Secondhand car price crash?

[Al U]

Had a bit of a tidy at the weekend and found the purchase paperwork for the wife's Astra.

It's a 2016 (66) Elite Nav Diesel (so top spec) that we bought in December 2017 with around 15k miles on it. We paid £12000 for it from a Vauxhall main dealer.

Considering it was only a couple of years into the product lifecycle at that time as well it really made me realise just how stupid prices are at the moment across the board.

To think that 5 years ago you could buy a 1 year old well spec'd cooking family hatchback from a main dealer with low mileage for £12k, looking at the same car which is at the end of it's product lifecycle but today the lowest you could pay for one that's 2 years old is £15k. Just crazy really.

Edited by Al U on Tuesday 28th June 07:11

[brickwall]

Al U said:

Had a bit of a tidy at the weekend and found the purchase paperwork for the wife's Astra.

It's a 2016 (66) Elite Nav Diesel (so top spec) that we bought in December 2017 with around 15k miles on it. We paid £12000 for it from a Vauxhall main dealer.

Considering it was only a couple of years into the product lifecycle at that time as well it really made me realise just how stupid prices are at the moment across the board.

To think that 5 years ago you could buy a 1 year old well spec'd cooking family hatchback from a main dealer with low mileage for £12k, looking at the same car which is at the end of it's product lifecycle but today the lowest you could pay for one that's 2 years old is £15k. Just crazy really.

Edited by Al U on Tuesday 28th June 07:11

When it does correct (eventually) there will be a steep drop.

I bought my M140i in Feb 2019 from a main dealer at 4 months old with 4k on the clock for £25.5k. They were discounting new ones to £30k at the time.

Today equivalent cars to mine are being listed on Autotrader for…£25.5k.

Let’s say in 2 years prices correct and it’s worth £13k. Theoretically over the next 2 years I’ll suffer £12.5k depreciation, but actually it’ll be £12.5k over 5 years, which is what it should have been all along.

I could trade in now and ‘bank’ 3.5 years of depreciation-free motoring, but all that’ll happen is I’ll buy a new car at (say) £50k list, and lose £20k on it instead when prices correct.

[Throttlebody]

Latest from CAP HPI, used car prices dropped 0.9% in June.

A consistent decline is developing.

[Superflow]

Throttlebody said:

Latest from CAP HPI, used car prices dropped 0.9% in June.

A consistent decline is developing.

Yep.

Only going one way now for mainstream.

[Hippea]

Jamescrs said:

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.

Sold my WRX STi last year as I was offered silly money, I’ve been knocking around in a Aygo since then. Trying to work out when to buy something interesting again. The Aygo is soul destroying but is costing me nothing, I’m willing to wait longer if things are likely to dip, I don’t want to be bitten.

[mattyprice4004]

Register1 said:

Wife is interested in buying a MG ZS EV.
Could be new, or good value used.
Must be white

I don't believe she wants all the bells and whistles, so even a lowerspec would see her spending money.

Then again, she is unsure if to "Lease - Buy" by paying a balloon payment, and keep the car at end of lease.

Any ideas chaps ?

Edited by Register1 on Thursday 23 June 19:34

I’d go new for one of these - full 7 year warranty backup and some great deals on them.
Find your local MG dealer and pop in for a chat, we work with a lot of them and MG basically set the pricing across the board so there’s not much point shopping around to the usual extent.

Surprisingly cheap, and even more surprising was that I didn’t hate the one I drove!

[Teaspoonasaurous]

Hippea said:

Sold my WRX STi last year as I was offered silly money, I’ve been knocking around in a Aygo since then. Trying to work out when to buy something interesting again. The Aygo is soul destroying but is costing me nothing, I’m willing to wait longer if things are likely to dip, I don’t want to be bitten.

This is the big question. How long do you wait it out. I am tempted to put purchase on ice for another 1 - 2 months unless there's something comes along that is perfect.

[Pistonheader101]

brickwall said:

Al U said:

Had a bit of a tidy at the weekend and found the purchase paperwork for the wife's Astra.

It's a 2016 (66) Elite Nav Diesel (so top spec) that we bought in December 2017 with around 15k miles on it. We paid £12000 for it from a Vauxhall main dealer.

Considering it was only a couple of years into the product lifecycle at that time as well it really made me realise just how stupid prices are at the moment across the board.

To think that 5 years ago you could buy a 1 year old well spec'd cooking family hatchback from a main dealer with low mileage for £12k, looking at the same car which is at the end of it's product lifecycle but today the lowest you could pay for one that's 2 years old is £15k. Just crazy really.

Edited by Al U on Tuesday 28th June 07:11

When it does correct (eventually) there will be a steep drop.

I bought my M140i in Feb 2019 from a main dealer at 4 months old with 4k on the clock for £25.5k. They were discounting new ones to £30k at the time.

