Secondhand car price crash?

[What The Deuces]

e-honda said:

New car inflation remained a 6.7 % well below inflation, .

Given average total pay (inc bonuses) have inflated at 5.7% then cars are getting more expensive still by the looks of it

[anonymous-user]

According to the Daily Mail prices are still rising, not sure the Mercedes S class is the second biggest riser though.......

https://www.dailymail.co.uk/money/cars/article-118...

[Saweep]

Joey Deacon said:

According to the Daily Mail prices are still rising, not sure the Mercedes S class is the second biggest riser though.......

https://www.dailymail.co.uk/money/cars/article-118...

It is entirely possible that lots of luxury car drivers are considering swapping to something more recession acceptable like an S class.

I'm giving serious thought to swapping to something like that as I'm sure we are in for some tough times and it just looks better to clients and staff etc.

Whether that's enough to push prices up seems a little far fetched though.

Maybe they mean a C class and just got themselves confused.

[Fusion777]

What The Deuces said:

Discounts on inflated rrps and inflated finance rates.

Yet even these discounts weren’t available recently. Cars weren’t in stock, now they are, etc.

[What The Deuces]

Fusion777 said:

What The Deuces said:

Discounts on inflated rrps and inflated finance rates.

Yet even these discounts weren’t available recently. Cars weren’t in stock, now they are, etc.

ONS DATA

Car Price inflation 6.7%

Wage inflation 5.7%

You're claiming cars are getting cheaper?

[av185]

The 'bellweather' of used car supply Motorpoint appear to be around 66% stocked atm compared to only around half that a few weeks back.

[Theoldguard]

Inflation for the most part is being driven on the supply side with shortages, energy and shipping costs.

Energy and fuel prices are falling back, supply chains are improving.

It's difficult to see how prices for many products Inc new cars can remain as high as they are if the input costs start to reduce, energy costs drive up the costs of everything else from a pint in a pub, to food on the shelves to new car prices. There will come a point when offical figures show lower levels of inflation, peoples energy bills will start to lower, food prices will start to fall back and it will be interesting to see what happens with new car prices, if steel prices, battery prices, tyre prices etc all fall back either car manufacturers get greedy and take more profit or adjust their pricing downwards to reflect lower input costs,i think there will be an expectation if alot of other products seem to look cheaper than they once did.

With recent pay rises embedded and now falling energy prices the BoE may need to rise IR further to counter demand side inflation

[Saweep]

Theoldguard said:

Inflation for the most part is being driven on the supply side with shortages, energy and shipping costs.

Energy and fuel prices are falling back, supply chains are improving.

It's difficult to see how prices for many products Inc new cars can remain as high as they are if the input costs start to reduce, energy costs drive up the costs of everything else from a pint in a pub, to food on the shelves to new car prices. There will come a point when offical figures show lower levels of inflation, peoples energy bills will start to lower, food prices will start to fall back and it will be interesting to see what happens with new car prices, if steel prices, battery prices, tyre prices etc all fall back either car manufacturers get greedy and take more profit or adjust their pricing downwards to reflect lower input costs,i think there will be an expectation if alot of other products seem to look cheaper than they once did.

With recent pay rises embedded and now falling energy prices the BoE may need to rise IR further to counter demand side inflation

That seems like wishful thinking to me but I hope you're right!

[Macron]

av185 said:

The 'bellweather' of used car supply Motorpoint appear to be around 66% stocked atm compared to only around half that a few weeks back.

Is that good or bad? As in they can find stuff = good or they can't shift it = bad?

Theoldguard said:

Inflation for the most part is being driven on the supply side with shortages, energy and shipping costs.

I think you missed "and piss taking fking s" from that list, https://www.theguardian.com/business/2023/mar/02/e...

And the overall picture is still a mess. Rate decision tomorrow, they're fans of doing fk all, but may notice some of us get a 10.1% pay rise on our state pensions next month (thanks every one!) which will stoke inflation again. Although leisure activities and discretionary spend have defo been down, bikes aren't selling and idiots who thought lockdown was their new normal overestimated their appeal.

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[Inky81]

Theoldguard said:

Inflation for the most part is being driven on the supply side with shortages, energy and shipping costs.

Energy and fuel prices are falling back, supply chains are improving.

It's difficult to see how prices for many products Inc new cars can remain as high as they are if the input costs start to reduce, energy costs drive up the costs of everything else from a pint in a pub, to food on the shelves to new car prices. There will come a point when offical figures show
lower levels of inflation, peoples energy bills will start to lower, food prices will start to fall back and it will be interesting to see what happens with new car prices, if steel prices, battery prices, tyre prices etc all fall back either car manufacturers get greedy and take more profit or adjust their pricing downwards to reflect lower input costs,i think there will be an expectation if alot of other products seem to look cheaper than they once did.

