Not much seems to selling right now?
Discussion
I have a couple of trader friends who deal in the mid to high end motors and they have been saying that the volume of sales has dipped significantly over the past year.
The price of 2nd hand performance cars seems to have reached its peak and there is no market demand to cause them to go any higher.
Once this happens then there is a market forcing that will push values downward as many buyers realise what they are about to buy is very likely to not give them a positive return.
The value of 2nd hand performance cars is largely dependant on people trading up. But the problem that has arisen (which was always going to happen at some point during this bubble) is that the gap (in terms of wealth) to jump from one rung of the ladder to the next has become too large and there is now very little market to favour the supply/demand balance to push prices up any more.
Couple this with secondary factors such as an increase in interest rates (with more soon to come), albeit not very large increases, it seems this is already enough to get people thinking about turning away from assets and back in to financial products for their investments.
I'm not saying this with any anti-bubble vested interest as I am looking to sell my McLaren 12C this summer time, and although since buying it over 2 years ago, it would seemingly have lost little value, it will however start to now be on a downward trend with little interest at current sale prices.
But this in my view is a 'swings and roundabout' type of affair, if my 12C is to lose value due to market forces, then so will many other cars (not all I accept),.... so the overall 'loss' shouldn't be too bad..... as I am looking to replace it and not simply sell up for cash.
The price of 2nd hand performance cars seems to have reached its peak and there is no market demand to cause them to go any higher.
Once this happens then there is a market forcing that will push values downward as many buyers realise what they are about to buy is very likely to not give them a positive return.
The value of 2nd hand performance cars is largely dependant on people trading up. But the problem that has arisen (which was always going to happen at some point during this bubble) is that the gap (in terms of wealth) to jump from one rung of the ladder to the next has become too large and there is now very little market to favour the supply/demand balance to push prices up any more.
Couple this with secondary factors such as an increase in interest rates (with more soon to come), albeit not very large increases, it seems this is already enough to get people thinking about turning away from assets and back in to financial products for their investments.
I'm not saying this with any anti-bubble vested interest as I am looking to sell my McLaren 12C this summer time, and although since buying it over 2 years ago, it would seemingly have lost little value, it will however start to now be on a downward trend with little interest at current sale prices.
But this in my view is a 'swings and roundabout' type of affair, if my 12C is to lose value due to market forces, then so will many other cars (not all I accept),.... so the overall 'loss' shouldn't be too bad..... as I am looking to replace it and not simply sell up for cash.
Strange one at the moment. When I have tried to sell a couple of my car to dealers, they have been low balling me pleading poverty and as usual not bothered about my cars mechanical or cosmetic condition. However when I have tried to buy cars they have not been budging on the price and then have seen the cars sitting there since summer with the price lower than my offers.lol
Younez said:
Strange one at the moment. When I have tried to sell a couple of my car to dealers, they have been low balling me pleading poverty and as usual not bothered about my cars mechanical or cosmetic condition. However when I have tried to buy cars they have not been budging on the price and then have seen the cars sitting there since summer with the price lower than my offers.lol
I emailed a dealer about a f10 m5 in the 3rd week of February , they sent me a video of the car and repeatedly mentioned that they had a lot of interest in the car and confirmed via email that they would absolutely not be discounting the car ( all I told then was that I had a budget of £50000) 1 month later they dropped it from £52480 to £51980 3 weeks after that another £1000 to £49980.
I'd of ( at the time ) paid £51,500 when I initially enquired ! But they didn't even entertain any negotiations .
Cosworth4388 said:
But they didn't even entertain any negotiations .
Not to be too hard on dealers, as we all have to make our money somehow; I think there is a large amount of denial from them that the bubble is bursting or has burst already.I am likening it to the way that property owners refuse to lower rental prices and would rather lose out on large amounts of money than appear to be devalue their assets.
The problem is that if they are to play that game it is a short life gamble, as prices of cars are evidently coming down (the market reasons don't suggest it is a simple 'rest period'), and as such their stock is not going to give them anywhere near the return they would want.
So for potential buyers, I am getting messages to simply hold on to your money and be patient.
monthefish said:
If you're saying they're in denial, can you put forward your case for the contrary?
Surely that should be "put forward your case to support", rather than "the contrary" ?Anyways, as I mentioned in the previous post I have a few dealer friends who I've known for a long time. They are a bit old school and tell things bluntly how they are.
