I think that cars will be expensive for good now.
Discussion
This week i have been looking into a replacement for our family car and what has occurred to me is i'm not sure that this highly priced stuff will come to an end or at least not for a long time.
Once manufacturers start to have a stream on tap again i reckon they will look at what people have been buying used cars for and no doubt think to themselves 'well if they are paying 80% of a cars value when its 3 years old then they would pay more for a new one'
Even if they dont think that, everything seems to have gone up in price, maybe it will all settle back down but maybe not, perhaps they will just be forced to charge more.
Maybe once everything is in full motion then yes there might end up with a steady stream of cars which end up on cheap lease deals but even by then with whats going on with inflation they will just be more anyway.
Im really struggling to decide what to do for our next car.
Im considering buying using the different methods.
Outright, which with the high prices i cant stomach, basically buying a car which was several thousand pounds less just a few months ago. I would also much rather keep the money as im still convinced of a huge crash, and if theres not a crash thats my Lamborghini fund
pcp seems to be offering remarkably low baloon payments on what i have considered (that does go against what ive said above so they seem to be predicting price drops). which is making for large deposit and huge monthly payments.
lease deals seem few and far between perhaps with a few random things which look semi appealing then i realise that they aren't actually very exciting at all and are still a load of money.
Once manufacturers start to have a stream on tap again i reckon they will look at what people have been buying used cars for and no doubt think to themselves 'well if they are paying 80% of a cars value when its 3 years old then they would pay more for a new one'
Even if they dont think that, everything seems to have gone up in price, maybe it will all settle back down but maybe not, perhaps they will just be forced to charge more.
Maybe once everything is in full motion then yes there might end up with a steady stream of cars which end up on cheap lease deals but even by then with whats going on with inflation they will just be more anyway.
Im really struggling to decide what to do for our next car.
Im considering buying using the different methods.
Outright, which with the high prices i cant stomach, basically buying a car which was several thousand pounds less just a few months ago. I would also much rather keep the money as im still convinced of a huge crash, and if theres not a crash thats my Lamborghini fund
pcp seems to be offering remarkably low baloon payments on what i have considered (that does go against what ive said above so they seem to be predicting price drops). which is making for large deposit and huge monthly payments.
lease deals seem few and far between perhaps with a few random things which look semi appealing then i realise that they aren't actually very exciting at all and are still a load of money.
I’ve just been thinking the exact same thing, not at all convinced prices are going to come down any considerable amount in the foreseeable future. I’ve been biding my time for 6 months just driving a shed around waiting for sanity to prevail with the used car market but it’s just not happening. Enormously frustrating for someone on a tight budget.
Honestly with how reliable older cars are now I think the whole mid-market is just worth ignoring. If you shop carefully there are some very nice cars available for next to nothing. I’ve been running around in a “shed” for the last year. It’s a very clean Mercedes 320CDI. Yes, it’s nearly 20 years old with 165k miles on it but it’s brilliant.
I’ve just replaced it with a similarly good condition 2005 Audi A4 convertible with 100k on the clock.
Both cars were £2000 or under.
People’s fear of “high mileage” is absolutely brilliant.
I’ve just replaced it with a similarly good condition 2005 Audi A4 convertible with 100k on the clock.
Both cars were £2000 or under.
People’s fear of “high mileage” is absolutely brilliant.
With all the car videos and chat around at the moment, I think I'm being subliminally conditioned into thinking that spending 50k or so on a new car is quite normal and sensible.
Car prices have certainly seemed to have jumped over the last few years or so. All the VAG stuff seems to have leapt about 20% or so with the new models.
Car prices have certainly seemed to have jumped over the last few years or so. All the VAG stuff seems to have leapt about 20% or so with the new models.
Aunty Pasty said:
With all the car videos and chat around at the moment, I think I'm being subliminally conditioned into thinking that spending 50k or so on a new car is quite normal and sensible.
Car prices have certainly seemed to have jumped over the last few years or so. All the VAG stuff seems to have leapt about 20% or so with the new models.
