When will used car prices drop?

When will used car prices drop?

Author
Discussion

Trgasy

143 posts

84 months

Friday 17th April 2020
quotequote all
one thing is sure, there is a massive spike in unemployment. not all of them will get their job back. Compound that with Brexit uncertainty (get it done or don't ever do it but they should be clear!) then you have a quite scary picture.

Andyoz

2,887 posts

54 months

Friday 17th April 2020
quotequote all
Spy said:
Many share prices dropped but many have recovered to post covid levels and we are not out of lockdown yet. Surprising
The Share market isn't the economy.

Spy

1,304 posts

207 months

Friday 17th April 2020
quotequote all
Andyoz said:
The Share market isn't the economy.
Not saying it is. Just an example of an asset people buy that you would think would be generally cheap right now, given uncertainty around jobs, the economy and brexit. Wouldn't be surprising if used cars also recovered quickly post lockdown.

Edited by Spy on Friday 17th April 14:32

Andyoz

2,887 posts

54 months

Friday 17th April 2020
quotequote all
Spy said:
Not saying it is. Just an example of an asset people buy that you would think would be generally cheap right now
Agree, but we have seen unprecedented interventions that may be storing up a sting in the tail later. Historically, it is not unusual to have bounce backs and the true lows may have yet to be tested. We are barely 2 months into this massive event.

Cheib

23,245 posts

175 months

Friday 17th April 2020
quotequote all
Spy said:
I am not sure. I think there may be a spike in used car prices post lockdown for the following reasons:

1) There will be many people who were previously in the market for a car and are now waiting for the lockdown to finish
Some may rethink their economic situation but others who are still employed and have cash in the bank, will want to still buy.
Remember, with the lockdown, many people have lower outgoings

2) No new car orders during lockdown means a lower stock of part ex cars flowing into dealerships over the first month or two post lockdown

3) Used car dealers will be desperate for stock as soon as the lockdown is over. The start of the pandemic coincided with the normal buying cycle of the used dealers as they were coming out of Xmas/Winter, leaving them short of stock but rich in cash.

My prediction would be a price spike in used cars for a short period after lockdown whilst the market corrects itself.
Like cmoose I’d be stunned if we see a spike.

I think used car dealers will be desperate to generate some cash post lockdown....they will have costs that have been rolling up even with govt grants etc so I think would be looking to convert existing stock into a healthier balance sheet intitally.

With regards to a lack of new car orders and lower stock of part ex. Porsche didn’t make any cars for a good amount of time in 2018 due to reconfiguring the factory....used car prices were not particularly firm and nor did dealers have nine month waiting lists for new cars when the factory started production again.

I don’t see people rushing out to buy cars...there will be the YOLO/FOMO factor for some....but there will be a lot more worried about their job or the business they own.

tedblog

1,438 posts

80 months

Friday 17th April 2020
quotequote all
Porsche911R said:
both rubbish imo !

A lot of shares have just about recovered 2/3rd of what the scare drop was on the 23th march , some are more than pre covid ! but most are now 15% down not 30%

house market to drop by a sixth !!

builders shares are going up every day, we have a housing shortage and they expect people to back to work building in 3 weeks. A strong buy atm.

be no house price drops, there are none for sale !

who are they ? this generation to recover people ?

as for peoples money the leisure staff who got laid off did not want to pick fruit did they ? most are at home on 80% wage !!

HIGH TAX, VAT might go up, they cannot put Tax up that quick due to the bounce back recovery period. As you said no money about !


EU is in trouble, bigger debt and most don't put in only take out !!!

Germany don't want to bail the whole EU out !!

so £ should rise pretty well.



Edited by Porsche911R on Friday 17th April 09:00
As you said imo? The 80% is only for 3 months and its a well known fact the government cant afford to continue after that.


Edited by tedblog on Friday 17th April 16:47

tedblog

1,438 posts

80 months

Friday 17th April 2020
quotequote all
anonymous said:
[redacted]
It wont be lifted on the 7th as the new Italy and China cases have put a dampner on that option.

