used cars come down in 2022, bought car 29k we buy 31k today

[Bunting2010]

We are looking to purchase another car

we paid 29k for a toyota from main dealer 29k in Jun this year...we buy any car are offering 31k today. garage prices at Toyota are hitting 34-35k

Should we wait. will the used car market level out once the chip shortage is dealt with. we looked at a brandnew audi 1 year wait list due to the chip shortage.

crazy times. below factors will limited used stock

-chip shortage
-people holding on to older cars for longer as being reluctant to move to electric cars. or worried tech may move fast and new electric car will be worth less.
-people holding on to old cars due to unpredictable economy and rising living costs.

[Wills2]

What are trying to achieve? Sell the Toyota and buy a new car? If you want to do that then do it, no point trying to second guess stuff, your car has gone up so have all the others, so there is probably little difference in the cost to change.

[Nickbrapp]

The chip shortage will go way beyond 2022, think about all the people who’ve extended leases or PCPS or generally just hanging into cars for another year, lots of these won’t be able to extend leases again meaning they will either be looking to buy their current car or another used one which puts pressure on stock, the rest will order a new car meaning more people than normal will want to order one, meaning the wait will be longer as factories can only produce so many in a given time.

That’s before labour shortages, product shortages etc.I think it will be well into 2023 maybe even 2024 before we’re back to normal.

[Fusion777]

Interest rate rises, inflation, NI increase, etc is going to start biting into disposable incomes next year. Both bull and bear factors are present, and who knows what the outcome will be?

[Pica-Pica]

Wills2 said:

What are trying to achieve? Sell the Toyota and buy a new car? If you want to do that then do it, no point trying to second guess stuff, your car has gone up so have all the others, so there is probably little difference in the cost to change.

^ This. Unless you are selling and not replacing in the next year or three.

[Mr Whippy]

In any case, no market demand goes unfulfilled especially if shortages have boosted prices and margin, so once it is fulfilled there will be plenty of supply and prices and timescales will fall.

So cars will flow freely again.

The big question is will the demand remain high while costs of non-discretionary items are rising fast?


Any way, history doesn’t repeat but it rhymes.

Look at 2007-2009.

I bought a Z4 in 2009 for £9,500 that was worth about £16,500 18 months earlier.

Around the same time period petrol went up in price a lot.
£1.30 in 2007/08 iirc. The first tank I put in that Z4 was 89p.


Also note that years later in 13-15, residuals of cars from 08-10 period were very strong as fewer new cars sold. Ie, at 3yrs you’d expect 50% value but they were more like 65-75% retained.


Supply and demand. There’s a shed load of supply to come down soon, and I’ve got this feeling there will be little appetite or ability to pay for it at these prices!

[kambites]

Nickbrapp said:

The chip shortage will go way beyond 2022, think about all the people who’ve extended leases or PCPS or generally just hanging into cars for another year, lots of these won’t be able to extend leases again meaning they will either be looking to buy their current car or another used one which puts pressure on stock, the rest will order a new car meaning more people than normal will want to order one, meaning the wait will be longer as factories can only produce so many in a given time.

That’s before labour shortages, product shortages etc.I think it will be well into 2023 maybe even 2024 before we’re back to normal.

Yep, plenty of small generic silicon devices already have lead times leading well into 2023; not automotive specific bits but simple things like bus retimers and buffers which car manufacturers use in their millions... relying on a "just in time" procurement model has been shown to be what it always was when you think about it - dangerous!

Of course one big problem for the automotive industry in the current climate is that it's competing with sectors which have far higher per-unit profit margins.

[babelfish]

Bunting2010 said:

We are looking to purchase another car

we paid 29k for a toyota from main dealer 29k in Jun this year...we buy any car are offering 31k today. garage prices at Toyota are hitting 34-35k

Should we wait. will the used car market level out once the chip shortage is dealt with. we looked at a brandnew audi 1 year wait list due to the chip shortage.

crazy times. below factors will limited used stock

-chip shortage
-people holding on to older cars for longer as being reluctant to move to electric cars. or worried tech may move fast and new electric car will be worth less.
-people holding on to old cars due to unpredictable economy and rising living costs.

what are you trying to achieve?

profit?

cost to change?

[Takemeaway]

Bunting2010 said:

We are looking to purchase another car

we paid 29k for a toyota from main dealer 29k in Jun this year...we buy any car are offering 31k today. garage prices at Toyota are hitting 34-35k

Should we wait. will the used car market level out once the chip shortage is dealt with. we looked at a brandnew audi 1 year wait list due to the chip shortage.

crazy times. below factors will limited used stock

-chip shortage
-people holding on to older cars for longer as being reluctant to move to electric cars. or worried tech may move fast and new electric car will be worth less.
-people holding on to old cars due to unpredictable economy and rising living costs.

Sell it now and buy a new one car £5k - cannot lose

[jason61c]

chip shortage is already reducing. 6 months, its gone, 4 months after that there's new cars rolling out of factories at a mega rate.

Most likely.....

Well in my world lead times are dropping again.

[Dbz2021]

Nickbrapp said:

The chip shortage will go way beyond 2022, think about all the people who’ve extended leases or PCPS or generally just hanging into cars for another year, lots of these won’t be able to extend leases again meaning they will either be looking to buy their current car or another used one which puts pressure on stock, the rest will order a new car meaning more people than normal will want to order one, meaning the wait will be longer as factories can only produce so many in a given time.

That’s before labour shortages, product shortages etc.I think it will be well into 2023 maybe even 2024 before we’re back to normal.

actually chip shortage is improving.
I'd predict by end of 2022 everything is back to normal.

[Greggymagic]

We're still holding off. Just can't quite justify spending the sums required to get into anything half decent.

Kodiaqs are what we're looking for because we want petrol but they seem to be nearly as expensive as XC90s.

People must be buying as they're not coming down.

[Theoldguard]

Its very unpredictable at the minute, and it seems to be a mixed picture with different manufacturers being in a different places in terms of chips.

A good up to date article here covering the main manufacturers and their current position.

https://www.autocar.co.uk/car-news/business-tech%2...

Alot already been covered by others but if your trying to time the market then it is very difficult to do, with inflation still increasing and likely to hit 6% by early next year and reports it will not be back under control for another 2 years then without decent pay increases everyone is going to financially worse off, add to this another couple of IR rises next year and there may not be that ready appetite for a new car purchase when normality returns. So lots to think about especially when you throw EVs into the mix as the article says some manufacturers are now looking to move to EVs when things recover and phase out their ICE line of vehicles ahead of time.

I also worry about some of the vehicles being produced now and for the past 6 months as many do not have the full spec list with heated seats, certain navigation systems, wireless charging, parking cameras amongst a number of items being dropped in order to get the vehicle to the customer.

It's a bit of a mess, but there does seem to be more confidence now that towards the end of next year we will see more normal lead times and availability of new vehicles, my guess is once dealerships are in this position they will not be paying the premium prices seen now for limited used stock and that will send prices through the supply chain at auction etc downwards.

I am personally staying clear until we are back to steady supply and close to pre pandemic prices, Iuntil then im keeping hold of my current car, if it goes on too long I will likely then go straight into an EV anyhow