Secondhand car price crash?

[DSLiverpool]

lornemalvo said:

Jonny TVR said:

Dan W. said:

They are selling really well, these guys are just spunking profit out of the door thats the issue, its not sustainable.

£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

A business that doesn't make a profit isn't a business.

That old saying - Turnover is vanity, profit is sanity

Cough - Amazon - cough !

[Jonny TVR]

DSLiverpool said:

Cough - Amazon - cough !

They were making a profit I think ..

It depends what your strategy is and also where you are in the business life cycle etc. There are always examples to disprove it but for me long term if you are not making money then whats the point.

[Theoldguard]

Just a thought and maybe dealers on here could answer.

If your holding high priced stock and see that enquiries are falling off and people just not prepared to pay the prices being advertised and at the same time pipeline stock from Auction etc is coming through with cheaper wholesale prices due to the different reasons already mentioned on these pages, do you look to lower the price of current non selling inventory and replace with cheaper stock, lowering your average and offsetting / minimising any losses.

This has always been my approach with stocks, whenever there is a market dip I buy more shares, so even though some I bought at higher price are down on paper, it's an opportunity to buy more at a lower price.

For a car sales business having money tied up in stock that is not selling does not release cash that is needed to buy said cheaper wholesale stock.

If this is correct and wholesale prices as reported are coming then its just a matter of time until dealer's adjust their forecourt prices to free up cash to buy in more stock at these lower prices.

[demic]

Joey Deacon said:

Pistonheader101 said:

cazoo do the full charade

What about if you pay in full with a debit card, do they throw the keys at you and scream "Get out!"

Hahah no unfortunately you get the full cringeworthy revel!

[jason61c]

lornemalvo said:

Jonny TVR said:

Dan W. said:

They are selling really well, these guys are just spunking profit out of the door thats the issue, its not sustainable.

£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

A business that doesn't make a profit isn't a business.

That old saying - Turnover is vanity, profit is sanity

Cazoo are just closing down lots of the used car market. If they make £100 per car, while putting dealers out of business and growing their footprint on the car market, they're in a winning position.

People are just bored of showrooms, there's no real value in them.

[Dan W.]

jason61c said:

lornemalvo said:

Jonny TVR said:

Dan W. said:

They are selling really well, these guys are just spunking profit out of the door thats the issue, its not sustainable.

£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

A business that doesn't make a profit isn't a business.

That old saying - Turnover is vanity, profit is sanity

Cazoo are just closing down lots of the used car market. If they make £100 per car, while putting dealers out of business and growing their footprint on the car market, they're in a winning position.

People are just bored of showrooms, there's no real value in them.

I honestly dont think cazoo will be around in 2 years time, I would also agree some are bored of the showroom side of it, but majority of customers want to come and look at the exact car touch it and drive it first before purchasing.

Vertu are a good example of online sales are very small still, only 900 pure online sales from about 90k used cars in the last year i think.

Cazoo are just not gonna put enough big car dealers out of business any time soon, they will never be up there with the big boys of used cars, and certainly not within a few years as they predicted and now even admit they wont make money and give no assurances they will achieve their expecations.

Edited by Dan W. on Thursday 9th June 12:34

[Al U]

Dan W. said:

majority of customers want to come and look at the exact car touch it and drive it first before purchasing.

I am definitely in this camp, especially with a used car. If I can find things wrong with it then I'd rather argue the point before committing to buy and most of the time I am going to look at a car I haven't driven and I wouldn't buy something I haven't driven first.

I have only ever had one brand new car and even in that case the dealer gave me a demonstrator for a weekend to decide if it was right for me. I guess with Cazoo's 7 day money back guarantee there is that option to give it back but it's obviously less convenient. I am not sure if there are people on here that have bought a car from Cazoo and used the 7 day thing to reject the car? Might warrant a thread of it's own so don't want to derail this one.

[Jonny TVR]

I've bought many cars without road testing or viewing prior to purchase or even speaking to them in some cases, just by email.

Depends of course on what car it is and who you are buying from.

[Jiebo]

Dan W. said:

I honestly dont think cazoo will be around in 2 years time, I would also agree some are bored of the showroom side of it, but majority of customers want to come and look at the exact car touch it and drive it first before purchasing.

Vertu are a good example of online sales are very small still, only 900 pure online sales from about 90k used cars in the last year i think.

Cazoo are just not gonna put enough big car dealers out of business any time soon, they will never be up there with the big boys of used cars, and certainly not within a few years as they predicted and now even admit they wont make money and give no assurances they will achieve their expecations.

