Used car pricing in a high inflation / fuel prices world

[SV_WDC]

Toying with the idea of a new Porsche. While I appreciate no one holds a crystal ball has anyone come across proper research (articles, forum posts/tracking, or anything else) that shows what happens to Porsche used car pricing when fuel bills & inflation are rising.

There is quite a lot of research out there for general cars but nothing in the sports car category.

[Fnumber1user]

Think we can quite confidently say the rule book has been rewritten over the last few years... what has been the case previously cannot be relied on in the future IMO. YMMV.

[av185]

A Porsche will be one of the best places for your money guaranteed.

[Cheib]

OP, the biggest consideration is the supply (or rather lack of) until we've had 12 months of car factories operating at near normal levels we won't really have an idea of what is "normal".

Personally I do think the cars enthusiasts buy whether you call them sports, super or classic cars will do okay....preferably naturally aspirated with three pedals.

I just really struggle to see how manufacturers can really get people excited about electric cars for a Sunday morning drive or driving round the NC500?

[MDL111]

I swore never to sell again unless I really have to ... mainly because the 2 times I sold a car, it was both times at the bottom
This week sold my Challenge car and trailer plus some of the others might follow.

I think it will be only a matter of time (say 5 years) until cars that are not true collector cars (I.e. the stuff bought and stored in museum-like spaces by rich guys and brought to invitation only car shows) will drop quite substantially - rising rates will quickly lead to people selling off cars that they don’t need (probably to invest the money into something that generates a return again) and rising costs for petrol, tax as well as restrictions on where you can drive will make it more of a pain. I think that can then quickly turn into a self fulling prophecy, market drops, people suddenly don’t feel so good about their cars that cost them thousands in service and insurance every year anymore and then the drop accelerates

I am not selling because of any of the above though, I am selling as I don’t have storage space for my trailer anymore/my contract was cancelled plus I need the money to have some equity for a potential house purchase (to live in) and finally - after a few 5-digit bills in a row it gets old if your income cratered due to covid and a recovery is now looking unlikely.

To me it sometimes reads like People talk about the car market like people spoke about new economy shares pre dot-com bubble bursting. I would take the positive and the negative with a big dollop of salt, but on a car forum the positive sentiments with a slightly bigger one as car guys usually don’t hope the market completely craters given they likely own one or two cars/are generally interested in them while the majority of people are not.

I drove 1,900 km this week and for the first time I did not take my primary car choice for the trip due to the additional petrol cost - that might play into it a little at some point / people taking fewer drives just for driving’s sake (probably a good thing for the environment, so I’d be happy with that)

Good luck with your decision - I think there was a thread about car pricing recently / I posted something similar then / that might have some more opinions, but I don’t think there was hard data

[MrVert]

Sadly….I think you’re spot on with most of that….

[Lexington59]

These ‘doom glass’ threads always make me smile. Contrary to the outlook on here I’d say the world won’t end for ICE in 2030 and these targets are more than likely to get kicked into the long grass as the whole net zero push becomes politically more and more unpalatable.

Regarding the current bubble you’ll have to see values for the regular stuff start to wane which I don’t think is anywhere near happening yet since the fundamentals still haven’t really changed that much. Do we have reduced demand? I don’t think so yet. Do we have increased supply? Not really as far as I can see but happy to be corrected by anyone closer to the business. Until either of those factors changes prices should remain stable.

I do think you’ll see more and more price rises coming through on new as inflation starts to bite which will also offset any collapse in used prices.

ICE demand will continue for as long as EVs remain inferior. Now if they actually build an EV that has an equivalent ICE range and is under three tonnes in weight then we should start to worry. At that point the sea direction changes completely, and is the time to pick your future classics wisely.

[MDL111]

We are not really talking about EVs replacing the cars though, that is a topic if discussing mainstream cars. My point was regarding increasing costs and difficulty to use in combination with inflation (And increasing rates) driven aspects making the ownership proposition less palatable for people who don’t “need” a discretionary third or fourth car. They might keep their favourite one and sell the rest, which could well have a big impact on (mainstream) weekend cars.

