Secondhand car price crash?
Discussion
Joey Deacon said:
Looks like we might get into a Mexican standoff then where dealers are refusing to lower their prices and buyers are no longer willing to pay them.
This was my experience two weeks agoWell known dealer wanted top money for their (very nice) car but offered very very low on trade in for my current wheels
Deal couldn’t be done, so I walked
However the car I looked at is no longer on AT or their website, so someone else did buy it. Still plenty people out there willing to pay top money
therams said:
This was my experience two weeks ago
Well known dealer wanted top money for their (very nice) car but offered very very low on trade in for my current wheels
Deal couldn’t be done, so I walked
However the car I looked at is no longer on AT or their website, so someone else did buy it. Still plenty people out there willing to pay top money
If someone bought it then the stand off can definitely get even more mexican.Well known dealer wanted top money for their (very nice) car but offered very very low on trade in for my current wheels
Deal couldn’t be done, so I walked
However the car I looked at is no longer on AT or their website, so someone else did buy it. Still plenty people out there willing to pay top money
AlexNJ89 said:
therams said:
This was my experience two weeks ago
Well known dealer wanted top money for their (very nice) car but offered very very low on trade in for my current wheels
Deal couldn’t be done, so I walked
However the car I looked at is no longer on AT or their website, so someone else did buy it. Still plenty people out there willing to pay top money
If someone bought it then the stand off can definitely get even more mexican.Well known dealer wanted top money for their (very nice) car but offered very very low on trade in for my current wheels
Deal couldn’t be done, so I walked
However the car I looked at is no longer on AT or their website, so someone else did buy it. Still plenty people out there willing to pay top money
Reading the article about Cazoo scaling down its business and cutting jobs seems to suggest that they are expecting to sell fewer cars. Nowhere does it say anything about prices crashing.
Another poster got plenty of stick for saying that dealers would be looking to chase margins rather than volume. Seems they may be right after all?
It's clear that even when supply issues for new cars get sorted there will be a knock on effect for the used car market for quite some time. Fewer cars available to sell means that dealers will have to squeeze every last but of profit out of their stock. I'd expect this high asking price and low part ex thing to go on for quite some time yet. And with the rise of online buying sites there won't even be many private sellers to offer better value. We are at a point where people are reluctant to pay high prices but ultimately if they need to change their cars they may have no choice.
Another poster got plenty of stick for saying that dealers would be looking to chase margins rather than volume. Seems they may be right after all?
It's clear that even when supply issues for new cars get sorted there will be a knock on effect for the used car market for quite some time. Fewer cars available to sell means that dealers will have to squeeze every last but of profit out of their stock. I'd expect this high asking price and low part ex thing to go on for quite some time yet. And with the rise of online buying sites there won't even be many private sellers to offer better value. We are at a point where people are reluctant to pay high prices but ultimately if they need to change their cars they may have no choice.
Fusion777 said:
Big news. Certainly shows the lack of confidence they have in future prospects.
I guess the reality going forward is lower volume and lower prices, so overall lower margins. They just will not be able to square it, money is drying up, confidence is falling and now things are returning to normal for alot of people with holidays back on, travelling back into the office at the same time when household budgets are being stretched, average energy bills hitting close to £3k this winter and £2 a litre fuel.For those who don't need to change their car, I just don't think there will be much appetite, that Covid lockdown spare cash mentality has passed, reality is current prices are very high and people's income is not going as far as it did 12 mths ago, it is going to be squeaky bum time for dealers with overpriced stock going into a pretty bad winter for many financially.
Mikebentley said:
I’m buying new for cash. New car prices are only going up and up which means my Defender is now £71k new. I’m paying £62k in two weeks time. This gives me an element of protection from initial depreciation. The price of anything is what people are willing to pay.
JLR are really struggling with supply at the minute, 2 year waits on some models. These price increases they can get away with for now as no one is quite sure how things look on the supply side, and if you really want something and are prepared to pay then they will sell them.It's when everything settles, be it in 1,2 or maybe 3 years the market will once again find its level, even if prices do not drop then discounts / incentives could make it look cheaper.