I take their comments with a great deal of respect as they have been in the business for a long time and they know their game.
I am hearing that the market is such that one of the main factors of mid to higher end performance car sales is from people 'trading up', and that the amount of wealth now required to jump from one level of performance car to the next is now well beyond the reach of those customers, they say this is was always going to be a result if prices kept rising like they have done over the past 8 years or so.
Basically the higher the rung of the ladder, the higher the price increase that has taken place over the past number years, which increases the gap between the jumps to a more limited end of the market.
This limited end of the market has now become so thin that they say this has now effectively halted the price rises for many performance cars as many can no longer afford them.
Add with the recent interest rate increase with more to come, people could be seemingly happy to turn away from buying cars as a no loss return and go back to financial products.
They ended up saying that the majority of dealers will now play a short waiting game and hold prices of their stock at current levels to ride out the 'calm' period and attempt to not lose out on money that was paid out on that stock.
>This is where the element of denial comes in to play. There will be some dealers who refuse to advertise that the market forces are changing and will continue to promote the idea that what you buy now is going to be an investment. This is of course a well played out sales practice. So there will be dealers who will act similar to how I described many property owners do, in that they continue to hold stock prices at current levels even if that doesn't generate any sales in order to promote a consensus that their assets are not devaluing. And I guess if every dealer in the country did this then prices wouldn't be able to fall. But like I say, dealers have to make money and they will have to reduce otherwise their overheads and costs will catch up with them and they'll go bust..<
As the market turns and values fall, their new stock will be bought with the adjustment factored in.
I will fully admit that I am basically paraphrasing sentiments from conversations (I am not a car dealer) but equally I have no vested interest either way to be honest.
As also mentioned I will be looking to sell my 12C this summer time and of course I would hope to get top price for it, but realistically if the market is turning then I'll have to suck it up and let it go for a more realistic price.
I have to say, I agree with a lot of what Atomic12C says above, however, I’ve seen a lot of dealers with stock holding of certain marques appearing to persistently continue to deflate their retail prices due to the length of time in holding said stock (awful winter etc. apply extra pressure).
This is then being factored in to growing differences between Trade and Retail prices having more risk built in. I think it’s this side of the market that is creating the vacuum in ‘trading up’.
Whilst there are some that this may be a mere sniff to, I’m by no means as wealthy as some that venture these forums, so when I had a recent part-ex bid from a main dealer that suggests a £45k loss in 12 months and 3k miles between what I paid, I pulled out.
I can’t be the only one that shys away from throwing more good money after bad to get out and ‘trade up’ in accepting that offer, when I’ve got an immaculate and awesome car to drive anyway, and no real need to change beyond pure inquisitiveness...
It just becomes a simple value for money equation between what you’ve got (X) and what you’re speculating to purchase (Y), versus how much you REALLY want to change (Z). If the cost of change is less than how much you WANT/NEED to change, you’ll always find a way to justify it to yourself. Perhaps it is no more complex than the man maths are beginning to not equate quite as well as they previously have been!
This is then being factored in to growing differences between Trade and Retail prices having more risk built in. I think it’s this side of the market that is creating the vacuum in ‘trading up’.
Whilst there are some that this may be a mere sniff to, I’m by no means as wealthy as some that venture these forums, so when I had a recent part-ex bid from a main dealer that suggests a £45k loss in 12 months and 3k miles between what I paid, I pulled out.
I can’t be the only one that shys away from throwing more good money after bad to get out and ‘trade up’ in accepting that offer, when I’ve got an immaculate and awesome car to drive anyway, and no real need to change beyond pure inquisitiveness...
It just becomes a simple value for money equation between what you’ve got (X) and what you’re speculating to purchase (Y), versus how much you REALLY want to change (Z). If the cost of change is less than how much you WANT/NEED to change, you’ll always find a way to justify it to yourself. Perhaps it is no more complex than the man maths are beginning to not equate quite as well as they previously have been!
Atomic12C said:
monthefish said:
If you're saying they're in denial, can you put forward your case for the contrary?
Surely that should be "put forward your case to support", rather than "the contrary" ?Anyways, as I mentioned in the previous post I have a few dealer friends who I've known for a long time. They are a bit old school and tell things bluntly how they are.
