Secondhand car price crash?

[brickwall]

Thing is there’s still plenty of room for discounting.

Pre covid it was often possible to bag 10-20% discounts on new stuff if you were savvy (by which I mean opportunistic lease deals and PCP “deposit contribution” bribes). One month Audi A6s would be going cheap, the next month it’d be 5 Series’.

Manufacturers factored these discounts into the prices and margins. Right now everything is going for list, so they’re making decent money on what little volume they can produce.

If new car volumes come back in the middle of a recession it will of course be the perfect storm…manufacturers will have to discount the hell out of new stock to shift it, and that’ll play through into the used market.

But until that happens prices in the used market are unlikely to move much (though volumes will drop).

[Auto810graphy]

Teaspoonasaurous said:

I've been following 2013/14 panameras on autotrader for the last month or so.
Prices have been steadily falling. Question is how bad will it get, I reckon September could see a bloodbath.

Panameras and other front engine Porsches are an interesting one as like we can see with Cayennes as they get older they start to gain more faults and being out of warranty the parts and repairs can be eye watering so people start to look elsewhere. I have got a client who purchased a 2017 Macan from a car supermarket type outlet and paid a £10k engine repair bill.

[Auto810graphy]

M4cruiser said:

Agreed, at the lower end of the market, still high prices.
Having read the posts on this thread talking about £20K+ used cars, and thinking which planet are they on .... at "my" end of the market there has been no reduction.
I'm browsing AutoTrader a lot, and cars which 2 years ago were in the range £600 to £800 are now £1,600 to £2,900.
I mean, these are cars which are just above the "MoT failure" and "non-runner" or "simple fault easily fixed" (yeah, right) level.

I have mentioned this before but anything sub £750 trade in value we just scrap. Last month we sent a coupe of 1 owner sub 100k cars to the scrapper as nobody wants them.

Only last week I sold a newer model style 2009 E350 with 90k on for £3750 and the guy is going to break it as it’s worth more as parts.

[Sheepshanks]

brickwall said:

If new car volumes come back in the middle of a recession it will of course be the perfect storm…manufacturers will have to discount the hell out of new stock to shift it, and that’ll play through into the used market.

For many marques, especially the "prestige" ones, they'll be able to able to divert cars to other markets so it feeks like it would take a lot for manufacturers to find themselves with excess new inventory in the UK.

[Al U]

Sheepshanks said:

For many marques, especially the "prestige" ones, they'll be able to able to divert cars to other markets so it feeks like it would take a lot for manufacturers to find themselves with excess new inventory in the UK.

I don't really think it's as simple as that. If they are producing cars they don't have orders for and those cars are RHD, they can't just send them anywhere clearly. There already is excess inventory in the UK, look at the new Astra for example (not a "prestige" brand), plenty of new ones available but sales are slow because of higher prices.

[Auto810graphy]

Al U said:

I don't really think it's as simple as that. If they are producing cars they don't have orders for and those cars are RHD, they can't just send them anywhere clearly. There already is excess inventory in the UK, look at the new Astra for example (not a "prestige" brand), plenty of new ones available but sales are slow because of higher prices.

Vauxhall historically sell on discount but they are trying to avoid discounts to keep residuals high however that only works if people want the product. Ford tried similar with the last new Mondeo and Focus, within a year rental discounts were everywhere and nearly new prices crashed.

[OutInTheShed]

ChrisH72 said:

In contrast, small economical cars are selling like hot cakes. I've been helping a colleague look for a small hatchback after her previous car died last week. She really wants a Fiesta Econetic tdci with a budget of around 5k. Every one she's found that looks half decent has already sold. There is one available not too far away which she wants to view but the dealer had already said its asking price only.

It's not just the fuel economy, the cheap insurance for under 30s is a big driver of small car prices.

Even pretty mundane medium sized cars can be dear to insure for a lot of people.
If you're not in the punitive insurance bracket, then it's perhaps worth thinking about a bigger cheaper can and paying a little more fuel and insurance. And tax I suppose....

[brickwall]

Al U said:

Sheepshanks said:

brickwall said:

If new car volumes come back in the middle of a recession it will of course be the perfect storm…manufacturers will have to discount the hell out of new stock to shift it, and that’ll play through into the used market.

For many marques, especially the "prestige" ones, they'll be able to able to divert cars to other markets so it feeks like it would take a lot for manufacturers to find themselves with excess new inventory in the UK.

I don't really think it's as simple as that. If they are producing cars they don't have orders for and those cars are RHD, they can't just send them anywhere clearly. There already is excess inventory in the UK, look at the new Astra for example (not a "prestige" brand), plenty of new ones available but sales are slow because of higher prices.

The dynamics of market optimisation definitely happens - manufacturers will just accept low orders and sales in the UK and won’t resort to discounting if they are managing to flog the factory’s capacity elsewhere.