Edited by Dan W. on Thursday 9th June 12:34

I would happily take the other side of this bet.

The entire market is ripe for change. It's worth recognising that the shift likely isn't coming from 40 yr old plus changing how they buy, but the under 40s who are now likely a large percentage of the customer base. Younger people really don't want to visit car dealers, it's a waste of time and effort.

It wasn't long a go people would never believe anyone would buy clothes online. How could they do that, they don't get to touch the fabric, check for fitting etc. but look at the market now.

If I was a used car dealer, I would be very worried about my future.

[Jonny TVR]

Jiebo said:

I would happily take the other side of this bet.

The entire market is ripe for change. It's worth recognising that the shift likely isn't coming from 40 yr old plus changing how they buy, but the under 40s who are now likely a large percentage of the customer base. Younger people really don't want to visit car dealers, it's a waste of time and effort.

It wasn't long a go people would never believe anyone would buy clothes online. How could they do that, they don't get to touch the fabric, check for fitting etc. but look at the market now.

If I was a used car dealer, I would be very worried about my future.

Agree with this except for the 40 plus comment! The margins the main retailers expect to make for doing very little also makes you want to cut them out. Also cars have become more of a disposable item.

[A500leroy]

Jiebo said:

Dan W. said:

I honestly dont think cazoo will be around in 2 years time, I would also agree some are bored of the showroom side of it, but majority of customers want to come and look at the exact car touch it and drive it first before purchasing.

Vertu are a good example of online sales are very small still, only 900 pure online sales from about 90k used cars in the last year i think.

Cazoo are just not gonna put enough big car dealers out of business any time soon, they will never be up there with the big boys of used cars, and certainly not within a few years as they predicted and now even admit they wont make money and give no assurances they will achieve their expecations.

Edited by Dan W. on Thursday 9th June 12:34

I would happily take the other side of this bet.

The entire market is ripe for change. It's worth recognising that the shift likely isn't coming from 40 yr old plus changing how they buy, but the under 40s who are now likely a large percentage of the customer base. Younger people really don't want to visit car dealers, it's a waste of time and effort.

It wasn't long a go people would never believe anyone would buy clothes online. How could they do that, they don't get to touch the fabric, check for fitting etc. but look at the market now.

If I was a used car dealer, I would be very worried about my future.

Id go one step further and say that at least 50% of people wont buy a car when they are all an ev, they will just rent one when they really need it as the cost to purchase them will be so high for low-average earners Most people will go to online shopping for pretty much everything and i can see commuting done by company pool cars where someone is paid an allowance to collect people they work with on the way in/going home. .At best i can see us going back to a one car household senerio.

[Drive Blind]

I posted about a month back I thought prices were coming down. I was wrong.

Still looking at Golf 7/7.5 GTI's and GTD's prices are still as high as ever. A few examples in particular have been on the 'trader for months.
Dealers seem to be sticking to their prices despite the cars not selling.

[Al U]

Drive Blind said:

I posted about a month back I thought prices were coming down. I was wrong.

Still looking at Golf 7/7.5 GTI's and GTD's prices are still as high as ever. A few examples in particular have been on the 'trader for months.
Dealers seem to be sticking to their prices despite the cars not selling.

It's all about who blinks first isn't it.

Dealer clearly has the car up for a price based on what they paid for it and what they want for it. That number has not been low enough for it to sell until now, they are hoping someone like you who is in the market will see prices aren't moving and will just buy it at that level.

Or you can look at it that prices will have to move if they want to sell, they just haven't moved them yet.

[indapendentlee]

Jiebo said:

Dan W. said:

I honestly dont think cazoo will be around in 2 years time, I would also agree some are bored of the showroom side of it, but majority of customers want to come and look at the exact car touch it and drive it first before purchasing.

Vertu are a good example of online sales are very small still, only 900 pure online sales from about 90k used cars in the last year i think.

Cazoo are just not gonna put enough big car dealers out of business any time soon, they will never be up there with the big boys of used cars, and certainly not within a few years as they predicted and now even admit they wont make money and give no assurances they will achieve their expecations.

Edited by Dan W. on Thursday 9th June 12:34

I would happily take the other side of this bet.

The entire market is ripe for change. It's worth recognising that the shift likely isn't coming from 40 yr old plus changing how they buy, but the under 40s who are now likely a large percentage of the customer base. Younger people really don't want to visit car dealers, it's a waste of time and effort.

It wasn't long a go people would never believe anyone would buy clothes online. How could they do that, they don't get to touch the fabric, check for fitting etc. but look at the market now.