It was interesting what the head of Ford said the weekend that they are looking to move to 100% online sales with a non negotiable pricing strategy, selling direct to customers cutting out the dealerships and reducing the sites to servicing and after sale / hand over only. This is in response to what he sees as the threat from China in the EV market with their cost effective manufacturing leading to some established car manufacturers being forced out, to remain competive on pricing it seems dealerships, advertising and other associated costs are where savings will be made.
Theoldguard said:
JLR are really struggling with supply at the minute, 2 year waits on some models. These price increases they can get away with for now as no one is quite sure how things look on the supply side, and if you really want something and are prepared to pay then they will sell them.
It's when everything settles, be it in 1,2 or maybe 3 years the market will once again find its level, even if prices do not drop then discounts / incentives could make it look cheaper.
It was interesting what the head of Ford said the weekend that they are looking to move to 100% online sales with a non negotiable pricing strategy, selling direct to customers cutting out the dealerships and reducing the sites to servicing and after sale / hand over only. This is in response to what he sees as the threat from China in the EV market with their cost effective manufacturing leading to some established car manufacturers being forced out, to remain competive on pricing it seems dealerships, advertising and other associated costs are where savings will be made.
This makes sense, the dealership distribution network with the 1980s style pretend negotiations, ‘talking to boss to check if they can do it’, is just nonsense and I think thats dying out with the older generation.It's when everything settles, be it in 1,2 or maybe 3 years the market will once again find its level, even if prices do not drop then discounts / incentives could make it look cheaper.
It was interesting what the head of Ford said the weekend that they are looking to move to 100% online sales with a non negotiable pricing strategy, selling direct to customers cutting out the dealerships and reducing the sites to servicing and after sale / hand over only. This is in response to what he sees as the threat from China in the EV market with their cost effective manufacturing leading to some established car manufacturers being forced out, to remain competive on pricing it seems dealerships, advertising and other associated costs are where savings will be made.
Millennials and Gen Z don’t just don’t operate in this way. Elon had it 100% bang on with Tesla, with small shops showcasing the product on the high street, and then online ordering and delivery with a fixed price. This is the future.
ChrisH72 said:
Reading the article about Cazoo scaling down its business and cutting jobs seems to suggest that they are expecting to sell fewer cars. Nowhere does it say anything about prices crashing.
Another poster got plenty of stick for saying that dealers would be looking to chase margins rather than volume. Seems they may be right after all?
It's clear that even when supply issues for new cars get sorted there will be a knock on effect for the used car market for quite some time. Fewer cars available to sell means that dealers will have to squeeze every last but of profit out of their stock. I'd expect this high asking price and low part ex thing to go on for quite some time yet. And with the rise of online buying sites there won't even be many private sellers to offer better value. We are at a point where people are reluctant to pay high prices but ultimately if they need to change their cars they may have no choice.
The article also doesn't mention anything about chasing margins rather than volume. Another poster got plenty of stick for saying that dealers would be looking to chase margins rather than volume. Seems they may be right after all?
It's clear that even when supply issues for new cars get sorted there will be a knock on effect for the used car market for quite some time. Fewer cars available to sell means that dealers will have to squeeze every last but of profit out of their stock. I'd expect this high asking price and low part ex thing to go on for quite some time yet. And with the rise of online buying sites there won't even be many private sellers to offer better value. We are at a point where people are reluctant to pay high prices but ultimately if they need to change their cars they may have no choice.
The article does say that they expect demand to fall because of the economic climate, yes they expect to sell less cars but again there is nothing in there that references lack of stock being the reason for that.
I definitely agree with the other poster that mentions squeaky bum time for dealers with stock they have bought at the inflated prices of their own making.
If you are in the business of buying cars for one price and selling them for a higher price, you don't need a business degree to know that if the car is still sitting on the forecourt 6 months after listing that things are far from ideal.
Theoldguard said:
It was interesting what the head of Ford said the weekend that they are looking to move to 100% online sales with a non negotiable pricing strategy, selling direct to customers cutting out the dealerships and reducing the sites to servicing and after sale / hand over only. This is in response to what he sees as the threat from China in the EV market with their cost effective manufacturing leading to some established car manufacturers being forced out, to remain competive on pricing it seems dealerships, advertising and other associated costs are where savings will be made.
