Time to sell? Has the market peaked?
Discussion
On the forum I'm reading of lots of people selling cars that they no longer want or need due to WFH or change in circumstances, and places like Motorway and WeBuyAnyCar seem really busy so they seem to be bringing in an increasing amount of cars.
Then I read of many who have now decided to sit tight and wait for prices to ease off before buying.
So, despite a slowdown in new cars being built, surely the plateau for values has to come soon with increased supply from individuals selling and decreased demand from potential buyers unwilling to pay over the odds?
What do I know though, I'm just wishful thinking as I want to sell the main car this week for a good price, then for prices to drop so I can replace our second car
Then I read of many who have now decided to sit tight and wait for prices to ease off before buying.
So, despite a slowdown in new cars being built, surely the plateau for values has to come soon with increased supply from individuals selling and decreased demand from potential buyers unwilling to pay over the odds?
What do I know though, I'm just wishful thinking as I want to sell the main car this week for a good price, then for prices to drop so I can replace our second car
Used prices forcast to be up again into October and through the winter.
If you think most used cars are expensive now wait until early next year peak buying season. Vanilla medium and high end where prices seem increasingly irrelevant esp on limited run stuff.
You read it here first btw.
If you think most used cars are expensive now wait until early next year peak buying season. Vanilla medium and high end where prices seem increasingly irrelevant esp on limited run stuff.
You read it here first btw.
A few dealers I've been speaking to recently reckon it'll last a good few more months yet, probably into early next year.
As others have said though, it depends on the car.
I've just sold a few month old BMW M340i for more than I bought it for, and it does look like that market specifically will probably remain quite strong.
Even the likes of TRL (Tony Lewis, Berry BMW) who usually has stock coming out his a
se can't get hold of any cars for general stock until March next year.
Also speaking to some Alfa dealers, used Quadrifoglios are flying through auctions at well above normal prices, even those that need splitters replaced or whole sets of tyres.
As others have said though, it depends on the car.
I've just sold a few month old BMW M340i for more than I bought it for, and it does look like that market specifically will probably remain quite strong.
Even the likes of TRL (Tony Lewis, Berry BMW) who usually has stock coming out his a
se can't get hold of any cars for general stock until March next year.Also speaking to some Alfa dealers, used Quadrifoglios are flying through auctions at well above normal prices, even those that need splitters replaced or whole sets of tyres.
For what it’s worth, I was in the trade, but I agree with the ancient ‘Supply and Demand’ cliche. As long as new cars are held up with electronic component supply problems, prices will hold or even go up. As with the housing market, who knows when the bubble will burst? Also, like the housing analogy, if you sell your car but still need one, that too will be hyped. There is money out there, boosted from so called furlough but we now witness the end of that, and energy prices going silly. Conclusion to this? There is a small window during which cars will sell above their intrinsic worth.
I play football with a guy who owns a few franchised manufacturer dealers (if that's what they are called) and he said they still can't get new cars so expects used prices to remain high or even rise a bit for the next few months
He said they are selling demonstrators for over new list price.
He said they are selling demonstrators for over new list price.
It's supply and demand nothing more nothing less.
It was the same at the start of the covid with face masks and hand sanitizer, then bog roll. People were paying silly money at the time if you could get your hands on the stuff.
Then we had timber prices rocket, house prices rocket.
Now we have Gas and Electric prices shooting up as there is just not enough of the stuff currently available to meet the demands.
How much is a bottle of hand sanitizer today? How much a pack of 10 face masks. Most places are now giving them away..
As people cannot get their hands on new vehicles there is a demand for nearly new and anything less than 4-5 year old, too few vehicles to meet demand.
When we look back in 12-18 months time will wonder what all the fuss was about, why people were prepared to pay so much for a used vehicle,. People get caught up in the hysteria, if you don't buy today next week it will be x percent more, that is correct when you refer to a finite resource, but with cars & vans manufacturers make money and keep people employed by producing vehicles, so once they can get all the components needed production will ramp up, I am sure plans are being made now to catch up with orders.
Prices will then deflate just like the prices of hand sanitizer, I expect prices to drop quite heavily once normal service resumes as it will be a double impact of wiping out the artificial gains of the last 12-18 months plus all these vehicles being 12-18 months older, as we return to the 50% depreciation after 3 years model or there abouts.
It was the same at the start of the covid with face masks and hand sanitizer, then bog roll. People were paying silly money at the time if you could get your hands on the stuff.
Then we had timber prices rocket, house prices rocket.
Now we have Gas and Electric prices shooting up as there is just not enough of the stuff currently available to meet the demands.
