Used cars not selling?
Discussion
Hello all, first time posting here!
Sadly, not the most upbeat of discussion titles but one that is certainly at the forefront of my mind.
As a small-time used car seller, trade has been virtually dead flat since April this year. No matter what I think of as being the reason, some conclusions just don't add up and it seems to me that the only inevitable reason could be a mass slow down in general.
For example, I had an 2006 MX-5 2.0 Sport with very low miles and a high spec. After three months and three significant price drops, it eventually sold. I thought it was a one off (a confusing 'one off' I must add) but no that was not the case. Multiple examples since and virtually no interest in what I have. My prices are not cheap cheap but the cars are of a high standard with low miles etc.
It does seem that the used car market (for me anyway) is non existent at the moment and I am wondering why? Financial armageddon on the way?
Thanks
Sadly, not the most upbeat of discussion titles but one that is certainly at the forefront of my mind.
As a small-time used car seller, trade has been virtually dead flat since April this year. No matter what I think of as being the reason, some conclusions just don't add up and it seems to me that the only inevitable reason could be a mass slow down in general.
For example, I had an 2006 MX-5 2.0 Sport with very low miles and a high spec. After three months and three significant price drops, it eventually sold. I thought it was a one off (a confusing 'one off' I must add) but no that was not the case. Multiple examples since and virtually no interest in what I have. My prices are not cheap cheap but the cars are of a high standard with low miles etc.
It does seem that the used car market (for me anyway) is non existent at the moment and I am wondering why? Financial armageddon on the way?
Thanks
Thank you all for your replies and for your thoughts on the matter. However, I think there are many contributions to the current state of affairs let alone one in particular that is starting to show its head more and more.
One of the big changes I noticed was a serious lack of what I would call 'quality cars'. WBAC single-handedly changed the game by offering low-ball and insulting offers to folks for cars that would of sold easily for more if they were advertised privately on Autotrader for example.
As time has passed combined with massive advertising on all platforms, everyone heard about WBAC and more and more people became there victim. Hats off to British Car Auctions for doing this, they obviously seen that good lots were drying up as most dealers after the recession opened up there own 'part exchange centres' to sell the trade-ins and were quick to capitalize on the market of folks that needed a good quality, affordable run-around. These are cars that would normally be going through the auction.
Now, when WBAC started, people laughed at there offers. People I know would say 'what a bunch of jokers'. However, fast forward a few years and WBAC now has there price offers at a point where people would consider them. More so, they have convinced a lot of people in general (including many replying to this post) that there offer price is the bench mark to what the particular car in question is worth to the trade. Wow. They actually managed to convince seasoned sellers and buyers etc that whay there price of offer is/was is what the car is worth. Many do not realize that BCA owns WBAC.
The offer WBAC make is literally made on the almost guaranteed and educated view that the car will sell for more at the auction thus providing BCA/WBAC with there profits. So, next time you see an offer of £2,500 for a low mileage VW Polo for example, that means they expect to sell that car at auction for £2,800-£3,000 (reality is they fetch A LOT more) and bear in mind the buyer has to be the auction fees of circa £250. Add on a used car check, a wheel refurb, a paint repair or two, a service perhaps, an MOT, a valet, some transport costs, a warranty (if you can) and oh, yes some profit - the party is over.
With every man and his dog now turning to BCA to buy there stock (where a number of them would steer clear from auctions all together) prices are being pushed up for cars that would normally be valued less and thus the cars advertised are over-priced in general. Then, when the seller is going to sell and sees that WBAC is coming up the valuation of £2,500 for the fictitious VW Polo I mentioned (which is now advertised for £4,500 just to make sense of all the expenditure so far) then you see all you are doing is filling the pockets of the auction house. All of a sudden you start to question the whole idea of selling cars for your livlihood.
It's all easy for people to say you are to dear in the first place but I don't take to selling sub-standard cars. I spend the money on them to ensure the car is right. Not everyone is happy to buy the car they hope to buy with high miles, scuffed bumpers, kerbed wheels, various noises, dirty mats, stained interior, needing a service and only a few months left on the MOT, just because it was cheap. Just look at your own ideal preferences for buying a second hand car (that is if you do buy second hand). Everyone is different that I know, however not everyone wants to buy the cheapest shed going because it was the cheapest shed going.
The MX5 example I gave was a classic. There are cheap cars that are not perfect, and there are those that have all the extras and money spent to make them look and drive the part which are going for more. Turns out, the buyers that like the cars that were of the upper end of the market are now very thin on the ground which leads me to my next conclusion... recession and negative outlook.