I usually think about GT3 demand in that context - how come hardly anybody (relatively speaking) bought 996 and 997 GT3s and GT2s - is it really only because the new cars are so much more useable/drivable, or is it maybe driven by the fact they no longer loose value like a normal Carrera (for the time being anyway). We have had a low interest, expansionary monetary policy for a very long time now, but that was not always the case and will not continue to be the case forever… how many cars are owned on some type of debt vehicle, will doubling rates impact that? It feels like a lot are financed in the UK with all that talk about monthlies, but not sure that applies to weekend cars as well

I buy my cars with the view that anything I get back if I ever have to sell is a bonus - effectively like a TV with very high running costs. That way I don’t have to worry about the market all that much, but i still find the dynamics interesting. Am sure somebody smarter than I am can make a very good argument why prices of weekend cars will continue to grow and most people are enthusiasts and therefore don’t see them as a tax free way to store some money / won’t shift their funds to other investment classes - and for obvious reasons I would be very happy if that is what the future holds given I don’t really plan to buy any cars but a large percentage of my net worth is currently in cars, would be nice to get some of that back b increasing prices making up for increasing mileage on my cars (and if the figure grows a little I’d obviously be ecstatic)

Back on topic - Maybe there are some charts of the early 90s car prices vs rising rates development? That might at least give something similar.

Need to go for a drive now. Have a good start to the weekend

[EC2]

Anyone who is confident they can guess which way this will go is wrong IMHO. You will always get confirmation bias on PH for prices going up but there are too many variables to be sure of this. Actually, though, I don't care as for most of us one nice weeked ICE sports/GT car is not enough of our net wealth for it to matter materially.

Back on track, I will have a BEV for family/daily duties in a few years time. I'm waiting for solid state batteries but even if these take longer than expected - and they have so far - I'm confident that the tech will be better in 2025/26 when I make the choice.

As for weekend cars, I see lots of us wanting noise, gears, revs and relatively low weight cars to drive for fun but point and shoot high performance BEVs and creeping LEZs will gradually impact on this demand. How it relates to the overall supply of sports/GT cars is unclear but the move to electrification is happening a lot faster than many expected and having a performance car with a tailpipe could be socially unacceptable within a decade.

[Taffy66]

MrVert said:

Sadly….I think you’re spot on with most of that….

Unfortunately I also agree 100%

[Cheib]

MDL111 said:

Back on topic - Maybe there are some charts of the early 90s car prices vs rising rates development? That might at least give something similar.

Need to go for a drive now. Have a good start to the weekend

Early 90's we were coming off a ludicrous car bubble though....when you think of average earnings at the time and the prices which were in real terms probably higher than today it was utterly mental.

I think looking to the future given how difficult it is to enjoy cars on the roads are cars which are great to drive at 60 mph on country roads....so much less power and weight than a modern car. I think it is unlikely we get a re-rating of national speed limit roads to less than 60 mph for a while so those are the ones you need to look to have fun on. For me that probably means cars from say the early 2000's backwards.

[James44]

Lexington59 said:

These ‘doom glass’ threads always make me smile. Contrary to the outlook on here I’d say the world won’t end for ICE in 2030 and these targets are more than likely to get kicked into the long grass as the whole net zero push becomes politically more and more unpalatable.

Regarding the current bubble you’ll have to see values for the regular stuff start to wane which I don’t think is anywhere near happening yet since the fundamentals still haven’t really changed that much. Do we have reduced demand? I don’t think so yet. Do we have increased supply? Not really as far as I can see but happy to be corrected by anyone closer to the business. Until either of those factors changes prices should remain stable.

I do think you’ll see more and more price rises coming through on new as inflation starts to bite which will also offset any collapse in used prices.

ICE demand will continue for as long as EVs remain inferior. Now if they actually build an EV that has an equivalent ICE range and is under three tonnes in weight then we should start to worry. At that point the sea direction changes completely, and is the time to pick your future classics wisely.

I think you are wrong on just about every point ....