Today equivalent cars to mine are being listed on Autotrader for…£25.5k.

Let’s say in 2 years prices correct and it’s worth £13k. Theoretically over the next 2 years I’ll suffer £12.5k depreciation, but actually it’ll be £12.5k over 5 years, which is what it should have been all along.

I could trade in now and ‘bank’ 3.5 years of depreciation-free motoring, but all that’ll happen is I’ll buy a new car at (say) £50k list, and lose £20k on it instead when prices correct.

they just won't drop that hard. new ones simply don't discount to 30k anymore, more likely 42k.

[Al U]

Pistonheader101 said:

they just won't drop that hard. new ones simply don't discount to 30k anymore, more likely 42k.

I'm unfortunately inclined to agree. I do think that over the rest of the year that prices will come down as budgets get squeezed further, December and January usually being the best months to get a deal may be more true this time than usual. That's what I am hoping anyway as I won't be able to wait any longer than that.

One reason I don't think we will get back to pre-covid prices is that we have all seen car prices high for a year now and when dealers do start reducing things a lot of people will see the reduction against the already inflated prices and think it's a good enough "deal" despite still being expensive if you are comparing with pre-covid prices.

[malaccamax]

Don't think prices will fall that fast given supply was and is still constricted. There's what, a million cars that haven't been sold since the start of Covid that would have been under normal circs?
A million-car hole in the used market is going to have a real impact and continue to do so for some years yet.

[ToastMan76]

My WBAC has increased +£1k this month with 1k extra mileage. Good news for me since the lease is taking forever to arrive!

[Hippea]

Teaspoonasaurous said:

Hippea said:

Sold my WRX STi last year as I was offered silly money, I’ve been knocking around in a Aygo since then. Trying to work out when to buy something interesting again. The Aygo is soul destroying but is costing me nothing, I’m willing to wait longer if things are likely to dip, I don’t want to be bitten.

This is the big question. How long do you wait it out. I am tempted to put purchase on ice for another 1 - 2 months unless there's something comes along that is perfect.

I’m probably willing to hold out until next year, but I will be very annoyed with myself if things don’t dip in that time

[brickwall]

Pistonheader101 said:

brickwall said:

Al U said:

Had a bit of a tidy at the weekend and found the purchase paperwork for the wife's Astra.

It's a 2016 (66) Elite Nav Diesel (so top spec) that we bought in December 2017 with around 15k miles on it. We paid £12000 for it from a Vauxhall main dealer.

Considering it was only a couple of years into the product lifecycle at that time as well it really made me realise just how stupid prices are at the moment across the board.

To think that 5 years ago you could buy a 1 year old well spec'd cooking family hatchback from a main dealer with low mileage for £12k, looking at the same car which is at the end of it's product lifecycle but today the lowest you could pay for one that's 2 years old is £15k. Just crazy really.

Edited by Al U on Tuesday 28th June 07:11

When it does correct (eventually) there will be a steep drop.

I bought my M140i in Feb 2019 from a main dealer at 4 months old with 4k on the clock for £25.5k. They were discounting new ones to £30k at the time.

Today equivalent cars to mine are being listed on Autotrader for…£25.5k.

Let’s say in 2 years prices correct and it’s worth £13k. Theoretically over the next 2 years I’ll suffer £12.5k depreciation, but actually it’ll be £12.5k over 5 years, which is what it should have been all along.

I could trade in now and ‘bank’ 3.5 years of depreciation-free motoring, but all that’ll happen is I’ll buy a new car at (say) £50k list, and lose £20k on it instead when prices correct.

they just won't drop that hard. new ones simply don't discount to 30k anymore, more likely 42k.

This is the central question though.
I agree - if the new ones aren’t discounted as far as pre-covid then the used prices will stay higher.

However if we find ourselves in a global recession and new supply ramping up, then manufacturers may find themselves needing to discount heavily to shift the volume.

If they find themselves with surplus supply, I can’t see them choosing to hold price and sacrifice volume.

It all comes down to
- How long does it take for the supply chain crisis to ease
- How much pent up demand is there waiting for new supply, and how long does it take to work through
- Do we enter global recession (or at least, Europe + US recession), and if so how deep and how long does it last
(- How far are manufacturers prepared to discount to shift any surplus stock, and what’s their mechanism for doing so)

[Auto810graphy]

brickwall said:

When it does correct (eventually) there will be a steep drop.

I bought my M140i in Feb 2019 from a main dealer at 4 months old with 4k on the clock for £25.5k. They were discounting new ones to £30k at the time.

Today equivalent cars to mine are being listed on Autotrader for…£25.5k.

Let’s say in 2 years prices correct and it’s worth £13k. Theoretically over the next 2 years I’ll suffer £12.5k depreciation, but actually it’ll be £12.5k over 5 years, which is what it should have been all along.

