at any price. The locals all think it's been cash purchases like it always was instead of 100% leveraged deals using a London flat to collateralise not just all of that but also the required car to reach that property and the three legally mandated holidays a year to required locations.
Lots of folk have been putting their second homes on the game to try and stem the flow of losses. There are almost entire villages that are up for rent. And to me that's been a real warning sign over the years. Why would you rent out your second home unless you needed the money? It's like renting your sailing boat, it's done to share what is a burden not a flippant expense for fun or pleasure.
In short, there are people who even have their red trousers on credit and some of them will be seen rolling on the pavement of the Bayswater Road while bailiffs are trying to take their trousers back.
My peer group all fall into the old lot in that they either inherited or bought property outright (most of it abroad) and are retired or about to be.
It hadn't occurred to me people had financed themselves to the glass house for Cotswolds cottages, sounds like an earthquake is about to rumble.
Thankfully I'll never have to worry about repossessed red trousers!
yellowbentines said:
The 'comprehensive debate' on the other thread has mostly been the same 5 or 10 voices repeatedly shouting the same thing at each other for many months now, without any willingness to consider an alternative viewpoint - really don't think it confirms anything either way
Sure, there have been some very confident and very loud voices about the future. The headwinds are very easy to spot. The resiliience of the ship's hull on the other hand is far more tricky to assess. Hence my conclusion that I don't know where used car prices will go. Venisonpie said:
DonkeyApple said:
Second homes for Londoners is an interesting area. When I was younger these second homes weren't leveraged in any way. Most were actually inheritances and not worth much but fun places to decamp to. Then when we bought them they were still affordable and we bought them using anomalous bonus payments we'd been awarded. The second home market re Londoners was never leveraged.
Then came 97 and the deregulation of lending and the evolution to a consumer society and the big shop started. Second homes seemed to become all the Range and in fact pretty much a 'must have'. Because the old Kensington families had estates out in the country more people started acquiring weekend places.
By about ten years ago it had gone insane. Clubs were opening up at these destinations and Londoners were remortgaging their London flats to raise the deposit to get a country property which then was also on a mortgage! So a lot of second homes are the weak points in a self created pyramid of debt of people who'd never traditionally be exposed to debt like that.
Places like Wells and around there are riddled, as are key villages in the Cotswolds. I can only assume it's the same in key locations around the Downs?
Unlike back in the 80a the London second home market is a pyramid of debt as opposed to a rock of wealth.
There's a village out here that became media and banking trendy due to the arrival of a couple of businesses and a couple of people and what followed has been a decade of Londoners grabbing any cottage they can at any price. The locals all think it's been cash purchases like it always was instead of 100% leveraged deals using a London flat to collateralise not just all of that but also the required car to reach that property and the three legally mandated holidays a year to required locations.
Lots of folk have been putting their second homes on the game to try and stem the flow of losses. There are almost entire villages that are up for rent. And to me that's been a real warning sign over the years. Why would you rent out your second home unless you needed the money? It's like renting your sailing boat, it's done to share what is a burden not a flippant expense for fun or pleasure.
In short, there are people who even have their red trousers on credit and some of them will be seen rolling on the pavement of the Bayswater Road while bailiffs are trying to take their trousers back.
Not sure about the Downs, I always thought they were 1st homes owned by old money but have no real insight. Then came 97 and the deregulation of lending and the evolution to a consumer society and the big shop started. Second homes seemed to become all the Range and in fact pretty much a 'must have'. Because the old Kensington families had estates out in the country more people started acquiring weekend places.
By about ten years ago it had gone insane. Clubs were opening up at these destinations and Londoners were remortgaging their London flats to raise the deposit to get a country property which then was also on a mortgage! So a lot of second homes are the weak points in a self created pyramid of debt of people who'd never traditionally be exposed to debt like that.
Places like Wells and around there are riddled, as are key villages in the Cotswolds. I can only assume it's the same in key locations around the Downs?
Unlike back in the 80a the London second home market is a pyramid of debt as opposed to a rock of wealth.
There's a village out here that became media and banking trendy due to the arrival of a couple of businesses and a couple of people and what followed has been a decade of Londoners grabbing any cottage they can at any price. The locals all think it's been cash purchases like it always was instead of 100% leveraged deals using a London flat to collateralise not just all of that but also the required car to reach that property and the three legally mandated holidays a year to required locations.