I am amazed at what i see out there on the road and wonder wtf people are doing for a living to buy this stuff.Car prices have certainly seemed to have jumped over the last few years or so. All the VAG stuff seems to have leapt about 20% or so with the new models.
I keep seeing porsche taycans, i assume after speaking to a porsche dealer that most are on finance and i reckon thats got to be around 20k down and 1500-2000 a month!
All the new range rovers, amg mercs, m cars etc etc.
Although i will say for every nice car you see on the road theres probably 30 totally normal cars which fly under the radar which you obviously dont notice like a brand new 100k plus car.
I don't think there's anything that will mean a permanent significant price hike for brand new cars.
Ultimately it's a free market, which means that if manufacturers are selling cars for substantially above what they cost to make, that will invite someone else to sell a bit cheaper to win the sale (since it's still profitable), until the market price comes down to cost of production plus a small profit margin to cover investments in R&D and production facilities.
The rush of new entrants following Tesla into the car market (Canoo, Vinfast, Arrival, LucidAir, Rivian etc) only guarantee that there can't be a cosy cartel keeping prices artificially high. And in the medium term, the relative simplicity of electric cars will tend to bring prices down, as batteries stop being so expensive per kWh.
Right now production is artificially constrained mainly due to the chip shortage, once the shortage changes to a glut things will be back to normal oversupply and discounting in new car production. I'd be less confident on how long this will take, but it will happen.
Things that would signal price increases would be car factories closing down (permanently reduced supply capacity) or consolidation and fewer separate manufacturers in the market. To be fair the latter has happened a bit, GM and Mitsubishi pulling out of Europe, but I think this is a symptom of low profits, and not enough to swing things back.
There's a separate question of the 'pre-owned discount', eg what % of its new list price we value a used car at after 3 years and 25k miles. Since this is different in other countries, it's something one could imagine changing post-pandemic - we might have a culture change and start valuing used cars more highly relative to their new prices than we used to (and more like in the US). So yeah, used cars could hold higher values, although I predict that as new cars become in surplus again, that will drive used values back down a bit.
m3jappa said:
I am amazed at what i see out there on the road and wonder wtf people are doing for a living to buy this stuff.
I keep seeing porsche taycans, i assume after speaking to a porsche dealer that most are on finance and i reckon thats got to be around 20k down and 1500-2000 a month!
All the new range rovers, amg mercs, m cars etc etc.
Although i will say for every nice car you see on the road theres probably 30 totally normal cars which fly under the radar which you obviously dont notice like a brand new 100k plus car.
Up the road from us, there is a 3 bed semi (worth around £350k) has a 70 plate X5M and a 2019 M5 sitting on the drive.I keep seeing porsche taycans, i assume after speaking to a porsche dealer that most are on finance and i reckon thats got to be around 20k down and 1500-2000 a month!
All the new range rovers, amg mercs, m cars etc etc.
Although i will say for every nice car you see on the road theres probably 30 totally normal cars which fly under the radar which you obviously dont notice like a brand new 100k plus car.
What on earth do these people do for a living to afford cars like that?
We live reasonably comfortably but by the time the mortgage and bills are paid, there is no way we could afford two £70k cars on finance.
I'd agree that high prices are here to stay.
My wife drives our family car and likes to buy as new as possible and keep for a while. 5 years ago we paid 11k for an ex demo hyundai which has been great to be fair. She likes the brand but their equivalent new models are now over 20k. So when the time comes to change it'll have to be a bit more used I'm afraid.
At least higher prices should mean that our older cars will be worth a little more when the time comes to sell so maybe cost to change will be a bit more reasonable.
My wife drives our family car and likes to buy as new as possible and keep for a while. 5 years ago we paid 11k for an ex demo hyundai which has been great to be fair. She likes the brand but their equivalent new models are now over 20k. So when the time comes to change it'll have to be a bit more used I'm afraid.
At least higher prices should mean that our older cars will be worth a little more when the time comes to sell so maybe cost to change will be a bit more reasonable.
