Secondhand car price crash?
Discussion
RayDonovan said:
I work in food and the combination of pandemic, war and energy prices have been the catalyst that some (not all) companies needed to start ramping prices. There's been a race to the bottom in food for a long time now and they are trying to reverse this, quickly!
Own-label and big brands are the worse culprits in all of this, look at Heinz
Heinz Ketchup 910g - £3.99 in Tesco
Tesco own label 890g - £1.25
Guarantee that Tesco will be making a higher % margin on their own label SKU too.
Inflation headlines give the cover for increasing prices.. profiteering?Own-label and big brands are the worse culprits in all of this, look at Heinz
Heinz Ketchup 910g - £3.99 in Tesco
Tesco own label 890g - £1.25
Guarantee that Tesco will be making a higher % margin on their own label SKU too.
It isn't just the brand's to blame. The big retailers will have strong control of their buy prices.
Saw a £9:50 jar of Nescafé the other day. It can be had for £5 if you go elsewhere.
Theoldguard said:
The news rounds this morning talking about companies profiteering
To me the word profiteering conveys a sense of illegality.Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
Morrisons was the worst for this, I could not believe the prices of regular shopping items when I went there.
Sure enough a few weeks later I saw in the news they were not doing so well and started cutting prices.
So I think we'll see that in food retail at least, they won't get away with taking it too far as competitiors will take advantage.
Personally I shop at Tesco and whilst the prices have noticeably increased, it's not to the insane levels of Morrisons for example
Sure enough a few weeks later I saw in the news they were not doing so well and started cutting prices.
So I think we'll see that in food retail at least, they won't get away with taking it too far as competitiors will take advantage.
Personally I shop at Tesco and whilst the prices have noticeably increased, it's not to the insane levels of Morrisons for example
nickfrog said:
To me the word profiteering conveys a sense of illegality.
Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
I really wish this was said more.Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
If people think a company is greedy then don't buy their products.
But don't buy their products then moan as if they're stealing your money.
nickfrog said:
To me the word profiteering conveys a sense of illegality.
Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
Profiteering can be taking advantage of a situation and making profit well in excess of what you would in more normal times, like the energy companies have to make profit the excesses are now being taxed as a windfall. Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
You say shop elsewhere but this is the problem, they are all following each other, one store reduces they all reduce, then as one increases prices they all do.
10% on a tin of beans is alot less than 10% on a new £40k motor.
Competition authorities exist for a reason too though. They’re usually toothless but they’re a recognition that when a small number of suppliers can dictate the market price that’s not healthy.
Some free marketeers tend not to be very consistent when it comes to recognising the problems with monopolies but that’s a whole separate subject.
In car terms I wonder how elastic car prices are. There’s so much obfuscation around it like finance incentives or leasing deals that I’ve long held the opinion that the manufacturers are very good at squeezing their margin but there’s a limit to how far they can get away with it set by sufficient competition. But whether that competition is moving in the right direction I’d have more doubts about.
Some free marketeers tend not to be very consistent when it comes to recognising the problems with monopolies but that’s a whole separate subject.
In car terms I wonder how elastic car prices are. There’s so much obfuscation around it like finance incentives or leasing deals that I’ve long held the opinion that the manufacturers are very good at squeezing their margin but there’s a limit to how far they can get away with it set by sufficient competition. But whether that competition is moving in the right direction I’d have more doubts about.
Theoldguard said:
Profiteering can be taking advantage of a situation and making profit well in excess of what you would in more normal times, like the energy companies have to make profit the excesses are now being taxed as a windfall.
You say shop elsewhere but this is the problem, they are all following each other, one store reduces they all reduce, then as one increases prices they all do.
10% on a tin of beans is alot less than 10% on a new £40k motor.
Welcome to an open market economy in a fair competition environment. Can you think of a good alternative?You say shop elsewhere but this is the problem, they are all following each other, one store reduces they all reduce, then as one increases prices they all do.
10% on a tin of beans is alot less than 10% on a new £40k motor.
nickfrog said:
Welcome to an open market economy in a fair competition environment. Can you think of a good alternative?
And an alternative where you can actually fail. Like Silicon Valley bank and Credit Suisse.Make bad decisions and you get punished. Make good decisions and you're rewarded.
I do agree about having anti-monopoly laws though.
RayDonovan said:
I work in food and the combination of pandemic, war and energy prices have been the catalyst that some (not all) companies needed to start ramping prices. There's been a race to the bottom in food for a long time now and they are trying to reverse this, quickly!
Own-label and big brands are the worse culprits in all of this, look at Heinz
Heinz Ketchup 910g - £3.99 in Tesco
Tesco own label 890g - £1.25
Guarantee that Tesco will be making a higher % margin on their own label SKU too.
They're playing a dangerous game, people are creatures of habit, and some are being forced to change their habits, problem is, they're unlikely to change back.Own-label and big brands are the worse culprits in all of this, look at Heinz
Heinz Ketchup 910g - £3.99 in Tesco
Tesco own label 890g - £1.25
Guarantee that Tesco will be making a higher % margin on their own label SKU too.