Interesting. This will be the reality for many manufacturers in the coming years. Chinese manufacturing is a huge threat to anyone else- look at how they’ve cornered other markets. The have the scale and wage floor to make it happen (wages are rising there yes, but still way behind the west’s). Fusion777 said:
Theoldguard said:
It was interesting what the head of Ford said the weekend that they are looking to move to 100% online sales with a non negotiable pricing strategy, selling direct to customers cutting out the dealerships and reducing the sites to servicing and after sale / hand over only. This is in response to what he sees as the threat from China in the EV market with their cost effective manufacturing leading to some established car manufacturers being forced out, to remain competive on pricing it seems dealerships, advertising and other associated costs are where savings will be made.
Interesting. This will be the reality for many manufacturers in the coming years. Chinese manufacturing is a huge threat to anyone else- look at how they’ve cornered other markets. The have the scale and wage floor to make it happen (wages are rising there yes, but still way behind the west’s). The MG EVs that are on offer in the UK market are already showing themselves to be popular whilst combining affordability and quality. That is just the tip of the iceberg.
It will be still be about badge loyalty and snobbery for some in the EV world, but for others including myself it will be about durability, quality and affordability, something which Chinese manufacturers are already showing themselves as being capable of delivering.
As for online only sales, I can't see it working or being particularly effective unless it's for a kit car where you know what you're letting yourself in for. For starters, job losses will be the ultimate indication of how humane a manufacturer actually is despite the claims of caring for the planet etc.
Whilst it may seem like a modern and convenient solution in an Internet age, the convenience of ordering a car to your desired specification online only really applies to new cars.
There would still be approved used cars that you'd still want to inspect and try out and they need to be kept somewhere, along with the technical teams. Can't imagine Deliveroo or Uber Eats dark kitchens for approved car servicing.
It's also far easier to search for a used car online and go to the right branch than to organise a delivery for a test drive / sale via the web.
Having a dealership ensures human interaction, getting the right advice, being able to see what you're getting, being able to negotiate prices and options (e.g. financing) etc.
Whilst they're at it, main dealers may as well keep the new cars there.
Joey Deacon said:
Pistonheader101 said:
cars do seem to be selling well - check cargiant cazoo cinch etc
Cazoo are getting rid of 750 employees so that doesn't seem to be the case in reality.£120 profit per car just isnt acceptable and their investors are now unhappy
Also cazoo coming out and actually saying to their investors they may never be profitable well thats not a good look.
Edited by Dan W. on Wednesday 8th June 09:37
captain.scarlet said:
I agree there. As I've said I another thread, there's a strong possibility that Chinese manufacturers will both fill voids and make a strong mark in both the ICE market (which will remain dominant in other parts of the world despite the largely Western switch to EVs only misleadingly suggesting otherwise) and in the EV market as well.
The MG EVs that are on offer in the UK market are already showing themselves to be popular whilst combining affordability and quality. That is just the tip of the iceberg.
It will be still be about badge loyalty and snobbery for some in the EV world, but for others including myself it will be about durability, quality and affordability, something which Chinese manufacturers are already showing themselves as being capable of delivering.
As for online only sales, I can't see it working or being particularly effective unless it's for a kit car where you know what you're letting yourself in for. For starters, job losses will be the ultimate indication of how humane a manufacturer actually is despite the claims of caring for the planet etc.
Whilst it may seem like a modern and convenient solution in an Internet age, the convenience of ordering a car to your desired specification online only really applies to new cars.
There would still be approved used cars that you'd still want to inspect and try out and they need to be kept somewhere, along with the technical teams. Can't imagine Deliveroo or Uber Eats dark kitchens for approved car servicing.
It's also far easier to search for a used car online and go to the right branch than to organise a delivery for a test drive / sale via the web.
Having a dealership ensures human interaction, getting the right advice, being able to see what you're getting, being able to negotiate prices and options (e.g. financing) etc.
Whilst they're at it, main dealers may as well keep the new cars there.
