New car deals - or lack of

[jimmy_wrxsti]

Looking for some insight on this, I realise it is odd times but wondering more what's behind this to try and better understand what might happen moving forward.

Around 3-4 weeks ago I had managed to agree figures on a new car (12% discount), discount agreed and then when it came to signing up the dealer I chose (played two off each other) went AWOL to any comms. The other dealer who I was in contact with also did the same, still haven't got a straight answer from one but the other I managed to track the sales person down and they said all discounts now gone but they could get me a new quote at list price, they said prices likely to go up in January. I also noted the manufacturer and the car started dropping off sites like drivethedeal, carwow and Coast2Coast around that time also.

I had thought when looking at this a month ago that there were a few good offers about on new cars due to the lead times and dealers keen to get new car orders in and the offers offset the wait. It seemed to be that way when I started but seems things have changed in a short time. I have also checked other car manufacturers and this seems to be common now, one came back with a £32 discount!

With used prices being silly - the car i was looking at has used 1-2 year old cars around/more than new list - this seems an odder time than i thought it was. With long lead times for new cars, very high used car prices - is it the case that people are currently fine with no discounts and paying huge prices for used cars at the moment and dealers are just following the market trend? Or is there more to it than that?

[ED209]

Simple supply and demand.

[Countdown]

I'm surprised they were offering discounts 3-4 weeks ago. From what i can see prices have been stratospheric for Used cars and "List" for new cars since March.

[wemorgan]

Now, more than ever, you need to be flexible what you buy/lease/PCP if you want the best deal.

[jimmy_wrxsti]

ED209 said:

Simple supply and demand.

I understand the used element for this, but I dont quite get the new side of things. Is it that build slots have been reduced with the shortages and so equally targets/numbers have dropped also and so whilst not as many new car orders, slots available still being filled hence the lack of deals?

[wemorgan]

jimmy_wrxsti said:

I understand the used element for this, but I dont quite get the new side of things. Is it that build slots have been reduced with the shortages and so equally targets/numbers have dropped also and so whilst not as many new car orders, slots available still being filled hence the lack of deals?

it'll be unique to every manufacturer and even down to specific models. Supply chain issues, staff shortages, supplier prices rises, transportation costs are all factors.

[Challo]

wemorgan said:

jimmy_wrxsti said:

I understand the used element for this, but I dont quite get the new side of things. Is it that build slots have been reduced with the shortages and so equally targets/numbers have dropped also and so whilst not as many new car orders, slots available still being filled hence the lack of deals?

it'll be unique to every manufacturer and even down to specific models. Supply chain issues, staff shortages, supplier prices rises, transportation costs are all factors.

My GF works for a leasing company and its very dependent on Manufacturers and Models, but some cars are easy to get than others. Demand has increased significantly, and supply has dropped off a cliff and therefore they don't need to offer discounts to get the cars sold.

Saying that though if you aren't on spec / colours you might get a deal on a car already in the network and registered as that will just be sat on a forecourt today.

[jimmy_wrxsti]

Challo said:

My GF works for a leasing company and its very dependent on Manufacturers and Models, but some cars are easy to get than others. Demand has increased significantly, and supply has dropped off a cliff and therefore they don't need to offer discounts to get the cars sold.

Saying that though if you aren't on spec / colours you might get a deal on a car already in the network and registered as that will just be sat on a forecourt today.

Thanks for the insight, I suppose that's the bit I don't fully get, the demand on new car orders. Used car prices make sense (well why they are like they are currently), but it's the demand for new cars keeping discounts low/non-existing even with the lead times - I am struggling to work that aspect out.

[Jag_NE]

I know Jag is doing 0% APR on some models which is as good as a discount if you are financing.

[msportpanda]

jimmy_wrxsti said:

Thanks for the insight, I suppose that's the bit I don't fully get, the demand on new car orders. Used car prices make sense (well why they are like they are currently), but it's the demand for new cars keeping discounts low/non-existing even with the lead times - I am struggling to work that aspect out.