Twinfan

10,125 posts

104 months

Friday 17th April 2020
quotequote all
Lifting will start by 14th May at the latest IMHO.

tokyotv

258 posts

128 months

Friday 17th April 2020
quotequote all
tedblog said:
As you said imo? The 80% is only for 3 months and its a well known fact the government cant afford to continue after that.


Edited by tedblog on Friday 17th April 16:47
They just extended it to June!!!

Think I will buy my Carrera T in July then :-)

tedblog

1,438 posts

80 months

Friday 17th April 2020
quotequote all
tokyotv said:
They just extended it to June!!!

Think I will buy my Carrera T in July then :-)
That just highlights how long lockdown will be then? Furlough scheme could cost £40 billion in three months its shocking the figures banded around, the Government are paying over the odds for work and goods as well.





Edited by tedblog on Friday 17th April 17:33

av185

18,514 posts

127 months

Friday 17th April 2020
quotequote all
Cheib said:
Like cmoose I’d be stunned if we see a spike.

I think used car dealers will be desperate to generate some cash post lockdown....they will have costs that have been rolling up even with govt grants etc so I think would be looking to convert existing stock into a healthier balance sheet intitally.
All very well C but dealers won't sell at what many are hoping for 'knockdown prices' if they cannot replace used stock at substantially cheaper prices and thus far this isn't happening.

Much of BCA stock is at online buy now prices and these holding close to CAP clean and selling at that too proving stock is selling at not far from book ££.

tedblog

1,438 posts

80 months

Friday 17th April 2020
quotequote all
anonymous said:
[redacted]
The factories that make building materials are all closed or on limited staff, all building work has been suspended due to lack of materials so why on earth put your money into a company that isnt building anything?

Fezzaman

552 posts

193 months

Friday 17th April 2020
quotequote all
av185 said:
Cheib said:
Like cmoose I’d be stunned if we see a spike.

I think used car dealers will be desperate to generate some cash post lockdown....they will have costs that have been rolling up even with govt grants etc so I think would be looking to convert existing stock into a healthier balance sheet intitally.
All very well C but dealers won't sell at what many are hoping for 'knockdown prices' if they cannot replace used stock at substantially cheaper prices and thus far this isn't happening.

Much of BCA stock is at online buy now prices and these holding close to CAP clean and selling at that too proving stock is selling at not far from book ££.
Surely dealers are only going to bother replacing existing used stock based on revised expectations of demand for used cars? Given the economic fallout that can be expected to unfold, if and once a dealer has sold off stock on hand (and in doing so they are going to see first hand how long it takes, who is buying, what kind of stuff they're buying and what price level the market is willing to accept and thereby determine demand) why stock up again to pre-covid levels with the same kind of stock? Traders are going to have to adapt. Let's say pre-Covid an individual OPC stock profile was 40% Cayennes & Macans, 10% Panameras, 25% Cayster, 25% 911 across a total volume of 50 cars with an expected turnover rate of x cars a month.

OPCs can keep their prices the same and see who bites across the stock but if x is through the floor, they're not in any rush to replenish back to 50 (with associated stocking costs, prep etc). And even then, if pre-covid 40% of used sales were going to Cayenne/Macan but post-Covid the only people buying are powerfully built company directors wanting a 718 (as they don't want to be seen splashing the cash on a 911), their stock mix is going to have to change and the stuff that's not in favour will have to go at least for the cash flow.

tedblog

1,438 posts

80 months

Friday 17th April 2020
quotequote all
At the moment its being controlled by lockdown, their is no cure or vacination for it at present and people are scared it will flare up again , its scary times for everyone, i really think people will hold back for a fair few months or even the year.

Andyoz

2,887 posts

54 months

Saturday 18th April 2020
quotequote all
anonymous said:
[redacted]
Exactly, and wages are only one part of a businesses expenses. Also things like VAT have only been deferred ...they still have to pay it sometime later. As though businesses will magically be flush with cash in 6 months.

Lots of entities are going to fall through the cracks anyway...one man band Ltd Co's for a start

Many businesses have already taken a hiding because of Brexit political debacle. This thing has hit the world at a time when individuals and businesses have never been so leveraged.

It's also a worldwide issue so there are no safe havens.

