Secondhand car price crash?
Discussion
KarlMac said:
It's almost like the algorithm is based on some crazy logic like supply & demand.
I know, right? Who'd have thought!On the A8 it may have fallen outside of Cinch's eligibility criteria due to age/mileage/etc, it may just be a car they don't want at all so WBAC would automatically need to just punt it on through BCA, maybe the market is currently groaning with them, it may be making future value predictions based on fuel prices and projected demand for large engine vehicles, any combination of those factors and more.
Although I did a stint in machine learning/big data and got this from talking to someone who would know the details and had no reason to lie, I don't personally have any access to the model or anything more than the general description I've already given. I know it is VERY complex and takes a lot of variables into account, but it is making predictions of future value as much as actually following the market.
In many ways it's similar to the stock trading ML models and is always being tweaked to improve profitability.
Milemuncher said:
Airport issues are primarily due to staff shortages as we no longer have enough people for all the jobs in the economy.
It’s part of the ‘Brexit dividend’.
Next door neighbour is a pilot, when I spoke to him last he said it was down to a lot of cabin staff and airport workers getting different jobs during COVID and no longer being willing to work in the industry. What we have now is each airline poaching staff from each other, but not actually managing to recruit many new people to the industry.It’s part of the ‘Brexit dividend’.
I also think COVID has made people question what is important to them and a lot of people have taken early retirement or are no longer will to do jobs with unsociable hours and low pay.
I think we have more than enough people, it is just there is little incentive for a lot of them to actually want to work anymore.
Venisonpie said:
Theoldguard said:
It's not as easy as that, many costs are fixed. So less volume and same / better margins are only possible with less people and smaller facilities/operations and an end product that you are able to sell for more than your competitors. It will be for customers to decide if buying a merc or Bmw is worth a premium on top of a premium and then you need enough people willing to pay those prices to make it work.
Economy of scale is important, if VW reduce their production numbers they don't get the same favourable rates on raw materials that they currently have. If they are shipping less vehicles they get charged more to move them, this gives competitors from Korea and other Asian countries the upper hand on pricing. Its also very risky if it does not work out, the German automotive sectors has suffered far worse than Asian Market because they decided to stop ordering chips when Covid hit, then when things started to pick up they were back of the queue.
The world has changed, German automotive is not what it once was (take a look at driver surveys to see where most are rated), the gap has closed and keeps closing. The go down the route of charging more and somehow present yourself as a more premium / sought after brand they would really need to up their game,. Just don't think it's a model that is suited to the way they are now set up and heading into the new world of EV technology where it seems the Chinese, Koreans and Japanese will have the edge.
Yeah, some valid points there - I agree it will be interesting to see how the emerging manufacturers position themselves. Also agree on German cars however I think their badges still overide reality. Where I see the real challenges regardless of geography is energy cost and raw material availability coupled with the political move towards public transport. I think the UK car market will shrink and Mfrs reailse this.Economy of scale is important, if VW reduce their production numbers they don't get the same favourable rates on raw materials that they currently have. If they are shipping less vehicles they get charged more to move them, this gives competitors from Korea and other Asian countries the upper hand on pricing. Its also very risky if it does not work out, the German automotive sectors has suffered far worse than Asian Market because they decided to stop ordering chips when Covid hit, then when things started to pick up they were back of the queue.
The world has changed, German automotive is not what it once was (take a look at driver surveys to see where most are rated), the gap has closed and keeps closing. The go down the route of charging more and somehow present yourself as a more premium / sought after brand they would really need to up their game,. Just don't think it's a model that is suited to the way they are now set up and heading into the new world of EV technology where it seems the Chinese, Koreans and Japanese will have the edge.
ChrisH72 said:
Throttlebody said:
eBay Motors Group recoded a 1.1% monthly drop in used prices in July.
That’s 6 months of consecutive falls. The trend develops.