Lots of folk have been putting their second homes on the game to try and stem the flow of losses. There are almost entire villages that are up for rent. And to me that's been a real warning sign over the years. Why would you rent out your second home unless you needed the money? It's like renting your sailing boat, it's done to share what is a burden not a flippant expense for fun or pleasure.
In short, there are people who even have their red trousers on credit and some of them will be seen rolling on the pavement of the Bayswater Road while bailiffs are trying to take their trousers back.
My peer group all fall into the old lot in that they either inherited or bought property outright (most of it abroad) and are retired or about to be.
It hadn't occurred to me people had financed themselves to the glass house for Cotswolds cottages, sounds like an earthquake is about to rumble.
Thankfully I'll never have to worry about repossessed red trousers!
Venisonpie said:
Not sure about the Downs, I always thought they were 1st homes owned by old money but have no real insight.
My peer group all fall into the old lot in that they either inherited or bought property outright (most of it abroad) and are retired or about to be.
It hadn't occurred to me people had financed themselves to the glass house for Cotswolds cottages, sounds like an earthquake is about to rumble.
Thankfully I'll never have to worry about repossessed red trousers!
It's interesting because in the one hand there are vast sums of money around and lots of cash buyers but in the same social demographic you have people with the same income but zero unleveraged purchasing power. My peer group all fall into the old lot in that they either inherited or bought property outright (most of it abroad) and are retired or about to be.
It hadn't occurred to me people had financed themselves to the glass house for Cotswolds cottages, sounds like an earthquake is about to rumble.
Thankfully I'll never have to worry about repossessed red trousers!
There are some really big changes from the norm that we will see work their way out over the next few years.
I can almost image the love of SUV's waning as fewer people can afford the extra expense so do what so often seems to happen which is to not just migrate to something more affordable but then also back that with anti rhetoric. We saw this with diesels where some of the real converts became real antis etc.
Who knows really but money has changed so lots of things that need money have to.
DonkeyApple said:
When you go out beyond Z3 you can see that they've been absolutely mental with their shopping. Everything inside the houses is brand new and on finance, everything on the driveway is not just brand new but premium and all that borrowing freed up the cash to take repeated extravagant holidays that no one on that pay grade would have traditionally taken.
As one of those poor benighted souls living beyond Zone 3, can I just clarify where the spending boundaries are, in order to be classed as “absolutely mental”? My cars were bought lightly used, not new. But my family does enjoy a nice holiday now and again, if our central London overlords allow it!spreadsheet monkey said:
As one of those poor benighted souls living beyond Zone 3, can I just clarify where the spending boundaries are, in order to be classed as “absolutely mental”? My cars were bought lightly used, not new. But my family does enjoy a nice holiday now and again, if our central London overlords allow it!
If you live on a lane or road where no one has painted the top of some railings gold or placed a stone animal on a wall the. You will be in one of the areas less impacted by the 'Life in the Dreamhouse' trend. But generally the close you get to the M25 from the circulars the more you can see the rather substantial evolution of the last 20 years and where there is most likely to be visible change in car stock over the next few years. Interesting read this morning, and quite thought provoking
Now being a northerner holiday homes in the south west wouldn’t be my area of knowledge but I do know north wales and the Llyn peninsula where like down south prices have gone insane
My aunt had a house in abersoch back in the 70s/80s and it was a cheap area .. now people are paying over half a million for a mobile home there!
It is just crazy
Now being a northerner holiday homes in the south west wouldn’t be my area of knowledge but I do know north wales and the Llyn peninsula where like down south prices have gone insane
My aunt had a house in abersoch back in the 70s/80s and it was a cheap area .. now people are paying over half a million for a mobile home there!
It is just crazy
Earthdweller said:
Interesting read this morning, and quite thought provoking
Now being a northerner holiday homes in the south west wouldn’t be my area of knowledge but I do know north wales and the Llyn peninsula where like down south prices have gone insane
My aunt had a house in abersoch back in the 70s/80s and it was a cheap area .. now people are paying over half a million for a mobile home there!
It is just crazy
That's levelling up that is. Now being a northerner holiday homes in the south west wouldn’t be my area of knowledge but I do know north wales and the Llyn peninsula where like down south prices have gone insane
My aunt had a house in abersoch back in the 70s/80s and it was a cheap area .. now people are paying over half a million for a mobile home there!
It is just crazy
The second home thing will always be contentious. Arguably the property types split into two crude groups, those that could function as homes for locals and those that couldn't.
