Will Coronavirus hit used car prices? (Vol 2)

[jimPH]

There's a fair bit of speculation going on of course. There's a black GLB 35 up for 51500, with 1 owner which is more than mercedes are selling new. I don't know if he's paid too much for it or isn't checking mercedes prices. Its not even a rare colour combo, it's black on black.

Also, A45s are being advertised for more than a new one costs, I mean do people really want them that badly? They're nice cars, but it's not exactly a limited number sports car with a heritage.

[mrdanbartlett]

Deep Thought said:

IF it reduces at all, in any meaningful timeframe.

For example, back in Feb 20 if you're £25K in your pocket you could have had a choice of half a dozen M2s with sensible miles on them for sale across the country. Maybe you'd have needed to spend £26K+ to get a real nice one. Now they're starting at £30K with Approved Used cars starting at £32K.

I cant forsee any sudden drop in values. I think it will be an easing of values over time.

I think the best bet now for low risk is down the market. Get something older thats not going to be as affected and then sit it out.

I still feel if there is a dip in the economy then regardless of supply issues it will still have an effect of the car market. I think at somepoint we will see that, just unsure really when it might be.

[Deep Thought]

mrdanbartlett said:

I still feel if there is a dip in the economy then regardless of supply issues it will still have an effect of the car market. I think at somepoint we will see that, just unsure really when it might be.

Yup. Its a possibility.

And then, will it be a sudden drop (say 20% drop again in three months) or just an alignment over an extended timeframe (over several years)?

And thats a rethorical question rather than something any of us can answer...

Conversely, what if there isnt a dip in the economy, and it only recovers from here?

Edited by Deep Thought on Sunday 20th June 20:23

[Deep Thought]

jimPH said:

There's a fair bit of speculation going on of course. There's a black GLB 35 up for 51500, with 1 owner which is more than mercedes are selling new. I don't know if he's paid too much for it or isn't checking mercedes prices. Its not even a rare colour combo, it's black on black.

Also, A45s are being advertised for more than a new one costs, I mean do people really want them that badly? They're nice cars, but it's not exactly a limited number sports car with a heritage.

Whats the availability / lead time on a new A45S?

Is that becoming the issue?

[Auto810graphy]

Court_S said:

I think it’s starting to bite them a bit. According to people trying to order them on BabyBMW they haven’t been able to select certain options because of the chip shortages.

We are getting weekly updates from BMW about specification changes to factory orders. Every manufacturer seems to be suffering delays but at the same time many are increasing prices and cutting support terms.

As for these cars over list, I think there are a lot of people chancing their arms as they know there is no new stock available. Will be interesting to see how Porsches do as I keep hearing supply numbers will be a lot less this year.

[mrdanbartlett]

Deep Thought said:

Yup. Its a possibility.

And then, will it be a sudden drop (say 20% drop again in three months) or just an alignment over an extended timeframe (over several years)?

And thats a rethorical question rather than something any of us can answer...

Conversely, what if there isnt a dip in the economy, and it only recovers from here?

Edited by Deep Thought on Sunday 20th June 20:23

I think there will be a dip at somepoint, seems it's already recovered so cannot see it continuing - I feel personally that we haven't felt the kick yet of all the government borrowing, the low interest rates and end of furlough. Most airline share prices for example seem incredibly strong given they haven't even started flying that much yet, it feels artificial. Surely alot of companies are going to be reporting drops in profits come next april's end of tax year.

I think the huge money printing by the US will also have a global effect at somepoint, via hyperinflation but also some economy drop. All guesswork of course but I just cannot see this lasting forever, history tells us it never does.
I've heard Warren Buffet's investment company is sat in huge cash reserves ready to go if the market dips, i.e buy stuff when its cheap -not when the value isn't there.

[Deep Thought]

mrdanbartlett said:

I think there will be a dip at somepoint, seems it's already recovered so cannot see it continuing - I feel personally that we haven't felt the kick yet of all the government borrowing, the low interest rates and end of furlough. Most airline share prices for example seem incredibly strong given they haven't even started flying that much yet, it feels artificial. Surely alot of companies are going to be reporting drops in profits come next april's end of tax year.

I think the huge money printing by the US will also have a global effect at somepoint, via hyperinflation but also some economy drop. All guesswork of course but I just cannot see this lasting forever, history tells us it never does.
I've heard Warren Buffet's investment company is sat in huge cash reserves ready to go if the market dips, i.e buy stuff when its cheap -not when the value isn't there.

Re Warren Buffet, thats company stocks though which will move independently of inflation and car values in individual countries.

I think it would take a full on crash to see prices drop back sharply. Maybe that is ahead if us....

