When Will Used Car Prices Drop (2) ?
Discussion
OK, we had a long running thread on this topic when the 'covid crisis' first started, but we now seem to be entering a new phase.
Originally, many people thought the markets in general would spiral into decline, whereas a few predicted a rapid V-shaped recovery, and all would be well. And, indeed, some sectors, including some cars, outperformed expectations during the long and weird summer.
But, as we move towards winter, with new restrictions, brexit and economic uncertainty, will prestige car prices really remain buoyant, or is a correction now inevitable ?
It's a genuine question, and I personally hope that any economic damage can be minimised, as it could affect me as much as anyone, but I'm also a realist
Originally, many people thought the markets in general would spiral into decline, whereas a few predicted a rapid V-shaped recovery, and all would be well. And, indeed, some sectors, including some cars, outperformed expectations during the long and weird summer.
But, as we move towards winter, with new restrictions, brexit and economic uncertainty, will prestige car prices really remain buoyant, or is a correction now inevitable ?
It's a genuine question, and I personally hope that any economic damage can be minimised, as it could affect me as much as anyone, but I'm also a realist
Edited by Koln-RS on Wednesday 23 September 00:15
Koln-RS said:
OK, we had a long running thread on this topic when the 'covid crisis' first started, but we now seem to be entering a new phase.
Originally, many people thought the markets in general would spiral into decline, whereas a few predicted a rapid V-shaped recovery, and all would be well. And, indeed, some sectors, including some cars, outperformed expectations during the long and weird summer.
But, as we move towards winter, with new restrictions, brexit and economic uncertainty, will prestige car prices really remain buoyant, or is a correction now inevitable ?
It's a genuine question, and I personally hope that any economic damage can be minimised, as it could affect me as much as anyone, but I'm also a realist
I was thinking the same and after getting it horribly wrong with my predictions I will be intrigued to see what happens Originally, many people thought the markets in general would spiral into decline, whereas a few predicted a rapid V-shaped recovery, and all would be well. And, indeed, some sectors, including some cars, outperformed expectations during the long and weird summer.
But, as we move towards winter, with new restrictions, brexit and economic uncertainty, will prestige car prices really remain buoyant, or is a correction now inevitable ?
It's a genuine question, and I personally hope that any economic damage can be minimised, as it could affect me as much as anyone, but I'm also a realist
Edited by Koln-RS on Wednesday 23 September 00:15
EvoSid said:
I was thinking the same and after getting it horribly wrong with my predictions I will be intrigued to see what happens
ill second that very surreal time im fortunate to live in Ribble Valley were i see a lot of affluence. Yet people out spending business appears back to normal however i believe that soon the s
t will hit the Fan . Cars on lease will be repossessed and down the line peoples homes. I hope I'm terribly wrong.
There'll be more printing, more ZIRP, quite possibly NIRP, more free corona money, more debt forbearance and probably debt forgiveness (especially when it comes to the CBIL's BBL's etc)...
The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
Edited by mike74 on Wednesday 23 September 06:05
mike74 said:
There'll be more printing, more ZIRP, quite possibly NIRP, more free corona money, more debt forbearance and probably debt forgiveness (especially when it comes to the CBIL's BBL's etc)...
The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
Exactly this..The prices of high end cars will remain stable for the foreseeable future due to more money printing and negative interest rates..The UK government will do everything at its disposal to prevent asset prices especially houses going down in value..Removing high tax payers incentives to put money into pensions and zero rates will only encourage well off individuals to spend more.The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
Edited by mike74 on Wednesday 23 September 06:05
highway said:
I can’t see how assets aren’t heading for a fall. If you lose your job or your business and need money, the first thing you do is dispose of assets you can do without.
I expect there'll be at least just as many people with free corona money burning a hole in their pockets as there are distressed sellers looking to offload assets.Surely a correction is inevitable. The market is awash with high-end cars.