With recent pay rises embedded and now falling energy prices the BoE may need to rise IR further to counter demand side inflation

Lower levels of inflation is still inflation - i.e. prices are still going up, albeit at a slower rate. For prices to come down across the board you need deflation, which is arguably much worse than inflation in that it can paralyse an economy (people hold off buying today in expectation of it being cheaper tomorrow).

[Macron]

What The Deuces said:

e-honda said:

New car inflation remained a 6.7 % well below inflation, .

Given average total pay (inc bonuses) have inflated at 5.7% then cars are getting more expensive still by the looks of it

If your gross pay went up 5.7% what's the net? Not 5.7%. The drift apart continues for new prices, if indeed its what people are actually paying, per the faux discounts returning we are defo seeing on many cars now.

It is definitely different this time, it really is being very drawn out. We might avoid a technical recession, but when you grew 0% and inflation is 10.4%, even the 0 is a clear misdescription of "not going down", living standards really are...

[What The Deuces]

Inky81 said:

Lower levels of inflation is still inflation - i.e. prices are still going up, albeit at a slower rate. For prices to come down across the board you need deflation, which is arguably much worse than inflation in that it can paralyse an economy (people hold off buying today in expectation of it being cheaper tomorrow).

Exactly, anyone expecting the price of new cars to drop in real terms (like for like) is on crack IMO

The best we can hope for is a number of new manufacturers/models in the market at lower prices like the new MG EV's

[pb8g09]

Inky81 said:

Lower levels of inflation is still inflation - i.e. prices are still going up, albeit at a slower rate. For prices to come down across the board you need deflation, which is arguably much worse than inflation in that it can paralyse an economy (people hold off buying today in expectation of it being cheaper tomorrow).

I’m quite sure this is exactly what is happening in the property market in much of the country at the moment.

I need to relocate in the coming months and I don’t know whether to buy the best house at todays price or hang it out until the end of the year and see if there’s anything better value.

[nickfrog]

Theoldguard said:

Energy and fuel prices are falling back, supply chains are improving.
(...)
energy bills will start to lower, food prices will start to fall back

Sounds like more disposable income and higher consumer confidence, perhaps the resulting increase in demand will absorb the increase in supply?

Theoldguard said:

With recent pay rises embedded and now falling energy prices the BoE may need to rise IR further to counter demand side inflation

If IR rise then car costs will increase as the CAPEX will be higher and the cost of financing will be higher, whether apparent or embedded in the price.

[What The Deuces]

nickfrog said:

If IR rise then car costs will increase as the CAPEX will be higher and the cost of financing will be higher, whether apparent or embedded in the price.

Its amusing that some commentators seem to think automotive manufacturers and supply chain are immune from interest rate rises.

One thing that may play well with an increased base rate is that the value of the pound should increase and make imports cheaper.

[nickfrog]

What The Deuces said:

One thing that may play well with an increased base rate is that the value of the pound should increase and make imports cheaper.

True, assuming that competing CBs don't mirror our own IR uplifts. In the past 12 months alone £ has lost 6% of its value against the €.

[Saweep]

nickfrog said:

What The Deuces said:

One thing that may play well with an increased base rate is that the value of the pound should increase and make imports cheaper.

True, assuming that competing CBs don't mirror our own IR uplifts. In the past 12 months alone £ has lost 6% of its value against the €.

We are all (BOE and ECB) just mirroring the Fed, surely?

[Vtecyo23]

Any views on which brands have the more plentiful stock? From what I can tell Honda and Toyota are still very constrained. Volvo also seem to still have 9 month lead times on most of their cars. Is it mainly the VAG group brands that are emerging quickest from this malaise?

[nickfrog]

Saweep said:

We are all (BOE and ECB) just mirroring the Fed, surely?

They are certainly working in sync and with similar targets. Hence the fact that I doubt £ can dramatically recover for now unless we have higher rate increases than them.

[anonymous-user]

Vtecyo23 said:

Any views on which brands have the more plentiful stock? From what I can tell Honda and Toyota are still very constrained. Volvo also seem to still have 9 month lead times on most of their cars. Is it mainly the VAG group brands that are emerging quickest from this malaise?

That is strange as when I was looking for a brand new car back in 2019 VAG had by far the longest lead times. Even then you were quoted six months, but the reality was it would not even be accepted by the factory by then.

When I looked at Honda, they had 11 cars in the country in the spec I was interested in and could get me one in under two weeks.