All the negative news of late will surely not have helped. All these big name store closures can not be over-looked. Brexit fears (I was once skeptical about all the fear driven politics and decided to ignore them, not so much now when you add everything else into the mix). A lot of re-structuring going on in banks with branches closing, more AI on the scene, more money going to Amazon than ever before, more individual and small time business owners on the high street just not making the cut etc etc and all of a sudden things just look dismal. Then the reality of it all hits your door and you see a lack of calls one month to no calls the next. Reduce the prices, still no calls. Hold out because its summer, yes that must be it... keep telling yourself this if you dare.
PCP will no doubt be a factor in why things are quiet for used cars. That bubble will burst I believe unless you get PCP on used cars. Just wait till the flood gates open with all the Audi A1's, A3's and A4's hit the auction along with a million Fiat 500's. The manufacturers/dealers will then realise that the strength of the used car market (which is being used to prop up the low cost PCP deals) is not anywhere as strong as they thought. That A1 going for £199 per month with £199 deposit will soon be £299 per month with £2999 deposit. Plus, at the end of the PCP deal you have nothing to show for all your money paid. A new car is nice with no worries, I do get it, but for those of us wanting to own our assets and use them without being hit for bills at the end of the agreement and having to face the joyous baloon payment, then PCP is not everything. I am alone in my thoughts with this one I believe.
The other factor is the UK Government. Ban the diesel cars, ban the petrol cars, ban all the cars (that will come one day I kid you not). I remember the £500 road tax. Then the free road tax. Now, its the crazy tax system with initial big tax payments on new cars, with low tax after 5 years or whatever it is. Diesel cars are good, petrol is bad. No, wait, Petrol cars are ok but Electric cars are great, no Hybrids are good and Electric is best, no wait, Hybrids are to be banned, all Electric is good, public bus is better, walking is great, trapped in your shared housing scheme with no chance of making it in life is better. That's it.
No one knows where we are going apart from down the tubes. The goal posts change way to fast now and when it comes to trying to sell some decent used cars around the £5k mark so you can live just about seem to be on the cliff edge. It will not be long before all showrooms will just about rid of staff because who needs a salesman. Mechanics of old are finished by 2030 (forget 2040 - folks will want electric much earlier as to avoid complete loss of value in there car). Its looking pretty bleak in my view.
One of the big changes I noticed was a serious lack of what I would call 'quality cars'. WBAC single-handedly changed the game by offering low-ball and insulting offers to folks for cars that would of sold easily for more if they were advertised privately on Autotrader for example.
As time has passed combined with massive advertising on all platforms, everyone heard about WBAC and more and more people became there victim. Hats off to British Car Auctions for doing this, they obviously seen that good lots were drying up as most dealers after the recession opened up there own 'part exchange centres' to sell the trade-ins and were quick to capitalize on the market of folks that needed a good quality, affordable run-around. These are cars that would normally be going through the auction.
Now, when WBAC started, people laughed at there offers. People I know would say 'what a bunch of jokers'. However, fast forward a few years and WBAC now has there price offers at a point where people would consider them. More so, they have convinced a lot of people in general (including many replying to this post) that there offer price is the bench mark to what the particular car in question is worth to the trade. Wow. They actually managed to convince seasoned sellers and buyers etc that whay there price of offer is/was is what the car is worth. Many do not realize that BCA owns WBAC.
The offer WBAC make is literally made on the almost guaranteed and educated view that the car will sell for more at the auction thus providing BCA/WBAC with there profits. So, next time you see an offer of £2,500 for a low mileage VW Polo for example, that means they expect to sell that car at auction for £2,800-£3,000 (reality is they fetch A LOT more) and bear in mind the buyer has to be the auction fees of circa £250. Add on a used car check, a wheel refurb, a paint repair or two, a service perhaps, an MOT, a valet, some transport costs, a warranty (if you can) and oh, yes some profit - the party is over.
With every man and his dog now turning to BCA to buy there stock (where a number of them would steer clear from auctions all together) prices are being pushed up for cars that would normally be valued less and thus the cars advertised are over-priced in general. Then, when the seller is going to sell and sees that WBAC is coming up the valuation of £2,500 for the fictitious VW Polo I mentioned (which is now advertised for £4,500 just to make sense of all the expenditure so far) then you see all you are doing is filling the pockets of the auction house. All of a sudden you start to question the whole idea of selling cars for your livlihood.