In Wales the locals sold off all the latter as quickly as they could just like everyone else around the U.K. Properties that were unfit for modern living and cost a fortune to maintain and operate. Whether old workman's cottages or manor houses, they simply cost far too much to heat and repair for local incomes. Now that these have been done up by people with larger incomes from towns many miles away they want them back but they'd soon rot away again as the local economies don't offer the employment levels required to upkeep such properties. Then there is the second type which are perfectly normal homes that can easily be maintained by local workers and it's hard to argue that it has been a good thing for outside capital to have bid them up to levels that may be beyond local means.
However, in many instances that hasn't been second home activity but retirement activity as pensioners seek to leave their working town and migrate back from whence they originated or just to somewhere nice in the countryside or by the sea to enjoy retirement. It has been their abnormal number and abnormal wealth that has hit these areas hardest while much of the second home money has focussed on the crappy old and inefficient housing that looks prettiest but is a massive ballache to run.
Lots of spill over either way but for locals of these areas the true driver has been retirees and they aren't leveraged or going anywhere and more will arrive. Capitulating second home owners giving up crappy old stone fisherman's hovels, big old draughty houses or the leaky Victorian tat that was left to rot in almost every Victorian town and village in a quiet area a bit too far from any heavy industry, isn't going to help the locals and worse if any were dumb enough to ignore their grandparents and parents warning to not buy them they could really screw themselves.
But that's a bit of a deviation from used car values.
Been keeping an eye on total cars for sale on Autotrader and also had a number of cars in my watchlist. Over the last week or so the number of cars for sale has dropped by nearly 20,000 after climbing for week after week, many of the watched cars have sold/disappeared and you can see many of the supercar/sportscars dealers posting of big pick up in sales on social media. Perhaps things picking back up as we head towards spring?
I was seeing a different trend actually BlackR8, but I am looking at 2 specific cars (350Z and S2000), and in the price range I am looking at they don't seem to be selling. I will start tracking the number of them for sale from yesterday until the day I buy one, they don't seem to be shifting at all, only a couple sold.
For reference the search will be Manual, Non-Cat, sub £11k, so I will not monitor the collectors grade low mileage examples.
For reference the search will be Manual, Non-Cat, sub £11k, so I will not monitor the collectors grade low mileage examples.
Nefos said:
I was seeing a different trend actually BlackR8, but I am looking at 2 specific cars (350Z and S2000), and in the price range I am looking at they don't seem to be selling. I will start tracking the number of them for sale from yesterday until the day I buy one, they don't seem to be shifting at all, only a couple sold.
For reference the search will be Manual, Non-Cat, sub £11k, so I will not monitor the collectors grade low mileage examples.
No a great deal of science in the way I have been looking at things. Just been observing general indicators like total cars for sale, those disappearing from sale in my watch list etc. I am looking at cars in the supercar bracket though so perhaps it's different for different markets. A drop of circa. 20k cars in the space of only a week or so, one would assume that there is more than just supercars selling through....but you know what they say about assumptions For reference the search will be Manual, Non-Cat, sub £11k, so I will not monitor the collectors grade low mileage examples.
BlackR8 said:
No a great deal of science in the way I have been looking at things. Just been observing general indicators like total cars for sale, those disappearing from sale in my watch list etc. I am looking at cars in the supercar bracket though so perhaps it's different for different markets. A drop of circa. 20k cars in the space of only a week or so, one would assume that there is more than just supercars selling through....but you know what they say about assumptions
That is the beauty of the forum, everyone can monitor their own small segment, then we can compare notes, so we can get a fuller picture of the current situation. On a personal level it is really good to know that the sub £10k enthusiast car market is not overheated still, so I do not need to buy a car right away, and I can save up for a couple more monthsVroomer said:
Interesting to note that as of today, the Porsche site is advertising 36 new cars available for immediate delivery at list price.
Perhaps the supply issues are going away?
Interesting development.Perhaps the supply issues are going away?
It is now 42!!!
Had a quick look at a boxter..heavily laden with stupid expensive options, so will be a hard sell at £80k.
911hope said:
Vroomer said:
Interesting to note that as of today, the Porsche site is advertising 36 new cars available for immediate delivery at list price.
Perhaps the supply issues are going away?
Interesting development.Perhaps the supply issues are going away?
It is now 42!!!
Had a quick look at a boxter..heavily laden with stupid expensive options, so will be a hard sell at £80k.
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