Robbo66

3,833 posts

233 months

Saturday 18th April 2020
quotequote all
Spike ?....seriously ?...

There will be the mother of all recessions, possibly leading to depression following this with massive unemployment and business liquidation. All asset classes will be hit, none more so than over leveraged automotive trinkets.

Regardless if lockdown is lifted, lack of confidence in the market will absolutely muller values across every brand, at a level we’ve not experienced since the 80’s.

Prices are holding firm at moment, as no point in dropping them. No one is buying...wait for the proverbial to hit the fan once we start to unlock.

Additionally, to be seen cutting about in a modern trinket during and immediately following this, is something personally I couldn’t be more uncomfortable with.





roca1976

566 posts

115 months

Saturday 18th April 2020
quotequote all
I keep a close eye on the €20-60k market on mobile.de and Europe are not dropping advertised prices. Whether there are behind closed door actual sale prices I don't know!

With a global showroom I wonder if it will be a case of who blinks first.

Twinfan

10,125 posts

104 months

Saturday 18th April 2020
quotequote all
Robbo66 said:
Additionally, to be seen cutting about in a modern trinket during and immediately following this, is something personally I couldn’t be more uncomfortable with.
For some of us our cars aren't "modern trinkets" but our one and only method of personal transport.

If other people have a problem with my choice of car that's their issue, not mine.

Cheib

23,245 posts

175 months

Saturday 18th April 2020
quotequote all
av185 said:
Cheib said:
Like cmoose I’d be stunned if we see a spike.

I think used car dealers will be desperate to generate some cash post lockdown....they will have costs that have been rolling up even with govt grants etc so I think would be looking to convert existing stock into a healthier balance sheet intitally.
All very well C but dealers won't sell at what many are hoping for 'knockdown prices' if they cannot replace used stock at substantially cheaper prices and thus far this isn't happening.

Much of BCA stock is at online buy now prices and these holding close to CAP clean and selling at that too proving stock is selling at not far from book ££.
I honestly don’t think a lot of dealers are going to be in charge of their own destiny financially over the next three to six months (like many businesses)....unless dealers have kept a very healthy balance sheet and have three months of OPEX sat in the bank account or a bank giving them an overdraft. I think some dealers will be forced to sell cars to generate cash to settle invoices/pay salaries. I don’t think being able to replace stock is going to be the consideration.



Porsche911R

21,146 posts

265 months

Saturday 18th April 2020
quotequote all
Robbo66 said:
Spike ?....seriously ?...

There will be the mother of all recessions, possibly leading to depression following this with massive unemployment and business liquidation. All asset classes will be hit, none more so than over leveraged automotive trinkets.

Regardless if lockdown is lifted, lack of confidence in the market will absolutely muller values across every brand, at a level we’ve not experienced since the 80’s.

Prices are holding firm at moment, as no point in dropping them. No one is buying...wait for the proverbial to hit the fan once we start to unlock.

Additionally, to be seen cutting about in a modern trinket during and immediately following this, is something personally I couldn’t be more uncomfortable with.
markets strong imo, too much scare stories. Ave person is also on 80% wage and not spending money so better off !

this is nothing like the 80's and this has had global world wide money pumped into it daily for this very reason.

Business/people want to go back to work and make money.

EU might fair worse who knows.

As for not driving your car lol get real.

what it needs is for people to PAY the real cost of living and TAX, ban dividends wages !! and put VAT up.
Ban PCP's also in fact ban any sort of balloon loan.

People have been living like kings on some one else money for too long a debt society at every level !
Now every one wants a bail out !

House shortage still happening, business will go back to normal imho.

They won't ban the dividends TAX dodge though.

when I was a kid you were lucky to see a nice car, my 1st car was £1600, now 17 year olds drive about in £50k cars and above that people rent £300k cars ! it's daft. This has to stop imo.


" the amounts owed by British households rose to a combined £428bn in the third quarter of 2018 - equivalent to £15,385 per home. "

If the virus stops this going forward it's a good thing.

I lived though 87 and 2008, it made no odds my house dropped in price in 87 , so what. I owned my car and did not change it, again so what.

people need to go back to buying what they can afford imho.

Edited by Porsche911R on Saturday 18th April 10:49