Wagonwheel555 said:
m3jappa said:
I am amazed at what i see out there on the road and wonder wtf people are doing for a living to buy this stuff.
I keep seeing porsche taycans, i assume after speaking to a porsche dealer that most are on finance and i reckon thats got to be around 20k down and 1500-2000 a month!
All the new range rovers, amg mercs, m cars etc etc.
Although i will say for every nice car you see on the road theres probably 30 totally normal cars which fly under the radar which you obviously dont notice like a brand new 100k plus car.
Up the road from us, there is a 3 bed semi (worth around £350k) has a 70 plate X5M and a 2019 M5 sitting on the drive.I keep seeing porsche taycans, i assume after speaking to a porsche dealer that most are on finance and i reckon thats got to be around 20k down and 1500-2000 a month!
All the new range rovers, amg mercs, m cars etc etc.
Although i will say for every nice car you see on the road theres probably 30 totally normal cars which fly under the radar which you obviously dont notice like a brand new 100k plus car.
What on earth do these people do for a living to afford cars like that?
We live reasonably comfortably but by the time the mortgage and bills are paid, there is no way we could afford two £70k cars on finance.
I’m pretty convinced that some of my neighbours must spend all of their money on the mortgage and car payments however, obviously I have a reasonable insight into their circumstances. Each to their own of course. Plenty of minted people who spend buttons on cars!
ChrisH72 said:
I'd agree that high prices are here to stay.
My wife drives our family car and likes to buy as new as possible and keep for a while. 5 years ago we paid 11k for an ex demo hyundai which has been great to be fair. She likes the brand but their equivalent new models are now over 20k. So when the time comes to change it'll have to be a bit more used I'm afraid.
At least higher prices should mean that our older cars will be worth a little more when the time comes to sell so maybe cost to change will be a bit more reasonable.
The same happened but with a van i bought. My wife drives our family car and likes to buy as new as possible and keep for a while. 5 years ago we paid 11k for an ex demo hyundai which has been great to be fair. She likes the brand but their equivalent new models are now over 20k. So when the time comes to change it'll have to be a bit more used I'm afraid.
At least higher prices should mean that our older cars will be worth a little more when the time comes to sell so maybe cost to change will be a bit more reasonable.
in 2016 this brand new mitsubishi 3.5t tipper truck cost me 20500 plus vat. earlier this year i phone to look at getting a new one, of which there was several in the dealer network. Now looking at 26.5-27k plus vat. that was early this year so i bet even more now.
thats an obscene increase imo.
so i went and bought a 2014 7.5t lorry for 15k plus vat with just 30k on it. this is around 45k plus vat new so in this case i feel very pleased and appear i got in just before prices have gone mad.
I just think that they are going to push rrp up as much as possible now.
Wagonwheel555 said:
Up the road from us, there is a 3 bed semi (worth around £350k) has a 70 plate X5M and a 2019 M5 sitting on the drive.
What on earth do these people do for a living to afford cars like that?
We live reasonably comfortably but by the time the mortgage and bills are paid, there is no way we could afford two £70k cars on finance.
Was ever thus. I recall (a few years ago now) seeing on the driveway (converted front garden) of a 2 up 2 down mid terrace house (in Alderley Edge) a contemporary Ferrari and Bentley parked with their back ends hanging over the footpath. Combined value of the cars significantly in excess of the house. Income rich, savings poor, or that's just how they choose to live?What on earth do these people do for a living to afford cars like that?
We live reasonably comfortably but by the time the mortgage and bills are paid, there is no way we could afford two £70k cars on finance.
I’m doing my bit by running a 13 year old nissan that I bought at 3 years old. Where I am currently there is some social housing flats etc and they often seem to have less than 3 year old mercs etc
I can only assume paying f
k all for their housing while I’ve paid like a dog to pave my own way all my life explains the discrepancy
I can only assume paying f
k all for their housing while I’ve paid like a dog to pave my own way all my life explains the discrepancy The market will gain some normality once the production issues have cleared through. The German manufacturers in particular are reliant on huge volumes to generate production efficiencies, simply making fewer cars and selling at a marginally higher price doesn't work.
