Secondhand car price crash? (Vol. 2)

[Earthdweller]

AceRockatansky said:

PinkHouse said:

Deep Thought said:

AlexNJ89 said:

Because owners are being asked to spend less than 10% of the value of their car in order to prep it for sale, perhaps even get that money back in the asking price if it has had recent spend.

But they are refusing to get the work done, so do they not have the £10k?

It certainly doesn't suggest they're selling the Mclaren to upgrade.

They're refusing to get the work done because - as stated in the video - their either dont believe the car needs the money spending to sell it OR they are trying to pull to wool over any potential buyers eyes and attempting to sell the car on needing work.

AND - looking at it from the sellers perspective, that company is offering only SOR but expecting the seller to stump up £10,000 in prep charges with no guarantee of selling it. They could end up with the car back in 3 months time, no better off. In fact £10K worse off.

There's also no guarantee that that £10k of work the car "needs" will be done before the new buyer picks it up, and the seller is unlikely to know if the car is sold and the new buyer is none the wiser

Won't they get an invoice?

If they get the car back, it will have 10k worth of work done, no?

The dealer DID say that he warranties the cars and that HE bears the cost of ALL warranty work himself so he won’t put his name and personal bank account on something that’s gonna keep coming back like a boomerang


Fair point tbf

SOR it from a “supercar” dealer in Bradford or a renowned marque specialist with a reputation to protect

Choice is yours

[Deep Thought]

AceRockatansky said:

PinkHouse said:

Deep Thought said:

AlexNJ89 said:

Because owners are being asked to spend less than 10% of the value of their car in order to prep it for sale, perhaps even get that money back in the asking price if it has had recent spend.

But they are refusing to get the work done, so do they not have the £10k?

It certainly doesn't suggest they're selling the Mclaren to upgrade.

They're refusing to get the work done because - as stated in the video - their either dont believe the car needs the money spending to sell it OR they are trying to pull to wool over any potential buyers eyes and attempting to sell the car on needing work.

AND - looking at it from the sellers perspective, that company is offering only SOR but expecting the seller to stump up £10,000 in prep charges with no guarantee of selling it. They could end up with the car back in 3 months time, no better off. In fact £10K worse off.

There's also no guarantee that that £10k of work the car "needs" will be done before the new buyer picks it up, and the seller is unlikely to know if the car is sold and the new buyer is none the wiser

Won't they get an invoice?

If they get the car back, it will have 10k worth of work done, no?

AceRockatansky said:

Won't they get an invoice?

If they get the car back, it will have 10k worth of work done, no?

They would but getting the car back after an SOR didnt work out doesnt guarantee the car is worth £10K more (or anywhere near it) either when traded in or when attempting to sell it privately themselves.

I can see why prospective sellers may baulk at that risk.

[Deep Thought]

I bought a runabout recently. Had a budget of up to £5K.

I have to be honest, there were no bargains out there. I certainly didnt see anything that made me want to run out and shout "here take my money".

Bought a 2014 Golf TDI 5 door off a friend for a reasonable price - well, relative to the issues that needed sorting out.

Looking down the line at when i might replace the M2 - not seeing any bargains in performance cars in the £25K to £35K range either.

Inflation dropped back now to 2%, interest rates going to drop soon.....

... it seems car values have weathered the storm?

Edited by Deep Thought on Wednesday 19th June 13:18

[Pistonheadsdicoverer]

Deep Thought said:

I bought a runabout recently. Had a budget of up to £5K.

I have to be honest, there were no bargains out there. I certainly didnt see anything that made me want to run out and shout "here take my money".

Bought a 2014 Golf TDI 5 door off a friend for a reasonable price.

Looking down the line at when i might replace the M2 - not seeing any bargains in performance cars in the £25K to £35K range either.

Inflation dropped back now to 2%, interest rates going to drop soon.....

... it seems car values have weathered the storm?

Remember that there's 2 big elections in the second half of the year that may have an influence on the IR.

[Deep Thought]

Pistonheadsdicoverer said:

Remember that there's 2 big elections in the second half of the year that may have an influence on the IR.