I'm probably being thick here but what exactly does this mean? Is it:That’s 6 months of consecutive falls. The trend develops.
a) The price of all used cars in general has fallen 1%. So presumably that might mean some have gone down 5% but others up 4%
Or b) the price of a given used car has fallen 1%. So a car which was £10k last month is now £9900
And even if prices have dropped 5% in 6 months, aren't they still 25% more than they were 2 years ago?
From a personal perspective I have several saved searches on AT. All performance cars of some kind priced around £20k. Not one of them has come down and some seem to have gone up.
People make the point that used cars can't remain more expensive than new which I would agree with. But that's not what I'm seeing. Take an i30N for example, the list price has increased by £10k since it was launched just 5 years ago. Even the earliest used examples are not dropping under £20k yet unless they're cat s cars. A half decent 5 door i30N hatchback is about £22k. Seems expensive as it was probably only £24k new with discount. But when a new one is now well over £30k it doesn't look quite so bad.
Yes we are heading for recession and it'll be interesting to see what impact that has. As usual it will be the poorest in society who suffer most. For the rest it'll be uncomfortable but whether that's enough to stop people buying the cars they want remains to be seen. The media likes to make a bud deal of the cost of living 'crisis' but when you look around it appears that many people have plenty of money and will be fine.
An A Class isn't the kind of car I'd expect to remain in short supply for long once production is in full swing.
Da Original Whyayedee said:
There are somethings that I just understand how the prices remain firm. GR Yaris being one, if on Autotrader alone, there are is 160 of something for sale, how does the price not drop? Most are still looking close to list if not overs, there are 160 to choose from? Thats a saturated market, yet the every sticks firm to the price, surely they are not selling for that still?
Because there is a lack of new cars with a long waiting list, ergo, high demand. I put my name on the waiting list online, but was told no more allocation this year.
Our baby daughter loves heinz beef and sweet potato mash, but lately there's been a shortage. So I looked around online to see if it's available and came across this:
Obviously we didn't buy any, it's normally 70p. So our daughter has gone without.
Fast forward a few months and the wife bought some for 70p from Asda yesterday.
I wouldn't mind betting that the beef and mash ebay seller is also a used car salesman, on account of him still asking for £4 a tin.
Obviously we didn't buy any, it's normally 70p. So our daughter has gone without.
Fast forward a few months and the wife bought some for 70p from Asda yesterday.
I wouldn't mind betting that the beef and mash ebay seller is also a used car salesman, on account of him still asking for £4 a tin.
nickfrog said:
piddy44 said:
nickfrog said:
piddy44 said:
Yes him & his wife are extremely wealthy (...)
I think that's a positive overall. 
A lady my girlfriend works with has just ordered an Audi Q3 and is being quoted a 3 month delivery. Is production ramping up, or has she (as I suspect) got a cancelled order.
Be interesting to see how many people are cancelling orders for cars now the economy is not looking so great.
I actually had a Dacia on order, I too went from a 7 month to 3 month delivery time, again because I suspect I got a cancelled order. In the end I cancelled my order too as I changed my mind, and I notice the dealer has it listed on their website for list price (£800 more than I was going to pay as list price increased after I ordered the car)
The dealer clearly doesn't have someone who had that car on order to take over the order then, and the fact it is going for list implies demand isn't that great for that car at the moment.
Interesting times.
Watch some YouTube videos on car repossessions and defaults in the US, some quite scary figures being quoted. Also there are so many repossessed cars available that they are having to hold back selling them for fears of causing prices to crash.
Be interesting to see how many people are cancelling orders for cars now the economy is not looking so great.
I actually had a Dacia on order, I too went from a 7 month to 3 month delivery time, again because I suspect I got a cancelled order. In the end I cancelled my order too as I changed my mind, and I notice the dealer has it listed on their website for list price (£800 more than I was going to pay as list price increased after I ordered the car)
The dealer clearly doesn't have someone who had that car on order to take over the order then, and the fact it is going for list implies demand isn't that great for that car at the moment.
Interesting times.
Watch some YouTube videos on car repossessions and defaults in the US, some quite scary figures being quoted. Also there are so many repossessed cars available that they are having to hold back selling them for fears of causing prices to crash.