How much is a bottle of hand sanitizer today? How much a pack of 10 face masks. Most places are now giving them away..
As people cannot get their hands on new vehicles there is a demand for nearly new and anything less than 4-5 year old, too few vehicles to meet demand.
When we look back in 12-18 months time will wonder what all the fuss was about, why people were prepared to pay so much for a used vehicle,. People get caught up in the hysteria, if you don't buy today next week it will be x percent more, that is correct when you refer to a finite resource, but with cars & vans manufacturers make money and keep people employed by producing vehicles, so once they can get all the components needed production will ramp up, I am sure plans are being made now to catch up with orders.
Prices will then deflate just like the prices of hand sanitizer, I expect prices to drop quite heavily once normal service resumes as it will be a double impact of wiping out the artificial gains of the last 12-18 months plus all these vehicles being 12-18 months older, as we return to the 50% depreciation after 3 years model or there abouts.
As said above, all down to supply and demand. Clearly new car supply is going to be limited for a while, perhaps a year or so. Question however is how many people are going to be looking for a car over the next year and how does that balance against those who find themselves working from home and no longer need two or more cars in the household running out to cash in at wbac.
I think the second hand peak might well come sooner than new car supply returns to more normal levels.
Over the past 18 months more people have wanted a car to avoid public transport but as we come out of this we must surely get to the point like bog roll that everyone that needs one has one and there is then back to the usual demand level.
I think the second hand peak might well come sooner than new car supply returns to more normal levels.
Over the past 18 months more people have wanted a car to avoid public transport but as we come out of this we must surely get to the point like bog roll that everyone that needs one has one and there is then back to the usual demand level.
Most experts think UK used car depreciation of old will never reappear and high prices will now be maintained.
The UK market was unique in that it was abnormal many cars showed over 50% depreciation over 2 years and minimal mileage when the car was merely c 8% used.
Would agree this correction is here to stay and high prices will be maintained.
The UK market was unique in that it was abnormal many cars showed over 50% depreciation over 2 years and minimal mileage when the car was merely c 8% used.
Would agree this correction is here to stay and high prices will be maintained.
Definitely all down to supply and demand as others have said.
I was talking to someone the other day who told me that if you placed an order for a new Range Rover you wouldn't get it before Christmas so supply definitely seems limited!
So long as demand doesn't fall away prices aren't going to drop.
I was talking to someone the other day who told me that if you placed an order for a new Range Rover you wouldn't get it before Christmas so supply definitely seems limited!
So long as demand doesn't fall away prices aren't going to drop.
I think wider economic/tax implications, winter doldrums and inflation across the board will put pressure on used car prices. I also think any manufacturers attempting to limit new supply (once chips are available again) will be undercut by others looking to increase market share. So yes I think they’ve peaked or at least plateaued. Anecdotal observations of some very niche specialist and classic cars supports this, although this is arguably irrelevant for the mainstream market.
But then I’ve WBAC’d my car and I’m not buying another, so I would!
But then I’ve WBAC’d my car and I’m not buying another, so I would!
av185 said:
Most experts think UK used car depreciation of old will never reappear and high prices will now be maintained.
The UK market was unique in that it was abnormal many cars showed over 50% depreciation over 2 years and minimal mileage when the car was merely c 8% used.
Would agree this correction is here to stay and high prices will be maintained.
It's not as straightforward as that. There are many factors that drive the used car market and the depreciation. The UK market was unique in that it was abnormal many cars showed over 50% depreciation over 2 years and minimal mileage when the car was merely c 8% used.
Would agree this correction is here to stay and high prices will be maintained.
The UK as an example has the 2nd highest new car sales in Europe, with so many new cars being sold it drives down the prices of used cars, also quite unique that vehicles here are right hand drive so less of a market for used vehicles.
There is alot of fleet sales here, leasing and debt where people enter into PCP agreements, the manufacturers like this and offer some decent incentives to get you into a new vehicle with sometimes thousands in contributions, this again drives down the used price when you get decent deals on new.
The network here in the UK has been set up to align with the above, all pushing for sales and the auction houses to take care of used stock. Its a very big industry that employs vast numbers of people, if used cars depreciation lessens then the gap between used and new closes, used car sales are not profitable for dealers taking on part ex and the PCP deal final value will be higher meaning lower monthly payments is that what finance companies and manufacturers want? Not sure if still the case but at one time warranties were better in other countries, keeping prices higher for longer.
The long and short it would change the whole market dynamic, ask yourself why all these leases would continue if you end up paying £10k in hire costs after 3 years when the vehicle has only depreciated £5k.
Edited by Theoldguard on Tuesday 21st September 08:54
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