Will Corona effect the Supercar Market

Will Corona effect the Supercar Market

Author
Discussion

Gameface

16,565 posts

78 months

Sunday 10th May 2020
quotequote all
2019 675LT?

tokyotv

258 posts

129 months

Sunday 10th May 2020
quotequote all
tokyotv said:
Excuse my ignorance, but do you get the deposit back at the end of the term?
I only posted once.....don’t know why my question came up twice?

Sorry.

av185

18,514 posts

128 months

Sunday 10th May 2020
quotequote all
Gameface said:
2019 675LT?
Typo error 600LT.

carspath

835 posts

178 months

Sunday 10th May 2020
quotequote all
Thank you for explaining andrew

1) So , we can expect a sudden influx on 2 year old 2nd hand cars coming onto the market in 2020 .
Supply will balloon .
These cars will be competing with the new cars that manufacturers will be hoping to sell at RRP .
Surely this will make the new cars financially undesirable , except for those few buyers for whom money is no object , or for those for whom a new number plate is paramount ( a brand new replacement model would be a different issue )
The Finance Directors of these manufacturers must have foreseen this looming problem , no ?

2) Do the manufacturers really have the financial reserves to absorb these losses ?

andrew

9,973 posts

193 months

Sunday 10th May 2020
quotequote all
carspath said:
Thank you for explaining andrew

1) So , we can expect a sudden influx on 2 year old 2nd hand cars coming onto the market in 2020 .
Supply will balloon .
These cars will be competing with the new cars that manufacturers will be hoping to sell at RRP .
Surely this will make the new cars financially undesirable , except for those few buyers for whom money is no object , or for those for whom a new number plate is paramount ( a brand new replacement model would be a different issue )
The Finance Directors of these manufacturers must have foreseen this looming problem , no ?

2) Do the manufacturers really have the financial reserves to absorb these losses ?
those cars will certainly have to go somewhere in two years' time
if the manufacturer takes ownership, then they will indeed have another little headache

i've had someone sat next to me buying-up literally hundreds of advertised cars to support a new brand's residuals
but that was part of a large group in happier times

TP321

1,480 posts

199 months

Sunday 10th May 2020
quotequote all
andrew said:
i've had someone sat next to me buying-up literally hundreds of advertised cars to support a new brand's residuals
but that was part of a large group in happier times
Really? ..so the manufacturer was buying up every one of their used cars that was hitting the market with a view to shore up residuals? Who was it? can you tell us?

andrew

9,973 posts

193 months

Sunday 10th May 2020
quotequote all
TP321 said:
andrew said:
i've had someone sat next to me buying-up literally hundreds of advertised cars to support a new brand's residuals
but that was part of a large group in happier times
Really? ..so the manufacturer was buying up every one of their used cars that was hitting the market with a view to shore up residuals? Who was it? can you tell us?
exactly
sadly i can't tell you who the smart guy was

TP321

1,480 posts

199 months

Sunday 10th May 2020
quotequote all
andrew said:
exactly
sadly i can't tell you who the smart guy was
fair enough, but give us a clue...and surely it must have been a small manufacturer - very niche model with relatively few used cars in the market...

Fckitdriveon

1,040 posts

91 months

Sunday 10th May 2020
quotequote all
andrew said:
TP321 said:
andrew said:
i've had someone sat next to me buying-up literally hundreds of advertised cars to support a new brand's residuals
but that was part of a large group in happier times
Really? ..so the manufacturer was buying up every one of their used cars that was hitting the market with a view to shore up residuals? Who was it? can you tell us?
exactly
sadly i can't tell you who the smart guy was
Hint
Hint lol

Chrism355

102 posts

161 months

Sunday 10th May 2020
quotequote all
I raised this point about McLaren churning out a constant stream of new models and to hell with the residuals of existing owners when they launched the 650 early and screwed over the 12C owners, I said then that one day they would run out of new customers willing to drop 50% in first year ownership as repeat customers would be few and far.
If you look after residuals by controlling supply you create a desirable brand, new customers are expensive to get, existing are cheap. It may take longer to grow the business but McLaren have just built a huge hole that they may not get out of .