TheGreatDane said:
What was going for £34-35k is now £28-30k and as you said this is before the real pain starts.
I think the big expense a lot of people are not really thinking about is when the fuel cap increases in October and January. They are predicting that the average Gas and Electric bill is going to be £4400 by January, this is going to be a massive shock to a lot of people.It's summer at the moment, nobody has their heating on so most people are paying their lowest bills of the year. Come January, when it is the coldest month of the year, I dread to think how much the monthly bill is going to be.
I think in six months the financial pain will start for a lot of people, double that if they need to remortgage in the near future.
Da Original Whyayedee said:
dan98 said:
Here's hoping stuff like this literally halves in price, sharpish:
https://www.autotrader.co.uk/car-details/202208058...
It's stuff like this that needs to change.... how is that still £14.5k? I have been looking for a small car for just buzzing around the city and getting the OH driving, but the prices are insane!https://www.autotrader.co.uk/car-details/202208058...
Da Original Whyayedee said:
dan98 said:
Here's hoping stuff like this literally halves in price, sharpish:
https://www.autotrader.co.uk/car-details/202208058...
It's stuff like this that needs to change.... how is that still £14.5k? I have been looking for a small car for just buzzing around the city and getting the OH driving, but the prices are insane!https://www.autotrader.co.uk/car-details/202208058...
The stains on the interior and the advisories for the front tyres on the advisory tells me that it hasn't exactly been cherished.
As you say, that would have been an £8 or £9K car pre pandemic.
Theoldguard said:
Jiebo said:
Most people of working age live hand to mouth, spending everything they have. Even high earners do this. Once they are squeezed due to higher costs over the winter, this will force them to curtail spending, and thats when the snowball effect of the recession really starts. For the moment everything is great, sun is shining, they've probably 'made' tens of thousands on their houses, unemployment is low, debt is still cheap, sentiment is high. It will make a turn for the worst by Q1/Q2 2023.
This is the thing, people for a long time regardless of income are living beyond their means, this has been fuelled with cheap borrowing costs and ever increasing house prices.Around 5 years my boss at work with company car, good salary and wife who worked in banking was telling me one afternoon that when they bought their house they put £60k on credit cards, mostly 0% interest cards to do the place up as wife felt it was the best route to go down. However when the zero interest ended they had cleared only the minimum amount and with few zero interest cards left offering high balance transfer they were stuck paying something like £1k a month just to keep the interest at bay.
He did not seem overlay bothered as when calculated his property value had increased more per month than the interest on the cards, but it just shows how everyone's circumstances are different and a lot of it reliant on house prices continue to grow as his get out plan was to sell up if things got out of hand.
There is so much money tied up and backed up by property if there is any impact on prices with rising IR, tighter lending, squeeze on incomes and a general economic downturn this is when you will see a lot of other asset prices take a hit.
The first sign that house prices are no longer growing and the magic money tree is no longer providing will see consumer confidence & spending plummet.
GT3Manthey said:
Throttlebody said:
A price spread of £5K between very similar cars for sale is unsustainable. The chancers and speculators will be forced to drop.
I don’t see any reason the Yaris is still 33ish grand. Great fun cars but not rare and are compromised with very little space .
If and when everyone who wants one can buy new, then there will be no reason for the second hand market to be so firm, until then, they will stay strong. So well into next year, as all this years allocation is sold.
Da Original Whyayedee said:
There are always going to be outliers in these markets though, for everyone that goes below what people were expecting there will be another person who is walks in JZM pants down shouting “take my money”
That's usually me, followed up a few years later with "take my car, its cheap"If anyone wants to know when cars are going cheap, just wait until I'm ready to sell, that will signify the bottom of the market.
I think we can all agree that the top of the market was Sept/Oct 21, just when I bought my last car..
But high, sell low.
On run of the mill white good cars the difference between dealers prices and WBAC prices is growing bigger and bigger. For example, a Dacia Jogger Comfort 2022 car with 355 miles on the clock
List price = £18500
Dealer price = £16995
WBAC price = £13,180
I think the days of being able to sell a nearly new, white good car for more than you bought it for are clearly over.