EVs entering the market do offer less known and emerging manufacturer's especially in Asia to have a bigger role to play and ultimately market share. EVs are more technical then ICE and fit with what the Asian markets have become good at, tech. The MG EVs that are on offer in the UK market are already showing themselves to be popular whilst combining affordability and quality. That is just the tip of the iceberg.
It will be still be about badge loyalty and snobbery for some in the EV world, but for others including myself it will be about durability, quality and affordability, something which Chinese manufacturers are already showing themselves as being capable of delivering.
As for online only sales, I can't see it working or being particularly effective unless it's for a kit car where you know what you're letting yourself in for. For starters, job losses will be the ultimate indication of how humane a manufacturer actually is despite the claims of caring for the planet etc.
Whilst it may seem like a modern and convenient solution in an Internet age, the convenience of ordering a car to your desired specification online only really applies to new cars.
There would still be approved used cars that you'd still want to inspect and try out and they need to be kept somewhere, along with the technical teams. Can't imagine Deliveroo or Uber Eats dark kitchens for approved car servicing.
It's also far easier to search for a used car online and go to the right branch than to organise a delivery for a test drive / sale via the web.
Having a dealership ensures human interaction, getting the right advice, being able to see what you're getting, being able to negotiate prices and options (e.g. financing) etc.
Whilst they're at it, main dealers may as well keep the new cars there.
You will always get certain brand that attract certain customers but with EVs it's all new, just look at Tesla where did they come from. Now one of the most sought after brands for EVs.
Just because a manufacturer had a good rep or perceived image with ICE, it could be alot different when it comes to EVs now and in future. A lot of the fun has gone, running costs are rising, majority just want a nice looking car that's reliable, affordable and easy to live with. In other markets the Chinese have been pretty good at that, along with the Koreans.
I get your point with used sales, but it seems Ford are focusing on the new car market, that is where dealers take their share from a sale, Ford it seems are looking to cut this out of the equation in order to keep new prices in check and competitive and maybe quickly react by running on line promotions direct to customers.
Used is a different market and does have little to do with the manufacturer or supply of vehicle, if a dealership decides to sell used that's their call, Ford just don't want new inventory tied up at dealers, and are going away from haggling and instead are looking to give the customers a simple advertised price and delivery in x.
It would not take much to have third party for part ex stock, with the likes of motorpoint, Cazoo and doing away with dealership used altogether.
Others have been happily buying used cars and houses unseen during covid, provided the guarantees are there who knows what's possible.
Theoldguard said:
A lot of the fun has gone, running costs are rising, majority just want a nice looking car that's reliable, affordable and easy to live with. In other markets the Chinese have been pretty good at that, along with the Koreans.
Totally agree, once a Chinese manufacturer starts selling a decent, well priced EV in the UK they are going to take a massive market share. Bit like when Huawei/OPPO/One Plus started selling mobile phones that were a quarter of the cost of the equivalent Samsung/Apple phone. The MG ZS EV is £27,745, if it was possible to buy a decent Chinese electric car for under £20K I think they would clean up.
Joey Deacon said:
Totally agree, once a Chinese manufacturer starts selling a decent, well priced EV in the UK they are going to take a massive market share. Bit like when Huawei/OPPO/One Plus started selling mobile phones that were a quarter of the cost of the equivalent Samsung/Apple phone.
The MG ZS EV is £27,745, if it was possible to buy a decent Chinese electric car for under £20K I think they would clean up.
Not electric but I came across this random Chinese brand motor for sale recently!The MG ZS EV is £27,745, if it was possible to buy a decent Chinese electric car for under £20K I think they would clean up.
https://www.yorkshirevehiclesolutions.co.uk/usedca...
I'm not convinced there will be a crash, waitlists and inflation are going to keep new car prices high, dealers wont want to discount older stock because it wont make buying new as attractive .
As belts start to tighten people will downsize their fleets where possible, end their pcp and not take out a new one so prices will drop but will take another 12 months i reckon before we are back to pre covid prices
As belts start to tighten people will downsize their fleets where possible, end their pcp and not take out a new one so prices will drop but will take another 12 months i reckon before we are back to pre covid prices
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