I do hope I am wrong, they do make great cars and have raised the bar

Soleith

480 posts

90 months

Monday 11th May 2020
quotequote all
carspath said:
Thank you for explaining andrew

1) So , we can expect a sudden influx on 2 year old 2nd hand cars coming onto the market in 2020 .
Supply will balloon .
These cars will be competing with the new cars that manufacturers will be hoping to sell at RRP .
Surely this will make the new cars financially undesirable , except for those few buyers for whom money is no object , or for those for whom a new number plate is paramount ( a brand new replacement model would be a different issue )
The Finance Directors of these manufacturers must have foreseen this looming problem , no ?

2) Do the manufacturers really have the financial reserves to absorb these losses ?
Yeah, I do think this is a very shortsighted/short term way of trying to sort out the balance sheet a bit. The benefit obviously is they have more sales to book in the short term and some revenue. The offset is that they will pay through the nose for this down the line both in terms of having to take these cars back and probably realise a loss on the GFV they claimed when the market won't support that level of pricing, as well as the oversupply likely pushing the market down further.

Do they have the financial reserves to absorb that? Probably not, which is why they're doing these deals, but at the same time, if they don't do these kinds of deals, they may not be around in x years to have to worry about absorbing those losses. A classic case of can-kicking in the best brexit sense!

Soleith

480 posts

90 months

Monday 11th May 2020
quotequote all
https://www.topgear.com/car-news/opinion/change-ou...

TLDR from TG: Reduced manufacturers, reduced numbers of cars but more like a return to the old days where seeing a supercar was a genuine rare occurrence, something they seem to equate with the supercar being "saved"!

av185

18,514 posts

128 months

Monday 11th May 2020
quotequote all
Soleith said:
https://www.topgear.com/car-news/opinion/change-ou...

TLDR from TG: Reduced manufacturers, reduced numbers of cars but more like a return to the old days where seeing a supercar was a genuine rare occurrence, something they seem to equate with the supercar being "saved"!
Interesting.

'Finance allows people who cannot really afford fast metal to do so in instalments.'

Wonder what the pro pcpers make of that lol. rolleyes


sparta6

3,699 posts

101 months

Monday 11th May 2020
quotequote all
Soleith said:
https://www.topgear.com/car-news/opinion/change-ou...

TLDR from TG: Reduced manufacturers, reduced numbers of cars but more like a return to the old days where seeing a supercar was a genuine rare occurrence, something they seem to equate with the supercar being "saved"!
Good news.

Also means less ropey cars around in future. More owners who posess the self-discipline and cash required to run these cars properly in accordance with factory schedules.

cayman-black

12,650 posts

217 months

Monday 11th May 2020
quotequote all
TP321 said:
fair enough, but give us a clue...and surely it must have been a small manufacturer - very niche model with relatively few used cars in the market...
lol,Noble M600 i reckon.....no Ferrari!

Soleith

480 posts

90 months

Monday 11th May 2020
quotequote all
av185 said:
Interesting.

'Finance allows people who cannot really afford fast metal to do so in instalments.'

Wonder what the pro pcpers make of that lol. rolleyes
Yeah I did have a mini-chortle at that. Fundamentally most methods of financing are geared towards the bulk of the market which may not have the cash to purely fund a car upfront, that much said, two other factors worth keeping in mind:

1. Global interest rates are at historic lows and 0% deals do exist (my current albeit not supercar Audi A8 is on a 0% PCP, why wouldn't you?! It's basically free money).

2. It's been nudgenudgewinkwinkknowwhatimeanknowwhatimean indicated to me that using manufacturer finance can help to get onto some invite only manufacturer lists for limited cars. Whether there's actually any truth in that or if it's a coin toss between you and another person with the same buying history but one of you uses manufacturer finance and the other doesn't or whether it was just a dealer trying to flog finance is unclear to me.

MDL111

6,975 posts

178 months

Monday 11th May 2020
quotequote all
Soleith said:
av185 said:
Interesting.

'Finance allows people who cannot really afford fast metal to do so in instalments.'

Wonder what the pro pcpers make of that lol. rolleyes
Yeah I did have a mini-chortle at that. Fundamentally most methods of financing are geared towards the bulk of the market which may not have the cash to purely fund a car upfront, that much said, two other factors worth keeping in mind:

1. Global interest rates are at historic lows and 0% deals do exist (my current albeit not supercar Audi A8 is on a 0% PCP, why wouldn't you?! It's basically free money).