Shouldnt directly - no party can influence the rate the BoE sets.

The main reason for twiddling the interest rate knob seems to be inflation.

[paddy1970]

Deep Thought said:

Shouldnt directly - no party can influence the rate the BoE sets.

The main reason for twiddling the interest rate knob seems to be inflation.

And what the fed does...

[AlexNJ89]

Looking at the H&H auction results from today the classics market is still on it's backside

[AceRockatansky]

Deep Thought said:

They would but getting the car back after an SOR didnt work out doesnt guarantee the car is worth £10K more (or anywhere near it) either when traded in or when attempting to sell it privately themselves.

I can see why prospective sellers may baulk at that risk.

I know it's not worth 10k more, but you still get 10k worth of work done, i.e. wheels painted, stone chips, leaking shocks, service or whatever, so it's not like you get nothing. In the video he wasn't talking about 10k worth of prep on all cars, he said they're that bad they need 10k+ worth of work done.

[Theoldguard]

Deep Thought said:

Inflation dropped back now to 2%, interest rates going to drop soon.....

... it seems car values have weathered the storm?

Edited by Deep Thought on Wednesday 19th June 13:18

It's never as straightforward as that, we have been through a decade or more of low inflation / low interest rates. At that time car prices were alot lower both new and used...lease and PCP deals were also alot more attractive. It was the supply issues that drove up prices alongside additional money in the system. These are both no longer an issue, higher IRs and costs have have broadly flushed out the extra money in the system.

It could be argued that we are back to more normal times following the pandemic upsets and the initial shock and adjustments to the war in Ukraine.

Lower inflation driven mainly by lower energy costs has reduced manufacturing costs globally, lower interest rates allow for lower borrowing, this will push up new car sales as cars become more attainable and offer more flex for manufacturers to lower prices, this will eventually push more cars into the used market, this is when the lower end of the market will fall out.

[macron]

Is insurance now falling and is moderate performance stuff (warm/ hot golf, M140 etc) now holding up?

Appreciate this is not standard, but the URL suggests it's been on for over a year!!

http://www.autotrader.co.uk/car-details/2023052778...

I suppose I'm saying I miss the monthly M140 graph

[r3g]

macron said:

Is insurance now falling and is moderate performance stuff (warm/ hot golf, M140 etc) now holding up?

Appreciate this is not standard, but the URL suggests it's been on for over a year!!

http://www.autotrader.co.uk/car-details/2023052778...

I suppose I'm saying I miss the monthly M140 graph

I assume it's an old ad from 3+ years ago?

Ad said:

Description
PLEASE NOTE DUE TO COVID-19 WE ARE OPEN BY APPOINTMENT ONLY

[Rayny]

r3g said:

macron said:

Is insurance now falling and is moderate performance stuff (warm/ hot golf, M140 etc) now holding up?

Appreciate this is not standard, but the URL suggests it's been on for over a year!!

http://www.autotrader.co.uk/car-details/2023052778...

I suppose I'm saying I miss the monthly M140 graph

I assume it's an old ad from 3+ years ago?

Ad said:

Description
PLEASE NOTE DUE TO COVID-19 WE ARE OPEN BY APPOINTMENT ONLY

Ad is from October 2023, and the price has dropped by more than £2K - I also find it amusing that so many companies still have Covid explanations ...

[macron]

r3g said:

macron said:

Is insurance now falling and is moderate performance stuff (warm/ hot golf, M140 etc) now holding up?

Appreciate this is not standard, but the URL suggests it's been on for over a year!!

http://www.autotrader.co.uk/car-details/2023052778...

I suppose I'm saying I miss the monthly M140 graph

I assume it's an old ad from 3+ years ago?

Ad said:

Description
PLEASE NOTE DUE TO COVID-19 WE ARE OPEN BY APPOINTMENT ONLY

Loads of companies still have that, appointment only, social distancing, obvs reality different!

That golf has bounced up and down, it has been at 17.5, and 20. Like an odd price tracker as I can't tell what they've been comparing it to. But it has been there for ages!!