The spike in the spring was unexpected, but a mixture of sentiments probably drove the market - the time of year, long sunny days to buy a car and enjoy it, the lockdown giving time to window shop, some optimism that the pandemic would be short lived, and a general sense of ‘what’s the problem?’ amongst people not directly affected by the immediate impact of the pandemic.
But, it was always the case that the true fallout would be felt this winter, and that remains a big concern.
The spike in the spring was unexpected, but a mixture of sentiments probably drove the market - the time of year, long sunny days to buy a car and enjoy it, the lockdown giving time to window shop, some optimism that the pandemic would be short lived, and a general sense of ‘what’s the problem?’ amongst people not directly affected by the immediate impact of the pandemic.
But, it was always the case that the true fallout would be felt this winter, and that remains a big concern.
houses will never drop, too much demand, they went up if anything and again booming sales.
we might see an extra 1 million people out of a job, but the area's which have boomed have bought in new clients who now want that sports car they could not have the last 20 years.
smaller cars will drop, the pre £30k market, that shot up due to demand. The high end market drops all the time any way most cars are worth 60% after 3 years, we own a mini ,was valued at £9.5k now it's £12.5k !!
so when will used prices drop ? they always drop and always will !!! crap cars get you 40% back, good cars get you 60% back after 3 years.
If you own a cheap car now and want to sell, SELL IT NOW while demand is high, we are offloading the mini, we only paid abit more than that 3 years ago.
but anything over £50k is dropping as normal.
we might see an extra 1 million people out of a job, but the area's which have boomed have bought in new clients who now want that sports car they could not have the last 20 years.
smaller cars will drop, the pre £30k market, that shot up due to demand. The high end market drops all the time any way most cars are worth 60% after 3 years, we own a mini ,was valued at £9.5k now it's £12.5k !!
so when will used prices drop ? they always drop and always will !!! crap cars get you 40% back, good cars get you 60% back after 3 years.
If you own a cheap car now and want to sell, SELL IT NOW while demand is high, we are offloading the mini, we only paid abit more than that 3 years ago.
but anything over £50k is dropping as normal.
I think that the potential 10% no deal tariff on post Jan-21 new cars would offset any additional depriation for nearly new / low mileage stuff, so that will balance out. Even the not-so-special stuff. Covid - who knows at the moment. See what Sunak comes up with, sure something will be announced over the coming days.
I was hugely suprised on how the value of my 12 month old 992 C2S has held. I always knew years 0-2.5 would be a big hit, then flatten (as all new cars do) but seemingly not so much so. Currently only 15 992 C2S Coupe's in the OPC network. Just dont see those figures changing too much over the coming months, even with lower winter demand and a little more production out of Germany.
Just offloaded one of the family nearly-a-shed cars through WBAC for £5.5k. Up £400 on their offer early summer and we've stuck another 6k miles on it since then.
Not selling the 992 though. Have been window shopping, I can find nothing that would float my boat for more than a few hours of novelty factor.
I was hugely suprised on how the value of my 12 month old 992 C2S has held. I always knew years 0-2.5 would be a big hit, then flatten (as all new cars do) but seemingly not so much so. Currently only 15 992 C2S Coupe's in the OPC network. Just dont see those figures changing too much over the coming months, even with lower winter demand and a little more production out of Germany.
Just offloaded one of the family nearly-a-shed cars through WBAC for £5.5k. Up £400 on their offer early summer and we've stuck another 6k miles on it since then.
Not selling the 992 though. Have been window shopping, I can find nothing that would float my boat for more than a few hours of novelty factor.
mike74 said:
There'll be more printing, more ZIRP, quite possibly NIRP, more free corona money, more debt forbearance and probably debt forgiveness (especially when it comes to the CBIL's BBL's etc)...