2. It's been nudgenudgewinkwinkknowwhatimeanknowwhatimean indicated to me that using manufacturer finance can help to get onto some invite only manufacturer lists for limited cars. Whether there's actually any truth in that or if it's a coin toss between you and another person with the same buying history but one of you uses manufacturer finance and the other doesn't or whether it was just a dealer trying to flog finance is unclear to me.
Ad 2 - I think Ferrari gives you points for using finance (and so they should given they make more money off of you), so you will move up the list vs an otherwise identical cash buyer - my understanding anyway

av185

18,514 posts

128 months

Monday 11th May 2020
quotequote all
MDL111 said:
Soleith said:
av185 said:
Interesting.

'Finance allows people who cannot really afford fast metal to do so in instalments.'

Wonder what the pro pcpers make of that lol. rolleyes
Yeah I did have a mini-chortle at that. Fundamentally most methods of financing are geared towards the bulk of the market which may not have the cash to purely fund a car upfront, that much said, two other factors worth keeping in mind:

1. Global interest rates are at historic lows and 0% deals do exist (my current albeit not supercar Audi A8 is on a 0% PCP, why wouldn't you?! It's basically free money).

2. It's been nudgenudgewinkwinkknowwhatimeanknowwhatimean indicated to me that using manufacturer finance can help to get onto some invite only manufacturer lists for limited cars. Whether there's actually any truth in that or if it's a coin toss between you and another person with the same buying history but one of you uses manufacturer finance and the other doesn't or whether it was just a dealer trying to flog finance is unclear to me.
Ad 2 - I think Ferrari gives you points for using finance (and so they should given they make more money off of you), so you will move up the list vs an otherwise identical cash buyer - my understanding anyway
Yep same as most manufacturers and there is nothing stopping you taking the finance option then paying it off in full with no penalty shortly after taking delivery to keep the dealer happy and you earn brownie points too lol.

Trouble is Ferrari amongst others have been pushing Lease Purchase on the unsuspecting as a finance vehicle which unlike PCP leaves the punter solely liable for the inevitable GFV shortfall as many will in time no doubt find out to their substantial cost.

s2000db

1,156 posts

154 months

Monday 11th May 2020
quotequote all
They also said that ‘vulnerable manufacturers won’t survive’...

Unfortunately, two come to mind immediately imo..

MDL111

6,975 posts

178 months

Monday 11th May 2020
quotequote all
av185 said:
MDL111 said:
Soleith said:
av185 said:
Interesting.

'Finance allows people who cannot really afford fast metal to do so in instalments.'

Wonder what the pro pcpers make of that lol. rolleyes
Yeah I did have a mini-chortle at that. Fundamentally most methods of financing are geared towards the bulk of the market which may not have the cash to purely fund a car upfront, that much said, two other factors worth keeping in mind:

1. Global interest rates are at historic lows and 0% deals do exist (my current albeit not supercar Audi A8 is on a 0% PCP, why wouldn't you?! It's basically free money).

2. It's been nudgenudgewinkwinkknowwhatimeanknowwhatimean indicated to me that using manufacturer finance can help to get onto some invite only manufacturer lists for limited cars. Whether there's actually any truth in that or if it's a coin toss between you and another person with the same buying history but one of you uses manufacturer finance and the other doesn't or whether it was just a dealer trying to flog finance is unclear to me.
Ad 2 - I think Ferrari gives you points for using finance (and so they should given they make more money off of you), so you will move up the list vs an otherwise identical cash buyer - my understanding anyway
Yep same as most manufacturers and there is nothing stopping you taking the finance option then paying it off in full with no penalty shortly after taking delivery to keep the dealer happy and you earn brownie points too lol.

Trouble is Ferrari amongst others have been pushing Lease Purchase on the unsuspecting as a finance vehicle which unlike PCP leaves the punter solely liable for the inevitable GFV shortfall as many will in time no doubt find out to their substantial cost.
Yeah I don’t understand all the financing options - I understood my FFS financing as a loan secured by the car where I am liable to repay it at the end just like any other loan (was a used car though)