[mrdanbartlett]

Yeah and as you say it could be more of a slow decline. I've set myself a 'bite point' on my next car so will wait for that as I;ll keep it for 4-5 years so don't mind paying the price I have set. Just be a pain if that never gets reached I'm sure it will in time though.

[w00tman]

Well we bit the bullet today - test drove a bunch of stuff and settled on a X3 M40i.

Part ex'ing the wife's Hyundai i30N Performance. Bought in Feb 19 for £21k, sold today for £18k at 37k miles. Cost us nothing for the duration outside of changing the awful PZero tyres and servicing.

[Anonymous-poster]

Fast Bug said:

Anonymous-poster said:

New is the way to go at the moment IF you can get one!
The M135i at 2.9% with £4K discount seems good value compared to secondhand imo.

Which seems awful value compared to the usual new BMW deals pre supply issues

Times have changed, please keep up at the back!

[av185]

mrdanbartlett said:

Deep Thought said:

Yup. Its a possibility.

And then, will it be a sudden drop (say 20% drop again in three months) or just an alignment over an extended timeframe (over several years)?

And thats a rethorical question rather than something any of us can answer...

Conversely, what if there isnt a dip in the economy, and it only recovers from here?

Edited by Deep Thought on Sunday 20th June 20:23

I think there will be a dip at somepoint, seems it's already recovered so cannot see it continuing - I feel personally that we haven't felt the kick yet of all the government borrowing, the low interest rates and end of furlough. Most airline share prices for example seem incredibly strong given they haven't even started flying that much yet, it feels artificial. Surely alot of companies are going to be reporting drops in profits come next april's end of tax year.

I think the huge money printing by the US will also have a global effect at somepoint, via hyperinflation but also some economy drop. All guesswork of course but I just cannot see this lasting forever, history tells us it never does.
I've heard Warren Buffet's investment company is sat in huge cash reserves ready to go if the market dips, i.e buy stuff when its cheap -not when the value isn't there.

Thing is there is that much pent up demand from almost all sectors just e.g. look at retail how this has bounced back and furlough will probably be extended anyway which actually isn't as onerous as many think furthermore much of government debt is sourced at very cheap rates from Europe. As DT rightly says WB sitting on some cash is totally detached from car prices and also to an extent stock markets as well especially in the UK which is a unique market.

If you want a reliable indicator of the confidence in the UK economy take at look at UK smaller company fund performance these are broadly the areas where the smart money is currently being invested showing stellar returns also the FTSE is one of the cheapest markets atm and is predicted to be at 8500 by early next year which I would agree with.

Re travel/airline stocks many are actually underpriced atm e.g Tui clearly because this year has been largely written off for foreign holidays for most folk thus giving the UK a further huge boost to the economy as people holiday and spend at home or on holiday in the UK.

There is significantly more upside than downside atm in terms of the growth of the UK economy and this also applies for the medium and medium long terms for used car prices which as previously mentioned cheap used cars could well be a distant memory for some considerable time to come.

[jimPH]

Auto810graphy said:

Court_S said:

I think it’s starting to bite them a bit. According to people trying to order them on BabyBMW they haven’t been able to select certain options because of the chip shortages.

We are getting weekly updates from BMW about specification changes to factory orders. Every manufacturer seems to be suffering delays but at the same time many are increasing prices and cutting support terms.

As for these cars over list, I think there are a lot of people chancing their arms as they know there is no new stock available. Will be interesting to see how Porsches do as I keep hearing supply numbers will be a lot less this year.

Porsche have sold for overs when they were at full capacity, with no production constraints. Hardly any surprise they’re up when there's a shortage of supply.

People tried it with other marques thinking they'll go the same way but didn't, i.e. M2. Maybe there's a shortage of A45's I don't know, but it still doesn't strike me as a car that people lust over, or anyone had pinned to their wall, unlike Porsche. A35's seem to be well up too, but there doesn't seem to be any shortage of them available, there's 241 available on AT, I don't think I've ever seen that many!

So yes, I think traders are certainly taking advantage and why not if people are willing to pay. I personally think the correction will be disjointed, so certain marques/models will see a sharp correction, some may remain high or decline slowly. I think that will come in 12 months time when people look to trade in and traders will be hitting them with values as if the blip never happened.

Traders are in for a good few Christmas's...

[Fast Bug]

jimPH said:

Traders are in for a good few Christmas's...

You say that, but the price to buy them at has been pushed up as well. You can't sell empty forecourt spaces sadly, by the same regard you don't want to be left holding the baby if/when prices drop back to "normal" levels

[cidered77]

This crazy boom has got me ordering a new car nearly a year earlier than planned.