I take their comments with a great deal of respect as they have been in the business for a long time and they know their game.
I am hearing that the market is such that one of the main factors of mid to higher end performance car sales is from people 'trading up', and that the amount of wealth now required to jump from one level of performance car to the next is now well beyond the reach of those customers, they say this is was always going to be a result if prices kept rising like they have done over the past 8 years or so.
Basically the higher the rung of the ladder, the higher the price increase that has taken place over the past number years, which increases the gap between the jumps to a more limited end of the market.
This limited end of the market has now become so thin that they say this has now effectively halted the price rises for many performance cars as many can no longer afford them.
Add with the recent interest rate increase with more to come, people could be seemingly happy to turn away from buying cars as a no loss return and go back to financial products.
They ended up saying that the majority of dealers will now play a short waiting game and hold prices of their stock at current levels to ride out the 'calm' period and attempt to not lose out on money that was paid out on that stock.
>This is where the element of denial comes in to play. There will be some dealers who refuse to advertise that the market forces are changing and will continue to promote the idea that what you buy now is going to be an investment. This is of course a well played out sales practice. So there will be dealers who will act similar to how I described many property owners do, in that they continue to hold stock prices at current levels even if that doesn't generate any sales in order to promote a consensus that their assets are not devaluing. And I guess if every dealer in the country did this then prices wouldn't be able to fall. But like I say, dealers have to make money and they will have to reduce otherwise their overheads and costs will catch up with them and they'll go bust..<
As the market turns and values fall, their new stock will be bought with the adjustment factored in.
I will fully admit that I am basically paraphrasing sentiments from conversations (I am not a car dealer) but equally I have no vested interest either way to be honest.
As also mentioned I will be looking to sell my 12C this summer time and of course I would hope to get top price for it, but realistically if the market is turning then I'll have to suck it up and let it go for a more realistic price.
I am getting offered stuff at less money than 6 months ago....air cooled 911s, 328s, Elans, bristols, etc etc....2/3 years ago dealer not too unhappy at stuff sitting around as it was all rising, if youve given yesterdays money as a private or a dealer and you want out, there is likely to be a bit of pain.
Couple of auctions I know well, not accepting stuff with daft reserves
Good news for the enthusiasts, not so good fr the investors who will have to find another comodity to put money into
Much of the boom the past few years has been driven heavily by SOR as few dealers actually have the liquidity to invest in millions of stock (and if they did they would have put it in property!).. this is an inevitable cycle we see every ten years or so and is simply history repeating itself. The whole confusion over Brexit, limited wage growth and even the potential of wars happening do not give the market much confidence.
The very simple and immediate litmus test is to pick up a phone, ring a few of the most well known marque specialists and offer them a desirable car. I can pretty much guarantee that maybe one out of ten will actually offer to pony up real funds (and that will be a large kick in the nuts).
At the supposed height of the market 18 months ago there was tons of interest in my manual F430 but no one had the ability to buy it outright. I took the view if it sold it sold and if not I'd just use it, but eventually sold it privately after four months of advertising. Some of the cars that were on the market back then are still around on Pistonheads today!
Right now many people I know with overpriced SOR cars that have sat round for a year have been told by dealers to either take their cars back, get realistic with pricing or start paying storage fees.
The very simple and immediate litmus test is to pick up a phone, ring a few of the most well known marque specialists and offer them a desirable car. I can pretty much guarantee that maybe one out of ten will actually offer to pony up real funds (and that will be a large kick in the nuts).
At the supposed height of the market 18 months ago there was tons of interest in my manual F430 but no one had the ability to buy it outright. I took the view if it sold it sold and if not I'd just use it, but eventually sold it privately after four months of advertising. Some of the cars that were on the market back then are still around on Pistonheads today!
Right now many people I know with overpriced SOR cars that have sat round for a year have been told by dealers to either take their cars back, get realistic with pricing or start paying storage fees.
fesuvious said:
The moment where indulgence / necessity / desire / logic all come together as an equation.
I don't blame you, 45k in one year and 3k miles defies the logic and values required to make the money in the first place.
+1I don't blame you, 45k in one year and 3k miles defies the logic and values required to make the money in the first place.
it can get to a point where you feel like you've made a mistake and just want rid of it
Cosworth4388 said:
I emailed a dealer about a f10 m5 in the 3rd week of February , they sent me a video of the car and repeatedly mentioned that they had a lot of interest in the car and confirmed via email that they would absolutely not be discounting the car ( all I told then was that I had a budget of £50000)
1 month later they dropped it from £52480 to £51980 3 weeks after that another £1000 to £49980.