- EVs are already taking a foothold. have you driven one as your everyday car? Way superior to ICE for 95% of people already. Price needs to come down. It will, especially with petrol prices rising (which outstrip kWh price increases).
- This whole range thing is a non starter. you don't need 300 mile plus range. We do need need a better charging infrastructure. Porsche has just announced that they are building their own network in Germany and a few other countries
- Climate change isn't going way. the younger generation care about it a lot. The fall out from Ukraine will accelerate a low carbon future
- Inflation will soon be 7%. You think your classics and used sportscars will appreciate by 7% pa? Not a chance (apart from those uber collectables). the vast majority of sub £75k ICE cars are going to lose value, a lot of value.
- By driving a ICE in 2030 you will become a social pariah. Like smoking. Have you seen what cities are already doing for clean air?
- Manual cars will go the way of a choke. Soon anyone learning to drive won't know how to use gears let alone be bothered to learn.
- Once the tipping point passes, ICE will become the hunted. Some, like you (and me) will hang on to our gears and clutches, but we will be the minority and we will pay dearly for the privilege because we are relatively wealthy
- Talking of which ... we are going to have a lot less 'wealthy' people who can afford nice sports cars

'doom glass'. I say wake up and smell the coffee.

[Lexington59]

James44 said:

Lexington59 said:

These ‘doom glass’ threads always make me smile. Contrary to the outlook on here I’d say the world won’t end for ICE in 2030 and these targets are more than likely to get kicked into the long grass as the whole net zero push becomes politically more and more unpalatable.

Regarding the current bubble you’ll have to see values for the regular stuff start to wane which I don’t think is anywhere near happening yet since the fundamentals still haven’t really changed that much. Do we have reduced demand? I don’t think so yet. Do we have increased supply? Not really as far as I can see but happy to be corrected by anyone closer to the business. Until either of those factors changes prices should remain stable.

I do think you’ll see more and more price rises coming through on new as inflation starts to bite which will also offset any collapse in used prices.

ICE demand will continue for as long as EVs remain inferior. Now if they actually build an EV that has an equivalent ICE range and is under three tonnes in weight then we should start to worry. At that point the sea direction changes completely, and is the time to pick your future classics wisely.

I think you are wrong on just about every point ....

- EVs are already taking a foothold. have you driven one as your everyday car? Way superior to ICE for 95% of people already. Price needs to come down. It will, especially with petrol prices rising (which outstrip kWh price increases).
- This whole range thing is a non starter. you don't need 300 mile plus range. We do need need a better charging infrastructure. Porsche has just announced that they are building their own network in Germany and a few other countries
- Climate change isn't going way. the younger generation care about it a lot. The fall out from Ukraine will accelerate a low carbon future
- Inflation will soon be 7%. You think your classics and used sportscars will appreciate by 7% pa? Not a chance (apart from those uber collectables). the vast majority of sub £75k ICE cars are going to lose value, a lot of value.
- By driving a ICE in 2030 you will become a social pariah. Like smoking. Have you seen what cities are already doing for clean air?
- Manual cars will go the way of a choke. Soon anyone learning to drive won't know how to use gears let alone be bothered to learn.
- Once the tipping point passes, ICE will become the hunted. Some, like you (and me) will hang on to our gears and clutches, but we will be the minority and we will pay dearly for the privilege because we are relatively wealthy
- Talking of which ... we are going to have a lot less 'wealthy' people who can afford nice sports cars

'doom glass'. I say wake up and smell the coffee.

Aha another EVangelist! It is a religion. I particularly enjoyed your high handed presumption that EVs work perfectly for that magical “95% of people” just plucked out of the air and that I don’t need a 300 mile range either. Thanks for that, I am glad so many EVangelists are around to tell us plebs what to do. Also, anyone who drives ICE in 2030 will be socially ostracised and thrown in jail? Hilarious.

Still, at least one benefit of the mess in the Ukraine is shelving the virtue signalling eco wokeist nonsense by giving everyone free reign to go back to fossil fuel based power generation including coal. Charging those EVs is only going to get cleaner. Every cloud and all that…

[Porsche991992]

James44 said:

I think you are wrong on just about every point ....

- EVs are already taking a foothold. have you driven one as your everyday car? Way superior to ICE for 95% of people already. Price needs to come down. It will, especially with petrol prices rising (which outstrip kWh price increases).
- This whole range thing is a non starter. you don't need 300 mile plus range. We do need need a better charging infrastructure. Porsche has just announced that they are building their own network in Germany and a few other countries
- Climate change isn't going way. the younger generation care about it a lot. The fall out from Ukraine will accelerate a low carbon future
- Inflation will soon be 7%. You think your classics and used sportscars will appreciate by 7% pa? Not a chance (apart from those uber collectables). the vast majority of sub £75k ICE cars are going to lose value, a lot of value.
- By driving a ICE in 2030 you will become a social pariah. Like smoking. Have you seen what cities are already doing for clean air?
- Manual cars will go the way of a choke. Soon anyone learning to drive won't know how to use gears let alone be bothered to learn.
- Once the tipping point passes, ICE will become the hunted. Some, like you (and me) will hang on to our gears and clutches, but we will be the minority and we will pay dearly for the privilege because we are relatively wealthy
- Talking of which ... we are going to have a lot less 'wealthy' people who can afford nice sports cars

'doom glass'. I say wake up and smell the coffee.