The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
Sorry but what is a ZIRP and NIRP.The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
Edited by mike74 on Wednesday 23 September 06:05
I have been reliably informed by a HMRC tax inspector that they are being given extra powers to go after those who try to default on CBIL and BBL. Maybe true maybe not but that was from the tax inspector I know
Taffy66 said:
Exactly this..The prices of high end cars will remain stable for the foreseeable future due to more money printing and negative interest rates..The UK government will do everything at its disposal to prevent asset prices especially houses going down in value..Removing high tax payers incentives to put money into pensions and zero rates will only encourage well off individuals to spend more.
This. So proper high end and classic cars may escape alltogether. If we are talking about modern Porsches, then 'prices drop' when the above finishes... when the furlough ending hits not the workers but the company owners.And anyone who said we were in a V-shaped recovery can now see the reality. Dead-cat bounce? Sucker's Rally? Followed by 2nd wave and Brexit stupidity........ shall we play 'Pin the tail on the Donkey' on this graph?
FTSE 100
Edited by Orangecurry on Wednesday 23 September 10:20
Porsche911R said:
houses will never drop, too much demand, they went up if anything and again booming sales.
we might see an extra 1 million people out of a job, but the area's which have boomed have bought in new clients who now want that sports car they could not have the last 20 years.
smaller cars will drop, the pre £30k market, that shot up due to demand. The high end market drops all the time any way most cars are worth 60% after 3 years, we own a mini ,was valued at £9.5k now it's £12.5k !!
so when will used prices drop ? they always drop and always will !!! crap cars get you 40% back, good cars get you 60% back after 3 years.
If you own a cheap car now and want to sell, SELL IT NOW while demand is high, we are offloading the mini, we only paid abit more than that 3 years ago.
but anything over £50k is dropping as normal.
Except every Porsche GT4 that I seem to look at lolwe might see an extra 1 million people out of a job, but the area's which have boomed have bought in new clients who now want that sports car they could not have the last 20 years.
smaller cars will drop, the pre £30k market, that shot up due to demand. The high end market drops all the time any way most cars are worth 60% after 3 years, we own a mini ,was valued at £9.5k now it's £12.5k !!
so when will used prices drop ? they always drop and always will !!! crap cars get you 40% back, good cars get you 60% back after 3 years.
If you own a cheap car now and want to sell, SELL IT NOW while demand is high, we are offloading the mini, we only paid abit more than that 3 years ago.
but anything over £50k is dropping as normal.
Maybe time to look at 911 again if they are dropping
Porsche911R said:
houses will never drop, too much demand, they went up if anything and again booming sales.
we might see an extra 1 million people out of a job, but the area's which have boomed have bought in new clients who now want that sports car they could not have the last 20 years.
smaller cars will drop, the pre £30k market, that shot up due to demand. The high end market drops all the time any way most cars are worth 60% after 3 years, we own a mini ,was valued at £9.5k now it's £12.5k !!
so when will used prices drop ? they always drop and always will !!! crap cars get you 40% back, good cars get you 60% back after 3 years.
If you own a cheap car now and want to sell, SELL IT NOW while demand is high, we are offloading the mini, we only paid abit more than that 3 years ago.
but anything over £50k is dropping as normal.
Posted this before on the (1) thread. For every sector thats struggling, other sectors are gaining, and in Covid it has been the tech sector which has hugely benefitted many US based firms in particular. Look at Amazon recently in the UK news, 7,000 new jobs before the end of '20 plus an additional 10,000 temporary workers in the run up until Christmas. In the UK. I know, my lad has just taken a gap year, and has been working for them since April. we might see an extra 1 million people out of a job, but the area's which have boomed have bought in new clients who now want that sports car they could not have the last 20 years.
smaller cars will drop, the pre £30k market, that shot up due to demand. The high end market drops all the time any way most cars are worth 60% after 3 years, we own a mini ,was valued at £9.5k now it's £12.5k !!
so when will used prices drop ? they always drop and always will !!! crap cars get you 40% back, good cars get you 60% back after 3 years.
If you own a cheap car now and want to sell, SELL IT NOW while demand is high, we are offloading the mini, we only paid abit more than that 3 years ago.
but anything over £50k is dropping as normal.