If you've always bought Heinz, but are now forced to buy Tesco own brand you'll get used to Tesco own brand, the chances of people switching back to Heinz if the price drops to £2.99 is slim.
nickfrog said:
Theoldguard said:
Profiteering can be taking advantage of a situation and making profit well in excess of what you would in more normal times, like the energy companies have to make profit the excesses are now being taxed as a windfall.
You say shop elsewhere but this is the problem, they are all following each other, one store reduces they all reduce, then as one increases prices they all do.
10% on a tin of beans is alot less than 10% on a new £40k motor.
Welcome to an open market economy in a fair competition environment. Can you think of a good alternative?You say shop elsewhere but this is the problem, they are all following each other, one store reduces they all reduce, then as one increases prices they all do.
10% on a tin of beans is alot less than 10% on a new £40k motor.
I’m not picking a fight, just noting the open market economy is not quite that open from field to plate.
Farming’s an industry that has arguably got lazy on subsidies or an industry being screwed into selling below cost depending on your perspective. That’s government interference. How many would be profitable without subvention? Does that make subvention bad? No. Does it mean it’s not quite as black and white as it being a free market, yes. The supermarkets profit from that subvention.
A good alternative would have farmers making a living and us all paying more with the supermarkets maybe losing some margin. But that’s not going to happen when the big four can dominate so much of the market. Aldi and Lidl may have been disrupters but they don’t compete in the same space as the huge range of products (not counting tomatoes lol) that the larger vendors do.
Free markets are complicated and tinkering can create unintended consequences. But the basic principle of not putting too much power in too few hands is one I generally agree with.
Greenmantle said:
Tomanybikes said:
cheesejunkie said:
Tomanybikes said:
Happy days for savers though.
Nope, banks have long given up on offering good savings rates. I’m not aware of an inflation beating cash savings account. I wouldn’t mind knowing one.It hasn’t been happy days for savers for a long time.
Investors and speculators have probably done better. Which is what I think you meant
.3.6% instant access is not to be sniffed at.
(1) where is there anything available with no risk at half the 10% - I suggest zero
(2) 3.6% on an instant access VARIABLE account with max deposit of £150 per month max at £5000 = £15 per month = waste of time.
Edited by Tomanybikes on Friday 24th March 17:13
Tomanybikes said:
Greenmantle said:
Tomanybikes said:
cheesejunkie said:
Tomanybikes said:
Happy days for savers though.
Nope, banks have long given up on offering good savings rates. I’m not aware of an inflation beating cash savings account. I wouldn’t mind knowing one.It hasn’t been happy days for savers for a long time.
Investors and speculators have probably done better. Which is what I think you meant
.3.6% instant access is not to be sniffed at.
(1) where is there anything available with no risk at half the 10% - I suggest zero
(2) 3.6% on an instant access VARIABLE account with max deposit of £150 per month max at £5000 = £15 per month = waste of time.
Edited by Tomanybikes on Friday 24th March 17:13
I have some money in cash ISA and also fixed bonds at 4% which is okay. Money earmarked for a car purchase is currently in easy access at 2.7% but I need it there so I can pounce on a bargain if something comes up.
Everything I see and read suggests prices of used cars won't fall anytime soon. With a lot of used cars I don't think we're even at the point of natural depreciation as several I'm looking at have gone up in the last month.
ChrisH72 said:
If you fix for 6/12/24 months then it's not easy access is it?
I have some money in cash ISA and also fixed bonds at 4% which is okay. Money earmarked for a car purchase is currently in easy access at 2.7% but I need it there so I can pounce on a bargain if something comes up.
Everything I see and read suggests prices of used cars won't fall anytime soon. With a lot of used cars I don't think we're even at the point of natural depreciation as several I'm looking at have gone up in the last month.
Suuurely with interest rates rising, cost of living increasing and banks failing there's at least a chance of prices coming down.I have some money in cash ISA and also fixed bonds at 4% which is okay. Money earmarked for a car purchase is currently in easy access at 2.7% but I need it there so I can pounce on a bargain if something comes up.
Everything I see and read suggests prices of used cars won't fall anytime soon. With a lot of used cars I don't think we're even at the point of natural depreciation as several I'm looking at have gone up in the last month.
ChrisH72 said:
If you fix for 6/12/24 months then it's not easy access is it?
I have some money in cash ISA and also fixed bonds at 4% which is okay. Money earmarked for a car purchase is currently in easy access at 2.7% but I need it there so I can pounce on a bargain if something comes up.
Everything I see and read suggests prices of used cars won't fall anytime soon. With a lot of used cars I don't think we're even at the point of natural depreciation as several I'm looking at have gone up in the last month.
Just read what I wrote , 3.6% easy access better rates for 6/12/24 fixed.I have some money in cash ISA and also fixed bonds at 4% which is okay. Money earmarked for a car purchase is currently in easy access at 2.7% but I need it there so I can pounce on a bargain if something comes up.