Hmm , Hunted yes like Predator ;j when the time comes some of us just have to get to the choppa n this case ..fast ICE 911 car
On a serious note I think you are correct and it is what it is

[av185]

James44 said:

I think you are wrong on just about every point ....

- EVs are already taking a foothold. have you driven one as your everyday car? Way superior to ICE for 95% of people already. Price needs to come down. It will, especially with petrol prices rising (which outstrip kWh price increases).
- This whole range thing is a non starter. you don't need 300 mile plus range. We do need need a better charging infrastructure. Porsche has just announced that they are building their own network in Germany and a few other countries
- Climate change isn't going way. the younger generation care about it a lot. The fall out from Ukraine will accelerate a low carbon future
- Inflation will soon be 7%. You think your classics and used sportscars will appreciate by 7% pa? Not a chance (apart from those uber collectables). the vast majority of sub £75k ICE cars are going to lose value, a lot of value.
- By driving a ICE in 2030 you will become a social pariah. Like smoking. Have you seen what cities are already doing for clean air?
- Manual cars will go the way of a choke. Soon anyone learning to drive won't know how to use gears let alone be bothered to learn.
- Once the tipping point passes, ICE will become the hunted. Some, like you (and me) will hang on to our gears and clutches, but we will be the minority and we will pay dearly for the privilege because we are relatively wealthy
- Talking of which ... we are going to have a lot less 'wealthy' people who can afford nice sports cars

'doom glass'. I say wake up and smell the coffee.

Truly hilarious, especially your extremely wide of the mark points about sub £75k ice car depreciation, social pariahs and manual cars becoming less popular.

[Slippydiff]

Taffy66 said:

MrVert said:

Sadly….I think you’re spot on with most of that….

Unfortunately I also agree 100%

Me too

But I think it’s worse than that.
The UK motorist has always been, and will increasingly so, be a soft target when it comes to raising revenue for our esteemed government. Put simply, a lot of us will accept considerable financial pain for the privilege of going where we want to go, when we want to go, and doing so without having to use public transport. Regrettably the government know this, and takes advantage of it.

I doubt they’ll be a ban on using ICE vehicles anytime soon, but the costs levied by the government to use them will become unsustainable for many.

Rightly or wrongly, I remain unconvinced that the petrol and diesel prices we’re currently being forced to pay are actually indicative of what crude oil currently costs, or indeed any perceived supply issues, they’re more indicative of what the industry thinks it can get away with, and not helped by a government happy to let them do as much, because any increases in cost only serve to bolster the laughable amounts of tax revenue the government raise from fuel sales.

Not content with the amounts of revenue raised from fuel, the ICE car driver will no doubt be forced to pay increased RFL duty, or be charged by the mile, and pay exorbitant fees to use their cars in towns and cities (if indeed they’re allowed to).
ICE engined cars won’t be banned, they’ll merely be taxed off the roads for many owners enthusiasts.

[EC2]

Slippydiff said:

Me too

But I think it’s worse than that.
The UK motorist has always been, and will increasingly so, be a soft target when it comes to raising revenue for our esteemed government. Put simply, a lot of us will accept considerable financial pain for the privilege of going where we want to go, when we want to go, and doing so without having to use public transport. Regrettably the government know this, and takes advantage of it.

I doubt they’ll be a ban on using ICE vehicles anytime soon, but the costs levied by the government to use them will become unsustainable for many.

Rightly or wrongly, I remain unconvinced that the petrol and diesel prices we’re currently being forced to pay are actually indicative of what crude oil currently costs, or indeed any perceived supply issues, they’re more indicative of what the industry thinks it can get away with, and not helped by a government happy to let them do as much, because any increases in cost only serve to bolster the laughable amounts of tax revenue the government raise from fuel sales.