If I was a used car dealer, I would be very worried about my future.

Agree - although I do think Cinch has a decent advantage over Cazoo in that they are part of Constellation which owns WBAC, giving them access to buy stock for less than anyone else. They also have BCA which gives them effective control of the stock levels of other sellers i.e if Cinch found themselves with too many Fiestas, they could limit Fiestas being sold at auction to make their own stock more saleable (to a point, I'm sure they have some contractual obligations to sell certain vehicles).

[jimPH]

Al U said:

Drive Blind said:

I posted about a month back I thought prices were coming down. I was wrong.

Still looking at Golf 7/7.5 GTI's and GTD's prices are still as high as ever. A few examples in particular have been on the 'trader for months.
Dealers seem to be sticking to their prices despite the cars not selling.

It's all about who blinks first isn't it.

Dealer clearly has the car up for a price based on what they paid for it and what they want for it. That number has not been low enough for it to sell until now, they are hoping someone like you who is in the market will see prices aren't moving and will just buy it at that level.

Or you can look at it that prices will have to move if they want to sell, they just haven't moved them yet.

Yep. This S3, still 27k. I've watched it at:

22/10/21, 29k
25/11/21, 29k
21/01/22, 29k
28/02/22, 29k
06/04/22, 29k
10/05/22, 27k
09/06/22, 27k


When you've had your car up for 8 months and only dropped the price 2 months ago, might aswell wait a bit longer eh!

[Deep Thought]

jimPH said:

Al U said:

Drive Blind said:

I posted about a month back I thought prices were coming down. I was wrong.

Still looking at Golf 7/7.5 GTI's and GTD's prices are still as high as ever. A few examples in particular have been on the 'trader for months.
Dealers seem to be sticking to their prices despite the cars not selling.

It's all about who blinks first isn't it.

Dealer clearly has the car up for a price based on what they paid for it and what they want for it. That number has not been low enough for it to sell until now, they are hoping someone like you who is in the market will see prices aren't moving and will just buy it at that level.

Or you can look at it that prices will have to move if they want to sell, they just haven't moved them yet.

Yep. This S3, still 27k. I've watched it at:

22/10/21, 29k
25/11/21, 29k
21/01/22, 29k
28/02/22, 29k
06/04/22, 29k
10/05/22, 27k
09/06/22, 27k


When you've had your car up for 8 months and only dropped the price 2 months ago, might aswell wait a bit longer eh!

Private sale though, not dealer.

Either unrealistic expectations or in no rush to sell, for whatever reason.

[Al U]

Does anyone know what it looks like from the trader's side on Autotrader? Can they see how many people are "watching" their listings? Obviously you can on ebay etc. but I don't know how it works on Autotrader.

[jimPH]

Deep Thought said:

jimPH said:

Al U said:

Drive Blind said:

I posted about a month back I thought prices were coming down. I was wrong.

Still looking at Golf 7/7.5 GTI's and GTD's prices are still as high as ever. A few examples in particular have been on the 'trader for months.
Dealers seem to be sticking to their prices despite the cars not selling.

It's all about who blinks first isn't it.

Dealer clearly has the car up for a price based on what they paid for it and what they want for it. That number has not been low enough for it to sell until now, they are hoping someone like you who is in the market will see prices aren't moving and will just buy it at that level.

Or you can look at it that prices will have to move if they want to sell, they just haven't moved them yet.

Yep. This S3, still 27k. I've watched it at:

22/10/21, 29k
25/11/21, 29k
21/01/22, 29k
28/02/22, 29k
06/04/22, 29k
10/05/22, 27k
09/06/22, 27k


When you've had your car up for 8 months and only dropped the price 2 months ago, might aswell wait a bit longer eh!

Private sale though, not dealer.

Either unrealistic expectations or in no rush to sell, for whatever reason.

Aye, but the criteria is <10k miles, so he's not using it! Unless he's putting miles on and not changing the ad.

[Superflow]

The dealers are the same though many cars not moving now.

How much does it cost a private seller for eight months advertising?

It genuinely makes me laugh haha.

[Al U]

Deep Thought said:

Private sale though, not dealer.

Either unrealistic expectations or in no rush to sell, for whatever reason.

And on that topic, I think there are a lot of private listings knocking around at the moment where people are asking the same or very similar money to traders/dealers. Say what you like about traders/dealers but there are obviously benefits to buying through a trader/dealer and I think it's fair that some value is associated to that.

Private sellers putting their cars up at trade retail seems to be on the up on the cars I have seen and is quite wishful thinking I think.