People are desperate for new cars, used to leasing/pcp/company cars/fleet users so order books going well into the future, quite a few manufacturers have already sold out of their 2022 allocation so no need to offer discounts on stuff that's flying out the door. If someone doesn't want it because there's no discount, there's plenty of others that will take it for full price.

[jimmy_wrxsti]

msportpanda said:

People are desperate for new cars, used to leasing/pcp/company cars/fleet users so order books going well into the future, quite a few manufacturers have already sold out of their 2022 allocation so no need to offer discounts on stuff that's flying out the door. If someone doesn't want it because there's no discount, there's plenty of others that will take it for full price.

I suppose the bit I don't get then is why people are currently desperate for new cars AND used prices are going mental?

Whilst I know with leasing/pcp/company cars/fleet it means we as a country all normally obsessed with new cars, but the current situation has shifted a lot to nearly new/used hence the supply/demand meaning used car prices going up.

What would make sense to me was if manufacturers were also reducing build slots (and therefore targets etc) due to current crisis, hence them filling up with the current reduced demand?

[wemorgan]

jimmy_wrxsti said:

I suppose the bit I don't get then is why people are currently desperate for new cars AND used prices are going mental?

Whilst I know with leasing/pcp/company cars/fleet it means we as a country all normally obsessed with new cars, but the current situation has shifted a lot to nearly new/used hence the supply/demand meaning used car prices going up.

What would make sense to me was if manufacturers were also reducing build slots (and therefore targets etc) due to current crisis, hence them filling up with the current reduced demand?

The issue is primarily falling supply of new cars.

https://www.smmt.co.uk/category/news/

[Challo]

jimmy_wrxsti said:

msportpanda said:

People are desperate for new cars, used to leasing/pcp/company cars/fleet users so order books going well into the future, quite a few manufacturers have already sold out of their 2022 allocation so no need to offer discounts on stuff that's flying out the door. If someone doesn't want it because there's no discount, there's plenty of others that will take it for full price.

I suppose the bit I don't get then is why people are currently desperate for new cars AND used prices are going mental?

Whilst I know with leasing/pcp/company cars/fleet it means we as a country all normally obsessed with new cars, but the current situation has shifted a lot to nearly new/used hence the supply/demand meaning used car prices going up.

What would make sense to me was if manufacturers were also reducing build slots (and therefore targets etc) due to current crisis, hence them filling up with the current reduced demand?

People working from home, COVID has cancelled holidays, people not going out so they might have more money each month. Therefore why not treat themselves to a new car. Changes to London pollution rules mean some people are changing cars to meet the new regulations.

Also I think people extended leases last year and now need to order new.

Add that to limited supply from manufacturers you have your issue.

[Uncle boshy]

jimmy_wrxsti said:

I suppose the bit I don't get then is why people are currently desperate for new cars AND used prices are going mental?

Whilst I know with leasing/pcp/company cars/fleet it means we as a country all normally obsessed with new cars, but the current situation has shifted a lot to nearly new/used hence the supply/demand meaning used car prices going up.

What would make sense to me was if manufacturers were also reducing build slots (and therefore targets etc) due to current crisis, hence them filling up with the current reduced demand?

Manufacturers have reduced their build slots, largely because of issues getting components due to semiconductor supply issues and also less capacity due to covid , not out of choice, but out of necessity. In July this year uk car production was 38% less than last year. Importantly there isn’t a reduction in demand as economy ok, so same number of buyers chasing fewer new cars.

last year covid problems severely limited capacity as factories shut, plus less demand meant less cars entered the supply chain. For example a large manufacturer such would have sent cars into the hire car business and then back into the dealer network as approved cars 12 months later. Globally around 1.4 million fewer cars were produced in 2020 than 2019.

So if you want to change for a new or nearly new car you either wait 9 months plus for the new one ( your old one not in the system as a used car), or you buy nearly new, but there is significantly less stock than previous years in the used system. More people willing to buy nearly new than wait for a build slot. More buyers chasing fewer cars.

You’ve then got increased demand from people who would have brought last year and didn’t in lockdown.. They increase demand, but also reduced used capacity as the car they would have traded in last year is still on their drive.

This then trickles down through the system, impacting all ages of car.

Essentially same number of buyers but less new and used cars available.