It's all easy for people to say you are to dear in the first place but I don't take to selling sub-standard cars. I spend the money on them to ensure the car is right. Not everyone is happy to buy the car they hope to buy with high miles, scuffed bumpers, kerbed wheels, various noises, dirty mats, stained interior, needing a service and only a few months left on the MOT, just because it was cheap. Just look at your own ideal preferences for buying a second hand car (that is if you do buy second hand). Everyone is different that I know, however not everyone wants to buy the cheapest shed going because it was the cheapest shed going.
The MX5 example I gave was a classic. There are cheap cars that are not perfect, and there are those that have all the extras and money spent to make them look and drive the part which are going for more. Turns out, the buyers that like the cars that were of the upper end of the market are now very thin on the ground which leads me to my next conclusion... recession and negative outlook.
All the negative news of late will surely not have helped. All these big name store closures can not be over-looked. Brexit fears (I was once skeptical about all the fear driven politics and decided to ignore them, not so much now when you add everything else into the mix). A lot of re-structuring going on in banks with branches closing, more AI on the scene, more money going to Amazon than ever before, more individual and small time business owners on the high street just not making the cut etc etc and all of a sudden things just look dismal. Then the reality of it all hits your door and you see a lack of calls one month to no calls the next. Reduce the prices, still no calls. Hold out because its summer, yes that must be it... keep telling yourself this if you dare.
PCP will no doubt be a factor in why things are quiet for used cars. That bubble will burst I believe unless you get PCP on used cars. Just wait till the flood gates open with all the Audi A1's, A3's and A4's hit the auction along with a million Fiat 500's. The manufacturers/dealers will then realise that the strength of the used car market (which is being used to prop up the low cost PCP deals) is not anywhere as strong as they thought. That A1 going for £199 per month with £199 deposit will soon be £299 per month with £2999 deposit. Plus, at the end of the PCP deal you have nothing to show for all your money paid. A new car is nice with no worries, I do get it, but for those of us wanting to own our assets and use them without being hit for bills at the end of the agreement and having to face the joyous baloon payment, then PCP is not everything. I am alone in my thoughts with this one I believe.
The other factor is the UK Government. Ban the diesel cars, ban the petrol cars, ban all the cars (that will come one day I kid you not). I remember the £500 road tax. Then the free road tax. Now, its the crazy tax system with initial big tax payments on new cars, with low tax after 5 years or whatever it is. Diesel cars are good, petrol is bad. No, wait, Petrol cars are ok but Electric cars are great, no Hybrids are good and Electric is best, no wait, Hybrids are to be banned, all Electric is good, public bus is better, walking is great, trapped in your shared housing scheme with no chance of making it in life is better. That's it.
No one knows where we are going apart from down the tubes. The goal posts change way to fast now and when it comes to trying to sell some decent used cars around the £5k mark so you can live just about seem to be on the cliff edge. It will not be long before all showrooms will just about rid of staff because who needs a salesman. Mechanics of old are finished by 2030 (forget 2040 - folks will want electric much earlier as to avoid complete loss of value in there car). Its looking pretty bleak in my view.
Well folks, this topic has been an interesting read for me so thanks again for all who have posted a reply.
Sadly things have still not turned around in terms of sales. Out of the 8 cars in stock, I am still sitting with each one and still no interest. I believe pricing is one of the issues, but it’s not one that has been the immediate and most obvious reason.
The dynamic now seems to be that there are very few cash buyers around. This in turn means that those who are the cheapest win (in theory). This has then made the market 'difficult' at certain levels, especially anything under £8,000 and circa seven years old and older. PCP makes sense to those that justify paying a monthly fee for an effectively 'rented' new car. I just always thought there would be those folks who prefer something they can own (live within their means) and at the same time want something that is low miles, good condition and ready to be enjoyed/used. Those that are of this mind set are few on the ground when it comes to my market. That is the biggest and most sudden change I have noticed.
Looking at the numbers, last year was one of my best. In July, August and September I sold 21 cars. Nearly all were under £6,000, all were from 2008 to 2000 in age (yes some were 18 years old!) and all were of a good quality and low miles. Same time this year... next to nothing. What changed all of a sudden? Looking yesterday at the headlines it said the ONS announced a 40 year low in unemployment figures, but my phone is not ringing? I had a mix of convertibles, saloons and estates. Luxury barges to economical estates. All low miles, all effectively mint condition, all mechanically sound. The same is said today of my current stock. However, interest has fallen over the cliff edge. I have just reduced a couple over the weekend and still no bites.