With massive energy price rises on the horizon, higher interest rates and 10%+ inflation I can only see car prices going one way.
It's going to take a little while for dealers to realise this is the new normal and understand that they are losing money on all the stock they paid way too much for.
List price = £18500
Dealer price = £16995
WBAC price = £13,180
I think the days of being able to sell a nearly new, white good car for more than you bought it for are clearly over.
With massive energy price rises on the horizon, higher interest rates and 10%+ inflation I can only see car prices going one way.
It's going to take a little while for dealers to realise this is the new normal and understand that they are losing money on all the stock they paid way too much for.
breadvan said:
I need to give up my day job. 
That's a fairly high depreciating car in normal times too, mercedes do seem to be heavily hit by the chips, maybe be because they sell cars laden with tech.
Edited by Niponeoff on Thursday 18th August 12:48
troika said:
Theoldguard said:
It's a funny time, took the wife's EV for its service yesterday, its on a road with half dozen dealers, took a stroll whilst the service was being done. All very quiet, on the face it does not seem to a shortage of stock on the forecourts but did not want to get too close as the few people I did see wandering around were getting quickly pounced on by the sales staff.
Yes it's a Thursday but I have picked a few new cars up over the years and had my own vehicles serviced mid week and often find those days to be fairly busy, with test drives and general browsing, not yesterday though. The dealership that I was in I saw no one at the sales desks (but to be fair I was not there long).
You get the feelings that sales teams are putting on a brave face but they are fully aware of the way costs are rising for everyone and with in many ways alot of uncertainty ahead they know its going to get tough in the coming months / year ahead.
What spare money people have I think they are prioritising holidays and time away rather than commiting to a longer term purchase like a new car, last year and the year previous with travel heavily restricted I guess cars were the go to to fill that void, but as travel returns to normal and car prices now alot higher than they were it does seem to have dampened the appetite.
And with energy costs constantly in the news now and with nobody able to say where they will end or how high they will go its certainly a worry for lots of people, even those who are ok financially but in a larger property with a number of occupants are still likely to see an energy bill 4x what they were paying a year ago by the end of this winter, it's not uncommon to go from £2000 to £8000 per year. That's a big chunk from anyone's budget.
Completely agree. The vast majority simply won’t be spending discretionary income on cars. People fortunate enough to have spare money once the bills are paid will be saving it (if they’ve got any sense), such are the levels of uncertainty around pretty much everything. I can see many dealers closing. Yes it's a Thursday but I have picked a few new cars up over the years and had my own vehicles serviced mid week and often find those days to be fairly busy, with test drives and general browsing, not yesterday though. The dealership that I was in I saw no one at the sales desks (but to be fair I was not there long).
You get the feelings that sales teams are putting on a brave face but they are fully aware of the way costs are rising for everyone and with in many ways alot of uncertainty ahead they know its going to get tough in the coming months / year ahead.
What spare money people have I think they are prioritising holidays and time away rather than commiting to a longer term purchase like a new car, last year and the year previous with travel heavily restricted I guess cars were the go to to fill that void, but as travel returns to normal and car prices now alot higher than they were it does seem to have dampened the appetite.
And with energy costs constantly in the news now and with nobody able to say where they will end or how high they will go its certainly a worry for lots of people, even those who are ok financially but in a larger property with a number of occupants are still likely to see an energy bill 4x what they were paying a year ago by the end of this winter, it's not uncommon to go from £2000 to £8000 per year. That's a big chunk from anyone's budget.
I just booked mine in for a service. Silly price for an oil change which I could do myself but need the stamp for warranty. I suspect this is one area where people will look to save money rather than pay a dealer £120 + VAT labour rate. I called one dealer who wouldn’t commit to a price for the service. How ridiculous is that? It’s an oil and filter, air and cabin filter change on a 3 year old car FFS. Muppets.
It does of course affect value. If you value FDSH as opposed to FSH.
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