I'd of ( at the time ) paid £51,500 when I initially enquired ! But they didn't even entertain any negotiations .
Well, did you use the magic phrase - what’s your best price for cash bruv? And offer an old PS4 as part exchange?1 month later they dropped it from £52480 to £51980 3 weeks after that another £1000 to £49980.
I'd of ( at the time ) paid £51,500 when I initially enquired ! But they didn't even entertain any negotiations .
"Your first loss is often your best loss"
With the current market I would say the above is more prevalent than ever but a lot of dealers are still hanging onto silly advertised prices.
The times of sitting on stock only to see it increase in value have long gone. Dealers have had it all their own way fro a long time and now need to adjust and price cars accordingly which will be fine going forward once they clear down aged stock but you have to swallow that pill first to reset the market.
Sensibly priced cars are selling, overpriced cars are not.
With the current market I would say the above is more prevalent than ever but a lot of dealers are still hanging onto silly advertised prices.
The times of sitting on stock only to see it increase in value have long gone. Dealers have had it all their own way fro a long time and now need to adjust and price cars accordingly which will be fine going forward once they clear down aged stock but you have to swallow that pill first to reset the market.
Sensibly priced cars are selling, overpriced cars are not.
RamboLambo said:
"Your first loss is often your best loss"
With the current market I would say the above is more prevalent than ever but a lot of dealers are still hanging onto silly advertised prices.
The times of sitting on stock only to see it increase in value have long gone. Dealers have had it all their own way fro a long time and now need to adjust and price cars accordingly which will be fine going forward once they clear down aged stock but you have to swallow that pill first to reset the market.
Sensibly priced cars are selling, overpriced cars are not.
Havnt the private owners had it their own way too in a bull market?With the current market I would say the above is more prevalent than ever but a lot of dealers are still hanging onto silly advertised prices.
The times of sitting on stock only to see it increase in value have long gone. Dealers have had it all their own way fro a long time and now need to adjust and price cars accordingly which will be fine going forward once they clear down aged stock but you have to swallow that pill first to reset the market.
Sensibly priced cars are selling, overpriced cars are not.
My phone has not stopped ringing in the last few weeks with privates (and some trade) realising that the booms over & trying to offload their cars, at yesterdays money of course.....will be a few months yet before the market settles and the adjustment is made
POORCARDEALER said:
I am getting offered stuff at less money than 6 months ago....air cooled 911s, 328s, Elans, bristols, etc etc....2/3 years ago dealer not too unhappy at stuff sitting around as it was all rising, if youve given yesterdays money as a private or a dealer and you want out, there is likely to be a bit of pain.
Couple of auctions I know well, not accepting stuff with daft reserves
Good news for the enthusiasts, not so good fr the investors who will have to find another comodity to put money into
I know one of the well respected Porsche specialist dealers had a a shocking Q4 last year....sold 25% of the cars they normally sell and not surprisingly didn't buy a single car outright for stock. Air cooled market isn't in good shape with 964 3.6 Turbo prices off 25% from the top. I believe newer cars are doing better. I understand things have been a bit better this year. Couple of auctions I know well, not accepting stuff with daft reserves
Good news for the enthusiasts, not so good fr the investors who will have to find another comodity to put money into
Also heard that BMW, Audi, Merc are really struggling for sales from someone in the trade. He normally runs a BMW company car but wasn't allowed to get a replacement as his group's BMW dealer can't shift stock....we're not talking M cars here we're talking a family man's BMW. I test drove an RS6 a couple of years ago and decided against it ultimately and hadn't heard from the dealer since... until about a month ago when they were desperate to get me in the showroom to buy one of the RS6's they had in stock which had to be sold by the end of Q1.
I've also noticed dealers have had regular stock of new delivery mileage cars like 991.2 GTS's over the last six months....over the last few years you'd have expected a six to nine month wait to get a new car.
I'd be very careful about who I was placing a car on SoR with over the next six months...I'd be looking at the long standing specialists rather than they dealers that have sprung up over the last five years.
A lot of the above is anecdotal but it's all telling the same story.
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