When it comes to recessions, things still tick over. You get the 'it’s the end of the World' feeling at first, but things level out. A correction as it were. Now, I am not so sure. This feels completely different to what I have experienced. I hate to be the one who encourages others to start collecting tins of beans and soup but I do think that may be a plan. Recession is small fry compared to what’s coming this time I believe. I think a major re-organization on a global scale is coming and major changes to the way countries, central banks, economies and currency is controlled and operated. What I am experiencing is the start of the decline, and it is instant. Like a punch in the gut.
Now, I am concerned. I have less than 20k in debts and stock value of around 50k. I think a re-calculation of stock at 40k is more realistic but I am holding out just now. If September and October is a no go then its certain we are on the decline.
I do however believe there will be a rebound at some point. PCP deals are bound to change because they are just like the subprime mortgage scam. Virtually no deposit in some cases with minimal payments per month cannot and will not last. If property now requires you to have a minimum of 20% deposit, then cars will be no different. Finance regulation will be enforced.
In turn, I suspect that more will go back to buying used cars. But, another whirlwind and upset will return when EV's start to infiltrate and the day of reckoning approaches. I mean who voted for killing the car industry at the last election? That 2040 mandate came out of the blue and it has hacked me off ever since. These people would not last in the real working World, that’s why there in politics because all they can do is tell lies. We don't need spin doctors, we need real doctors!
Anyway, back to reading up on emigrating to the USA (it will crash too, but at least Trump likes coal, gas, oil and everything else that is opposite to the 'progressive', politically correct, deep state libtards of today).
Pancakes anyone?
Sadly things have still not turned around in terms of sales. Out of the 8 cars in stock, I am still sitting with each one and still no interest. I believe pricing is one of the issues, but it’s not one that has been the immediate and most obvious reason.
The dynamic now seems to be that there are very few cash buyers around. This in turn means that those who are the cheapest win (in theory). This has then made the market 'difficult' at certain levels, especially anything under £8,000 and circa seven years old and older. PCP makes sense to those that justify paying a monthly fee for an effectively 'rented' new car. I just always thought there would be those folks who prefer something they can own (live within their means) and at the same time want something that is low miles, good condition and ready to be enjoyed/used. Those that are of this mind set are few on the ground when it comes to my market. That is the biggest and most sudden change I have noticed.
Looking at the numbers, last year was one of my best. In July, August and September I sold 21 cars. Nearly all were under £6,000, all were from 2008 to 2000 in age (yes some were 18 years old!) and all were of a good quality and low miles. Same time this year... next to nothing. What changed all of a sudden? Looking yesterday at the headlines it said the ONS announced a 40 year low in unemployment figures, but my phone is not ringing? I had a mix of convertibles, saloons and estates. Luxury barges to economical estates. All low miles, all effectively mint condition, all mechanically sound. The same is said today of my current stock. However, interest has fallen over the cliff edge. I have just reduced a couple over the weekend and still no bites.
When it comes to recessions, things still tick over. You get the 'it’s the end of the World' feeling at first, but things level out. A correction as it were. Now, I am not so sure. This feels completely different to what I have experienced. I hate to be the one who encourages others to start collecting tins of beans and soup but I do think that may be a plan. Recession is small fry compared to what’s coming this time I believe. I think a major re-organization on a global scale is coming and major changes to the way countries, central banks, economies and currency is controlled and operated. What I am experiencing is the start of the decline, and it is instant. Like a punch in the gut.
Now, I am concerned. I have less than 20k in debts and stock value of around 50k. I think a re-calculation of stock at 40k is more realistic but I am holding out just now. If September and October is a no go then its certain we are on the decline.
I do however believe there will be a rebound at some point. PCP deals are bound to change because they are just like the subprime mortgage scam. Virtually no deposit in some cases with minimal payments per month cannot and will not last. If property now requires you to have a minimum of 20% deposit, then cars will be no different. Finance regulation will be enforced.
In turn, I suspect that more will go back to buying used cars. But, another whirlwind and upset will return when EV's start to infiltrate and the day of reckoning approaches. I mean who voted for killing the car industry at the last election? That 2040 mandate came out of the blue and it has hacked me off ever since. These people would not last in the real working World, that’s why there in politics because all they can do is tell lies. We don't need spin doctors, we need real doctors!
Anyway, back to reading up on emigrating to the USA (it will crash too, but at least Trump likes coal, gas, oil and everything else that is opposite to the 'progressive', politically correct, deep state libtards of today).
Pancakes anyone?
The current state of used car prices is in many ways a result of WBAC.
In the past, the normal practice was that the market determined the value of a car. The problem now is mainly due to stock supply and over-pricing.