However
- The UK is a large market for many European manufacturers (2nd largest in Europe for Audi after Germany, and 2.5x the size of the French market). When the UK slows down it’s not like there are loads of markets that can easily absorb the volumes. This dynamic is the same (perhaps even more so) for Renault and PSA and the French market.
- The UK and Europe economies rarely radically diverge - if the UK goes into recession this year, the same forces will also be weighing hard on other major European economies too.

[ToastMan76]

brickwall said:

The dynamics of market optimisation definitely happens - manufacturers will just accept low orders and sales in the UK and won’t resort to discounting if they are managing to flog the factory’s capacity elsewhere.

However
- The UK is a large market for many European manufacturers (2nd largest in Europe for Audi after Germany, and 2.5x the size of the French market). When the UK slows down it’s not like there are loads of markets that can easily absorb the volumes. This dynamic is the same (perhaps even more so) for Renault and PSA and the French market.
- The UK and Europe economies rarely radically diverge - if the UK goes into recession this year, the same forces will also be weighing hard on other major European economies too.

Heres the thing though, in my industry it traditionally followed the same pattern as car manufacturing - focus on volume through factory to keep the lines running at peak capacity (a dead line is lost money). Post-covid, our factories volumes have plummeted with between 20-50% volume reductions. We as a business are able to get them to he increased volume but they simply arent interested, the increase in margins over the past two years means they have no incentive to discount. Instead of short term volume the thinking is now long term profitability, and this is shared across manufacturing bases across Europe and Asia for multiple manufacturers and brands.

I really cant see a return to the volume market share days in a brand oriented segment, especially when the lower margin products are being actively discontinued (Ford Focus)

[Hippea]

Is the M140i/240i in the category that is likely to see a reduction in values in the coming months?

[brickwall]

ToastMan76 said:

brickwall said:

The dynamics of market optimisation definitely happens - manufacturers will just accept low orders and sales in the UK and won’t resort to discounting if they are managing to flog the factory’s capacity elsewhere.

However
- The UK is a large market for many European manufacturers (2nd largest in Europe for Audi after Germany, and 2.5x the size of the French market). When the UK slows down it’s not like there are loads of markets that can easily absorb the volumes. This dynamic is the same (perhaps even more so) for Renault and PSA and the French market.
- The UK and Europe economies rarely radically diverge - if the UK goes into recession this year, the same forces will also be weighing hard on other major European economies too.

Heres the thing though, in my industry it traditionally followed the same pattern as car manufacturing - focus on volume through factory to keep the lines running at peak capacity (a dead line is lost money). Post-covid, our factories volumes have plummeted with between 20-50% volume reductions. We as a business are able to get them to he increased volume but they simply arent interested, the increase in margins over the past two years means they have no incentive to discount. Instead of short term volume the thinking is now long term profitability, and this is shared across manufacturing bases across Europe and Asia for multiple manufacturers and brands.

I really cant see a return to the volume market share days in a brand oriented segment, especially when the lower margin products are being actively discontinued (Ford Focus)

I agree the manufacturers will want to maintain margin and may not chase market share in the same way again.

However long term the pressure to do so will be stronger than ever as the EV world is far more suited to scale
- Very high up front investment (£Bns for a platform)
- Highly modular powertrain and chassis architecture
- Enormous economies of scale on battery production

So they might all say “we will manage for margin, not for volume”, but simultaneously they’re investing gazillions into EV platforms and manufacturing capacity. When the crunch comes you can bet your bottom dollar they’ll take the marginal profit of discounting vs. the losses of leaving it lying unutilised.

[IgnitionMS]

We are downsizing to one car as we both now work from home.

Picking up an approved used BMW 550i (F10) on Monday.

We have most likely paid over the odds and if we are to sell in a years time will lose a tonne in depreciation.

However, with fuel prices the way they are it’s now or never for us to own a V8 and with our annual mileage being about 6k the fuel costs won’t sting that much.

We will probably keep this car until we are forced into something electric.

It all depends on individual circumstances, we would not have purchased this car if we didn’t not intend to keep it for a while, as big engined saloons will most likely take a pummelling come winter.

[Teaspoonasaurous]

Auto810graphy said:

Panameras and other front engine Porsches are an interesting one as like we can see with Cayennes as they get older they start to gain more faults and being out of warranty the parts and repairs can be eye watering so people start to look elsewhere. I have got a client who purchased a 2017 Macan from a car supermarket type outlet and paid a £10k engine repair bill.

Eeep, thats why I'll be getting a full mechanic inspection and diagnostics run before i open my wallet.

[Register1]

MuscleSedan said:

Superflow said:

Pistonheader101 said:

prices don't seem to be dropping. I thought big diesel SUV's would drop off a cliff, but no they haven't.