In respect to how people afford their cars, finance, pure and simple. I know numerous people, both friends and family who spent £700/£800 per month on a low deposit PCP. Fair play to them, I wouldn't want to do it but it's their decision.
For all the under 3 year old stuff our there, many will be company cars - even the entry level grade in our business can order a car up to nearly £40k list price - that's normally around 20% higher than their gross wage..
In respect to how people afford their cars, finance, pure and simple. I know numerous people, both friends and family who spent £700/£800 per month on a low deposit PCP. Fair play to them, I wouldn't want to do it but it's their decision.
For all the under 3 year old stuff our there, many will be company cars - even the entry level grade in our business can order a car up to nearly £40k list price - that's normally around 20% higher than their gross wage..
CoolHands said:
I’m doing my bit by running a 13 year old nissan that I bought at 3 years old. Where I am currently there is some social housing flats etc and they often seem to have less than 3 year old mercs etc
I can only assume paying fk all for their housing while I’ve paid like a dog to pave my own way all my life explains the discrepancy
A new ‘prestige’ car every 3 years is an entitlement these days don’t you know. Round my way, the value of the car somebody drives is very often inversely proportional to their net worth. I can only assume paying f
k all for their housing while I’ve paid like a dog to pave my own way all my life explains the discrepancy I think values will settle down. The supply issue will sort itself out and people just won’t buy cars if they’re daft money. I declined ordering a vehicle this week because the deal wasn’t good enough, it’s really no problem.
m3jappa said:
Aunty Pasty said:
With all the car videos and chat around at the moment, I think I'm being subliminally conditioned into thinking that spending 50k or so on a new car is quite normal and sensible.
Car prices have certainly seemed to have jumped over the last few years or so. All the VAG stuff seems to have leapt about 20% or so with the new models.
I am amazed at what i see out there on the road and wonder wtf people are doing for a living to buy this stuff.Car prices have certainly seemed to have jumped over the last few years or so. All the VAG stuff seems to have leapt about 20% or so with the new models.
I keep seeing porsche taycans, i assume after speaking to a porsche dealer that most are on finance and i reckon thats got to be around 20k down and 1500-2000 a month!
All the new range rovers, amg mercs, m cars etc etc.
Although i will say for every nice car you see on the road theres probably 30 totally normal cars which fly under the radar which you obviously dont notice like a brand new 100k plus car.
Dolf Stoppard said:
If someone's putting down £20k and paying £2k a month they've got a spectacularly bad deal!
Ok, ill admit i plucked that out the air so just went on porsche configurator.porsche taycan turbo, not a single penny in extras is 116k
21k down and just under 1100 a month
While thats a lot of car thats a lot of deposit and monthly payment.
Tbh the balloon as a percentage is significantly more than they are currently offering on used cars.....which appear massive inflated in asking price as well which is making the used cars on finance very expensive.
Once we’ve got past the initial adjustment, I actually think that a more realistic depreciation curve could be beneficial.
The idea that a car that’s 3 years old and done 30k may be worth less than 40% of its new price when it still has 80% of its life or more left is a bit odd.
If new cars hold their value better then they become cheaper to run and more viable to keep well maintained and not scrap them prematurely.
The idea that a car that’s 3 years old and done 30k may be worth less than 40% of its new price when it still has 80% of its life or more left is a bit odd.
If new cars hold their value better then they become cheaper to run and more viable to keep well maintained and not scrap them prematurely.
syl said:
We’re addicted to boom and bust. The pandemic has shown you just can’t predict exactly what will happen, when - but just like death and taxes, it seems inevitable.
But we don't have the bust bit anymore... every time it looks remotely like happening they just fire up the printing presses and prop up, or actually further inflate, those all important asset prices.Gassing Station | Car Buying | Top of Page | What's New | My Stuff