Not content with the amounts of revenue raised from fuel, the ICE car driver will no doubt be forced to pay increased RFL duty, or be charged by the mile, and pay exorbitant fees to use their cars in towns and cities (if indeed they’re allowed to).
ICE engined cars won’t be banned, they’ll merely be taxed off the roads for many owners enthusiasts.

Lots of logic to this. What gets me on PH is how so many people are closed to the debate and just assume that they will be allowed to drive/be able to afford their ICE performance cars. Those who raise the question about not knowing where this will go are regularly shot down with blind faith that what we want to drive will continue. We are all petrolheads but we are a small sub-set of society.

One thing I had seen with a work hat on is that technological change has been massively accelerated by Covid. Buying a new 250g co2/km sports car is going to quickly change to be very rare. I'm getting out of an Italian V8 into a new Carrera (if it ever arrives) but actually a new 'cheap' 911 is likely a bad choice on a 5-10 year view as it is not special enough to be held in high estem by those who are prepared to keep driving performance ICE cars once VED and fuel duty goes north. Those on here with rarer, more special ICE cars (probably pre GPFs) will likely do ok but the next generation are not as invested in tailpipe emission cars. Increasingly the hassle I get from people when I overtake in my Granturismo with bypass valves open might not be worth it. At least the Carrera sounds crap so that will not be an issue!

[Discombobulate]

Lexington59 said:

Aha another EVangelist! It is a religion. I particularly enjoyed your high handed presumption that EVs work perfectly for that magical “95% of people” just plucked out of the air and that I don’t need a 300 mile range either. Thanks for that, I am glad so many EVangelists are around to tell us plebs what to do. Also, anyone who drives ICE in 2030 will be socially ostracised and thrown in jail? Hilarious.

Still, at least one benefit of the mess in the Ukraine is shelving the virtue signalling eco wokeist nonsense by giving everyone free reign to go back to fossil fuel based power generation including coal. Charging those EVs is only going to get cleaner. Every cloud and all that…

95% of people? No way. Is EV better than ICE 95% of the time? Probably. But I have kept some interesting ICE for the other 5%. Best of both worlds.
As for free reign to go back to fossil fuel. Nonsense. Enjoy your petrol while you can.

[f1ten]

It is an interesting subject this. I suspect 3 yrs time values of most used cars will have dropped back more likely to their norm ie. Depreciation from driving off the forecourt. Interest rates will rise maybe not to 2006 levels but they will rise and people losing money on sports cars supercars etc will put off some of the speculators and short term owners plus the gen z types arent into ice cars plus add in green issues and Gov taxes steadily increasing... It all points to most cars dropping. I keep my modern classics for fun not for investment, they are my hobby and passion and I accept it costs money to play.
The amount of debt average Joe is taking to finance cars has fuelled this bull run but when you are dropping probably 10k plus on interest and losing 20k on depreciation, my guess is the masses will cut their consumption of expensive cars.

[Charlie_1]

- EVs are already taking a foothold. have you driven one as your everyday car? Way superior to ICE for 95% of people already. Price needs to come down. It will, especially with petrol prices rising (which outstrip kWh price increases).
Wrong they are not , have driven a Nissan Leaf and a Tesla S so either end of the scale and both are horrid

- This whole range thing is a non starter. you don't need 300 mile plus range. We do need need a better charging infrastructure. Porsche has just announced that they are building their own network in Germany and a few other countries

thats quite an assumption maybe you dont maybe I dont some people do

- Climate change isn't going way. the younger generation care about it a lot. The fall out from Ukraine will accelerate a low carbon future

No such thing & I dont care about the younger generation

- Inflation will soon be 7%. You think your classics and used sportscars will appreciate by 7% pa? Not a chance (apart from those uber collectables). the vast majority of sub £75k ICE cars are going to lose value, a lot of value.

Cars are for fun not investment

- By driving a ICE in 2030 you will become a social pariah. Like smoking. Have you seen what cities are already doing for clean air?

Being classed as a social pariah by a load of morons is not something that bothers me

- Manual cars will go the way of a choke. Soon anyone learning to drive won't know how to use gears let alone be bothered to learn.

You sure ?

- Once the tipping point passes, ICE will become the hunted. Some, like you (and me) will hang on to our gears and clutches, but we will be the minority and we will pay dearly for the privilege because we are relatively wealthy

Whatever
- Talking of which ... we are going to have a lot less 'wealthy' people who can afford nice sports cars

This I agree on