Everything I see and read suggests prices of used cars won't fall anytime soon. With a lot of used cars I don't think we're even at the point of natural depreciation as several I'm looking at have gone up in the last month.
AlexNJ89 said:
ChrisH72 said:
If you fix for 6/12/24 months then it's not easy access is it?
I have some money in cash ISA and also fixed bonds at 4% which is okay. Money earmarked for a car purchase is currently in easy access at 2.7% but I need it there so I can pounce on a bargain if something comes up.
Everything I see and read suggests prices of used cars won't fall anytime soon. With a lot of used cars I don't think we're even at the point of natural depreciation as several I'm looking at have gone up in the last month.
Suuurely with interest rates rising, cost of living increasing and banks failing there's at least a chance of prices coming down.I have some money in cash ISA and also fixed bonds at 4% which is okay. Money earmarked for a car purchase is currently in easy access at 2.7% but I need it there so I can pounce on a bargain if something comes up.
Everything I see and read suggests prices of used cars won't fall anytime soon. With a lot of used cars I don't think we're even at the point of natural depreciation as several I'm looking at have gone up in the last month.
Don’t forget the exchange value of the pound matters too. It always has and its current level is low by recent historical norms.
You can hide a lot of devaluation in wealth through domestic prices not changing much but eventually being an importing nation is going to make that hard to hide.
Cars being one of the obvious areas where imports and exchange rates matter.
Its partly why a supply and demand price fall can’t be assumed, a pound today is not the same as a pound three years ago.
You can hide a lot of devaluation in wealth through domestic prices not changing much but eventually being an importing nation is going to make that hard to hide.
Cars being one of the obvious areas where imports and exchange rates matter.
Its partly why a supply and demand price fall can’t be assumed, a pound today is not the same as a pound three years ago.
Theoldguard said:
nickfrog said:
To me the word profiteering conveys a sense of illegality.
Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
Profiteering can be taking advantage of a situation and making profit well in excess of what you would in more normal times, like the energy companies have to make profit the excesses are now being taxed as a windfall. Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
You say shop elsewhere but this is the problem, they are all following each other, one store reduces they all reduce, then as one increases prices they all do.
10% on a tin of beans is alot less than 10% on a new £40k motor.
lornemalvo said:
Theoldguard said:
nickfrog said:
To me the word profiteering conveys a sense of illegality.
Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
Profiteering can be taking advantage of a situation and making profit well in excess of what you would in more normal times, like the energy companies have to make profit the excesses are now being taxed as a windfall. Unless competition laws are broken I don't see how this can happen. Maximising profit is what a business does, for the sake of its employees and share holders.
If the consumer prefers to pay £9.50 rather than £5 elsewhere as per 911hope's example, they've only got themselves to blame.
You say shop elsewhere but this is the problem, they are all following each other, one store reduces they all reduce, then as one increases prices they all do.
10% on a tin of beans is alot less than 10% on a new £40k motor.
When you consider sales will be up (not through volume, through inflation) and profits are down (sainsbury and tesco guidance is already less profit YOY) the simple maths means profit margin erosion. And when you consider the sector works on margins around the 3% 4% area, there isn't much room below before you are in a loss making situation. Operating at a loss in a mature market isn't a good place to be.
Re: heinz ketchup. Big issue is the dollar as Kraft Heinz report in the US and with the big currency swings of recent years, shareholders aren't happy with decreased returns and with £ gaining back it's strength, that equals margin erosion for Heinz when converted back to dollars.
Thats probably why Tesco fell out with them. FRO with your price increases. We'll pay extra due to your increased OPEX (energy, payroll etc) but we're not paying for your FX (currency) margin impact.
I hold shares in Tesco and Sainsbury by the way, thsts why I pay so much attention.
cheesejunkie said:
A good alternative would have farmers making a living and us all paying more with the supermarkets maybe losing some margin.
Supermarkets only have margins of around 5% which is about half the margin of an average company and only a quarter of the margin of a company like Apple.If I was looking to start up a business, food/grocery retail is one of the last industries I would want to be in.
I suspect car manufacturers also fit into this profiteering on the back of the war and pandemic.
Interesting they are now talking about negative inflation, this to me would seem logical when high energy costs have driven up pretty much everything else, so when those energy prices fall (as they are doing) the knock on effect should be that everything that uses energy is cheaper to produce, so that 10% increase could turn to a 5% decrease, the questions about pricing will really start being asked when pay rises for most will be a non starter, the expectation for prices to fall will be widespread and the media will be all over it with rip of Britain.
https://www.theguardian.com/business/2023/mar/24/g...
Interesting they are now talking about negative inflation, this to me would seem logical when high energy costs have driven up pretty much everything else, so when those energy prices fall (as they are doing) the knock on effect should be that everything that uses energy is cheaper to produce, so that 10% increase could turn to a 5% decrease, the questions about pricing will really start being asked when pay rises for most will be a non starter, the expectation for prices to fall will be widespread and the media will be all over it with rip of Britain.
https://www.theguardian.com/business/2023/mar/24/g...
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