If you’re in the market call and make some cheeky offers you may surprise yourself.

Discounts are happening on autotrader.It doesn’t matter about supply when there is little demand as we head into recession it is just a matter of time.

That type of car now appears to be creeping down in value. A main dealer I drive past has had a Touareg for months. It has slowly been reduced from £26k+, now at £24k and still there. It shows at under £20k on WBAC.

Got a neighbour with a Q7, chatting the other day she mentioned the current fuel prices and that she had just spent £180 to fill it up again. Is that sustainable for everyone who is doing that ?

Wife has Touareg.
A full tank, lasts 3 weeks.
So really, only £50.00 a week really.
She does drive a bit slower, no more 70 - 75
More like 60 - 65
55 mph gives her 41 mpg, so not all doom and gloom.
Getting to work might take her an extra 5 minutes, thats all.
.
.

[randlemarcus]

Teaspoonasaurous said:

Auto810graphy said:

Panameras and other front engine Porsches are an interesting one as like we can see with Cayennes as they get older they start to gain more faults and being out of warranty the parts and repairs can be eye watering so people start to look elsewhere. I have got a client who purchased a 2017 Macan from a car supermarket type outlet and paid a £10k engine repair bill.

Eeep, thats why I'll be getting a full mechanic inspection and diagnostics run before i open my wallet.

Two handy hints: get Porsche to do a formal 111 point check before purchase. If it's a dealer purchase,and they object, run away. If it's private, they should be happy, if not, saunter away. If it passed, get the bloody warranty.

Leaving aside the restrictions on the warranty, e.g. tyres, mods etc, it's silly cheap for what it covers.

[Pflanzgarten]

randlemarcus said:

Teaspoonasaurous said:

Auto810graphy said:

Panameras and other front engine Porsches are an interesting one as like we can see with Cayennes as they get older they start to gain more faults and being out of warranty the parts and repairs can be eye watering so people start to look elsewhere. I have got a client who purchased a 2017 Macan from a car supermarket type outlet and paid a £10k engine repair bill.

Eeep, thats why I'll be getting a full mechanic inspection and diagnostics run before i open my wallet.

Two handy hints: get Porsche to do a formal 111 point check before purchase. If it's a dealer purchase,and they object, run away. If it's private, they should be happy, if not, saunter away. If it passed, get the bloody warranty.

Leaving aside the restrictions on the warranty, e.g. tyres, mods etc, it's silly cheap for what it covers.

The problem being you cannot put the warranty in place until three months past a change of owner. By which point you'll need to pay for another inspection.

You can go through the rigmarole of getting the existing seller to put one on it but would every seller want to do that?

[Teaspoonasaurous]

Pretty sure you can get day one warranty's on warrantywise. At least with out over examining the fine print that was what I understood.

That was the plan. Full check, interior refresh, and warranty! That three month issue would be a bit of surprise. The car has 3 new tyres on it so that's one thing. It has a solid service history and has never failed an MOT.

Can you point to the 3 months of no cover?

[MrHappy]

Superflow said:

Pistonheader101 said:

prices don't seem to be dropping. I thought big diesel SUV's would drop off a cliff, but no they haven't.

If you’re in the market call and make some cheeky offers you may surprise yourself.

Discounts are happening on autotrader.It doesn’t matter about supply when there is little demand as we head into recession it is just a matter of time.

Sold my 2017 Cayenne V8 diesel to an OPC in March. The WBAC bid was £38,750 at the time. For interests sake I quoted the same car over the weekend and the bid was £32,700.

[samoht]

Teaspoonasaurous said:

Pretty sure you can get day one warranty's on warrantywise. At least with out over examining the fine print that was what I understood.

That was the plan. Full check, interior refresh, and warranty! That three month issue would be a bit of surprise. The car has 3 new tyres on it so that's one thing. It has a solid service history and has never failed an MOT.

Can you point to the 3 months of no cover?

Fairly sure the previous poster was referring to a Porsche Extended warranty, which has this exclusion for the first 90 days

Porsche said:

To be eligible, you must have owned your car for at least 90 days and a 111-point inspection must be carried out on your car by a Porsche Centre

https://files.porsche.com/filestore/download/uk/no...

Generally manufacturer extended warranty schemes have a higher probability of paying out than third-party ones such as the one you mention, which are only really recommendable to retired lawyers who will enjoy carefully reading every word of the T&Cs and then dragging the warranty company through the ombudsman and/or small claims court to get their money.

[Jamescrs]

Hippea said:

Is the M140i/240i in the category that is likely to see a reduction in values in the coming months?

They dripped a couple of thousand a couple of months ago but values since are fluctuating up and down by a few hundred here and there according to the car buying sites.

I own a 240i and was considering trading it in but there's nothing else I want in my price range so I'm set on keeping it another couple of years now.