Selfishly, without Covid he probably wouldnt have the job, wouldnt have the opportunity to dodge what looks like a pretty s
t deal for Uni students this year. And he likes working there, sounds really good - H&S, Conditions etc. top notch. Got a £350 bonus recently for pretty much turning up on time every day.Just a shame it benefits the US markets, not the UK ones, but ultimately it does filter through to UK investors, and ultimately employees in companies with a decent sized UK presence.
https://www.trustnet.com/factsheets/p/o966/av-bail...
I dont expect the V will be as marked this time, but pretty sure there wll be one, and what ever happens it will recover with enough time. As long as you don't need your cash right now, this instant.
There always has been, there is right now and there will always be, enough petrolheads making a few quid somewhere to buy top end motors. Come brexit, covid or minor asteroid strike.
Just be careful where you park it if things do get really bad.
Like everything it's about supply and demand and them two factors are at a point where prices for cars and luxury goods have done the opposite to what many of you expected. I'm still of the opinion that we are riding on a cloud at the moment and the reality of the present situation will not be known until way into next year. Sentiments and emotions which are drivers for spending money are all over the place at the moment. Those that (wrongly) expected the market to drop it's arse overnight are maybe naively looking too short into the future?
With entertainment (travel/drink/dine) expenses fall and v-shaped equties, seems there is actually a lot of money around to spend on toys. Then you have the other supporting factors such as brexit tarrif noise, higher and higher new car RRP..
Doubt used cars (reliable ones of course) in the segment will fall that much.
Doubt used cars (reliable ones of course) in the segment will fall that much.
High end sports/performance/luxury cars currently in production or made in the last few years are vulnerable to a decent correction over the next year in my opinion. Manufacturers will keep churning them out. The economic outlook is uncertain and the demand just isn’t there for these cars in my opinion. There was a post on one of the supercar threads a couple of days ago of someone looking to buy a 488 on a finance deal for three years....it was basically a £170k car which would cost £90k in deposit and payments over three years with a £109k cheque to be written at the end (not a GFV)....maybe people bought cars like that over the last 5 years. Don’t see that going forward personally.
Classics for either good original cars or well restored cars by the right people are fetching strong money...I think the values of these cars is pretty well underwritten right now. I do think in a zero/negative rate environment with the likelihood of increasing CGT rates there will be looking to buy these kind of cars.
Classics for either good original cars or well restored cars by the right people are fetching strong money...I think the values of these cars is pretty well underwritten right now. I do think in a zero/negative rate environment with the likelihood of increasing CGT rates there will be looking to buy these kind of cars.
EvoSid said:
mike74 said:
There'll be more printing, more ZIRP, quite possibly NIRP, more free corona money, more debt forbearance and probably debt forgiveness (especially when it comes to the CBIL's BBL's etc)...
The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
Sorry but what is a ZIRP and NIRP.The prices of all assets including prestige/classic cars ain't going nowhere.
(or at least ain't going nowhere downward)
Edited by mike74 on Wednesday 23 September 06:05
I have been reliably informed by a HMRC tax inspector that they are being given extra powers to go after those who try to default on CBIL and BBL. Maybe true maybe not but that was from the tax inspector I know
Cheib said:
Anyone who thinks you’ll be allowed to default on anything like a BBL or CBIL and walk away is massively mistaken IMHO. Once we’re through this winter the emphasis for HMRC will be on recovering every single penny it can....the change in attitude of HMRC post 2008-9 GFC was very evident. They were able to make retrospective changes and indeed quite happily “change their mind” on tax treatments when they had previously issued official opinions/allowances.
I really, really hope that you're correct and that I'm very much wrong and mistaken.But as far as I can see so far covid has given ukgov just the excuse they needed to flood the economy with cheap/free helicopter money with little concern as to whether the recipients need it or are even entitled to it and I see little to no desire from them to claw back any that has been fraudulently claimed.
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