P/X'd a 2016 Disco Sport for a new Defender 90 at the weekend (steel wheels; obviously..). Offered 4.5k more than when i first got a quote from their site around xmas time. The car being replaced despite being one of the least reliable JLR products ever made has been absolutely rock solid good as gold for now 3 years and 40k miles.... which surely means it's due a Massive Issue sometime soon, and it's 2 years out of warranty. Man maths say go for it now - we've got 4 months now for this market to hold up to make a man maths driven decision an actual maths one!

[Teebs]

cidered77 said:

This crazy boom has got me ordering a new car nearly a year earlier than planned.

P/X'd a 2016 Disco Sport for a new Defender 90 at the weekend (steel wheels; obviously..). Offered 4.5k more than when i first got a quote from their site around xmas time. The car being replaced despite being one of the least reliable JLR products ever made has been absolutely rock solid good as gold for now 3 years and 40k miles.... which surely means it's due a Massive Issue sometime soon, and it's 2 years out of warranty. Man maths say go for it now - we've got 4 months now for this market to hold up to make a man maths driven decision an actual maths one!

Presume the dealer is holding the PX quote until the new car arrives? Brave move by them but a good deal for you!

Must be tough to estimate what the market will be like in 4 months..

[cidered77]

Teebs said:

cidered77 said:

This crazy boom has got me ordering a new car nearly a year earlier than planned.

P/X'd a 2016 Disco Sport for a new Defender 90 at the weekend (steel wheels; obviously..). Offered 4.5k more than when i first got a quote from their site around xmas time. The car being replaced despite being one of the least reliable JLR products ever made has been absolutely rock solid good as gold for now 3 years and 40k miles.... which surely means it's due a Massive Issue sometime soon, and it's 2 years out of warranty. Man maths say go for it now - we've got 4 months now for this market to hold up to make a man maths driven decision an actual maths one!

Presume the dealer is holding the PX quote until the new car arrives? Brave move by them but a good deal for you!

Must be tough to estimate what the market will be like in 4 months..

Nah - they're not, they re-value in the month the new car is due to be delivered. But on the basis that A: 4 months is sooner than 12 months, and there's a much stronger probability that values will be more normal over a long time period, and B: i really like the car, and it's man-maths not real maths, then it was enough of a thing now to pull the trigger...

[jimPH]

Fast Bug said:

jimPH said:

Traders are in for a good few Christmas's...

You say that, but the price to buy them at has been pushed up as well. You can't sell empty forecourt spaces sadly, by the same regard you don't want to be left holding the baby if/when prices drop back to "normal" levels

The fact they have empty forecourts means Xmas is already good. You have a point though, it's still 6 months away, so anything could happen by then.

[Teebs]

cidered77 said:

Nah - they're not, they re-value in the month the new car is due to be delivered. But on the basis that A: 4 months is sooner than 12 months, and there's a much stronger probability that values will be more normal over a long time period, and B: i really like the car, and it's man-maths not real maths, then it was enough of a thing now to pull the trigger...

OK, cheers - good to know.

[Pugland53]

Deep Thought said:

Our 2019 M140i has just broken £25K on WBAC! Amazing for a car we gave £28,200 new in Mar 2019.

21-Nov-19 £20,500
20-Mar-20 £12,270
10-Apr-20 Declined to offer
10-May-20 Declined to offer
08-Jun-20 £18,000
22-Jun-20 £19,000
14-Jul-20 £19,500
29-Jul-20 £21,000
2-Aug-20 £21,500
19-Aug-20 £21,680
4-Sep-20 £23,000
14-Sep-20 £23,000
30-Sep-20 £22,000
7-Oct-20 £21,570
23-Oct-20 £21,710
5-Nov-20 Declined to offer
19-Nov-20 £20,790
15-Dec-20 £21,340
18-Jan-21 £20,210
24-Feb-21 £20,410
06-Mar-21 £19,445
18-Apr-21 £21,405
08-May-21 £23,240
18-May-21 £23,700
27-May-21 £24,500
01-Jun-21 £24,710
19-Jun-21 £25,210

WBAC offered £26600 for our March 2019 M140i which is pretty much what the basic car cost new. The dealer matched it as a p/x as they were desperate for stock so we ordered a new M135i, which itself was discounted by £4700.

[Deep Thought]

jimPH said:

Fast Bug said:

jimPH said:

Traders are in for a good few Christmas's...

You say that, but the price to buy them at has been pushed up as well. You can't sell empty forecourt spaces sadly, by the same regard you don't want to be left holding the baby if/when prices drop back to "normal" levels

The fact they have empty forecourts means Xmas is already good. You have a point though, it's still 6 months away, so anything could happen by then.

Empty forecourts at the minute i think means they cant get stock to sell, as opposed to they've sold their stock quicker can it can be replenished.