I could trade in now and ‘bank’ 3.5 years of depreciation-free motoring, but all that’ll happen is I’ll buy a new car at (say) £50k list, and lose £20k on it instead when prices correct.

The M140i has a bit of a following, potentially a future classic as they are the last of the 6 cylinder small BMWs and like most current classic hot hatches, many are modified and crashed so decent ones are getting harder to find.

In early 2019 they got as low as £25k for a pre reg non Shadow Edition 5 door auto and those car are worth the same three years later.

[Theoldguard]

Al U said:

I'm unfortunately inclined to agree. I do think that over the rest of the year that prices will come down as budgets get squeezed further, December and January usually being the best months to get a deal may be more true this time than usual. That's what I am hoping anyway as I won't be able to wait any longer than that.

One reason I don't think we will get back to pre-covid prices is that we have all seen car prices high for a year now and when dealers do start reducing things a lot of people will see the reduction against the already inflated prices and think it's a good enough "deal" despite still being expensive if you are comparing with pre-covid prices.

Only those who have needed to replace or just been looking the past 12mths will have any idea the price of cars now.

There are lots of people out there on 2-3 even 4 year pcp or pch deals that will be pretty oblivious to what has been going on with prices..

Prices only started getting silly 12-14 mths ago, so many will be in for a shock when they come to renew their finance deal or need to replace their used car, many are right on the limit what they pay now, a 10-20% increase on what they paid last time in the current climate just aint happening.

Thats why I don't these prices are sustainable long term, its a spike / bubble call it what you want, its going to correct itself otherwise sales are going to fall through the floor, dealers can still make sales if they are as attractive as they previously were.

Higher input costs have led to the price of new vehicles increasing, these are real costs that manufacturer's have passed on to customers, once these ease back so will the price of new cars, once supply is back up so will the price of used fall.

[fridaypassion]

Theoldguard said:

Only those who have needed to replace or just been looking the past 12mths will have any idea the price of cars now.

There are lots of people out there on 2-3 even 4 year pcp or pch deals that will be pretty oblivious to what has been going on with prices..

Prices only started getting silly 12-14 mths ago, so many will be in for a shock when they come to renew their finance deal or need to replace their used car, many are right on the limit what they pay now, a 10-20% increase on what they paid last time in the current climate just aint happening.

Thats why I don't these prices are sustainable long term, its a spike / bubble call it what you want, its going to correct itself otherwise sales are going to fall through the floor, dealers can still make sales if they are as attractive as they previously were.

Higher input costs have led to the price of new vehicles increasing, these are real costs that manufacturer's have passed on to customers, once these ease back so will the price of new cars, once supply is back up so will the price of used fall.

Most finance providers have put rates up by 1% this year too with no doubt more to follow this will have a big effect on values. As has been said in this thread before its literally just the supply issues that are propping the market up at the moment. The underlying state of the used market is not good at the moment at all.

The era of cheap money is slowly coming to an end. There a way to go yet but people will be crippled with mortgage payments so the car is an easy thing to cut back on. Out with the German stuff in with a Hyundai...

[Al U]

fridaypassion said:

Out with the German stuff in with a Hyundai...

I think that's already a thing to be honest, you don't have to go far these days to see a new Hyundai or Kia on the road in front of you.

[griffter]

brickwall said:

This is the central question though.
I agree - if the new ones aren’t discounted as far as pre-covid then the used prices will stay higher.

However if we find ourselves in a global recession and new supply ramping up, then manufacturers may find themselves needing to discount heavily to shift the volume.

If they find themselves with surplus supply, I can’t see them choosing to hold price and sacrifice volume.

It all comes down to
- How long does it take for the supply chain crisis to ease
- How much pent up demand is there waiting for new supply, and how long does it take to work through
- Do we enter global recession (or at least, Europe + US recession), and if so how deep and how long does it last
(- How far are manufacturers prepared to discount to shift any surplus stock, and what’s their mechanism for doing so)

These global issues are probably the most relevant. But in the UK we now have summer where many people will have other things to spend their time and money on, and then a new reg plate in Sept. I suspect these will exert downwards rather than upwards pressure on UK used prices.
I think autumn winter will see the dip deepen.

[TheGreatDane]

Not a price drop per se, but on all the M car groups I'm on there has definitely been an uptick in the number of cars being listed.

Used to be maybe 5-6 a week and recently its been nearer to 3 or so a day.

[IgnitionMS]

TheGreatDane said:

Not a price drop per se, but on all the M car groups I'm on there has definitely been an uptick in the number of cars being listed.

Used to be maybe 5-6 a week and recently its been nearer to 3 or so a day.

I’ve noticed this on Autotrader with F10/F12 M5/M6