Less than five years ago, you could buy just about any car where the traditional value of the vehicle was a lot less than where they are now. I remember cars aged 7-10 years old such as BMW X5's (E53) going for less than 12k, BMW M3's going for less than 15k, a 911 C4S around 20k etc etc. Then, very quickly used car values shot through the roof. I mean, they shot for the stars in some cases.
The better end of the used car market such as the cars mentioned above became unobtainable. An X5 became so expensive you just said no. M3's were going for over £20k for the good cars and then even more. And finally a 911 996 model is now the price of a 997 and even then some are twice or even three times the price they used to be. The 'collective, sought after and very rare' became exactly that.
Every man and his dog was pumping up the price because there source was making them do it. Margins were no longer existent on the old price structure.
Then the mindset kicks in across the board (including the punter) and everyone has the belief there car is worth more. Some cars sold as well at the crazy high prices and some still do, however the market is not in agreement. Things need to change as its not healthy. So who is going to start the ball rolling by reducing there car 5k...
In the past, the normal practice was that the market determined the value of a car. The problem now is mainly due to stock supply and over-pricing.
Less than five years ago, you could buy just about any car where the traditional value of the vehicle was a lot less than where they are now. I remember cars aged 7-10 years old such as BMW X5's (E53) going for less than 12k, BMW M3's going for less than 15k, a 911 C4S around 20k etc etc. Then, very quickly used car values shot through the roof. I mean, they shot for the stars in some cases.
The better end of the used car market such as the cars mentioned above became unobtainable. An X5 became so expensive you just said no. M3's were going for over £20k for the good cars and then even more. And finally a 911 996 model is now the price of a 997 and even then some are twice or even three times the price they used to be. The 'collective, sought after and very rare' became exactly that.
Every man and his dog was pumping up the price because there source was making them do it. Margins were no longer existent on the old price structure.
Then the mindset kicks in across the board (including the punter) and everyone has the belief there car is worth more. Some cars sold as well at the crazy high prices and some still do, however the market is not in agreement. Things need to change as its not healthy. So who is going to start the ball rolling by reducing there car 5k...
The other problem of today's market is the buyers!
Just because you have seen a price on Whatcar or Autotrader valuation or WBAC for that matter, does not mean the car that is for sale has to be that price. It is a GUIDE PRICE!!!!
The companies who claim to know the valuation of cars are not selling them themselves (unless your WBAC in which case you low ball everyone so you can punt it at auction). If you were to honestly take on the advice from the guides then just about every car for sale online is above book and beyond the valuation figure.
The other issue is most people know what a car is worth. The amount of private sales that appear now (which is less on some sites as it used to be which is another reason good stock is hard to get) shows people who don't deal with cars on a day-to-day basis yet they are able to just about price the car exactly or too high thus leaving no chance of getting a deal for a genuine buyer or for a dealer to make a profit.
If M3's, Passats or whatever car it may be are being advertised for £6k and the 'guides' are saying £3k poor, £3500 average or £4k good and £4500 trade then why are there none being sold like that! Yet, buyers think that is what they should be. Crazy trying to tell someone this, they just don't get it.
I think a recession is needed sadly.
Paying £4 mill for a F50, £300k for a GT3, £80k for a CSL M3 or £30k for a Supra TT is just plain bonkers and completely unsustainable.
Some cars are worth the money, but not all of them and not at this kind of price range.
Just because you have seen a price on Whatcar or Autotrader valuation or WBAC for that matter, does not mean the car that is for sale has to be that price. It is a GUIDE PRICE!!!!
The companies who claim to know the valuation of cars are not selling them themselves (unless your WBAC in which case you low ball everyone so you can punt it at auction). If you were to honestly take on the advice from the guides then just about every car for sale online is above book and beyond the valuation figure.
The other issue is most people know what a car is worth. The amount of private sales that appear now (which is less on some sites as it used to be which is another reason good stock is hard to get) shows people who don't deal with cars on a day-to-day basis yet they are able to just about price the car exactly or too high thus leaving no chance of getting a deal for a genuine buyer or for a dealer to make a profit.
If M3's, Passats or whatever car it may be are being advertised for £6k and the 'guides' are saying £3k poor, £3500 average or £4k good and £4500 trade then why are there none being sold like that! Yet, buyers think that is what they should be. Crazy trying to tell someone this, they just don't get it.
I think a recession is needed sadly.
Paying £4 mill for a F50, £300k for a GT3, £80k for a CSL M3 or £30k for a Supra TT is just plain bonkers and completely unsustainable.
Some cars are worth the money, but not all of them and not at this kind of price range.
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