[Auto810graphy]

Rayny said:

Ad is from October 2023, and the price has dropped by more than £2K - I also find it amusing that so many companies still have Covid explanations ...

It was an additional setting within the Autotrader dealer portal that autofills the bottom of the advert along with another “about the dealership” that gives the standard info on the dealership. Knowing Autotrader it’s in an obscure menu so some have forgotten to remove it.

[Deep Thought]

Theoldguard said:

Deep Thought said:

Inflation dropped back now to 2%, interest rates going to drop soon.....

... it seems car values have weathered the storm?

Edited by Deep Thought on Wednesday 19th June 13:18

It's never as straightforward as that, we have been through a decade or more of low inflation / low interest rates. At that time car prices were alot lower both new and used...lease and PCP deals were also alot more attractive. It was the supply issues that drove up prices alongside additional money in the system. These are both no longer an issue, higher IRs and costs have have broadly flushed out the extra money in the system.

It could be argued that we are back to more normal times following the pandemic upsets and the initial shock and adjustments to the war in Ukraine.

Lower inflation driven mainly by lower energy costs has reduced manufacturing costs globally, lower interest rates allow for lower borrowing, this will push up new car sales as cars become more attainable and offer more flex for manufacturers to lower prices, this will eventually push more cars into the used market, this is when the lower end of the market will fall out.

The storm in question was the "recession" and interest rate hike which, according to global financial experts posting at the time on here was going to drive down used car prices.

And yes, we're in to kicking the can down the road again as to when we might see a notable used car price drop. Something that has been being done now since around March 21.

Granted, ICE used cars are now depreciating again, but it is from the high seen immediately after Covid, rather than a sudden drop.

[Deep Thought]

macron said:

Is insurance now falling and is moderate performance stuff (warm/ hot golf, M140 etc) now holding up?

Appreciate this is not standard, but the URL suggests it's been on for over a year!!

http://www.autotrader.co.uk/car-details/2023052778...

I suppose I'm saying I miss the monthly M140 graph

Still seems to be pretty high for younger drivers (under 35 year olds). Havent seen any notable drops being referenced in the FB groups.

Yeah sort of lost interest in M140i depreciation once we sold it.

I did a cursory check there on CAP HPI on 2019 M140i values, plugging in the miles our car would have had now.

We sold ours March 23, values seemed to hold on OK for the remainder of that year, then can be seen to drop notably. From memory i think we got about £21K for it on a trade in back then. Today its probably worth £16-17K ish on a trade in.

CAP are predicting fairly linear depreciation from here on in for them.

[Mr Mill]

Deep Thought said:

Granted, ICE used cars are now depreciating again, but it is from the high seen immediately after Covid, rather than a sudden drop.

I'm not so sure that's true. Granted there has been no sudden drop - however, the average car on AT is now for sale for 11% less than it was 18 months ago. If we had just been seeing normal depreciation, the average value would have been increasing slightly every month like it did for the decade before covid.

[av185]

May average used car values down just £132 on April according to BCA.

[e-honda]

Compared to 2 years ago

https://www.bca.co.uk/news/bca-values-remain-stead...

[Theoldguard]

Deep Thought said:

The storm in question was the "recession" and interest rate hike which, according to global financial experts posting at the time on here was going to drive down used car prices.

And yes, we're in to kicking the can down the road again as to when we might see a notable used car price drop. Something that has been being done now since around March 21.

Granted, ICE used cars are now depreciating again, but it is from the high seen immediately after Covid, rather than a sudden drop.

There have been falls above what would be considered normal depreciation, it may not have worked it's way fully onto the forecourt but the last couple of months 2023 saw trade prices take a hammering. EVs that were the golden cars of those early post covid days have seen prices there also fall through the floor, anyone who bought one new in the last few years is not going to be a happy bunnie, unlike had you bought one in 2019/20 and sold it in 21/22. It just shows what can happen when supply outstrips demand, I have just come back from a couple of weeks in Spain and all the hire companies there are fully stocked with new fleets from the smallest to the biggest vehicles and it's reflecting the lower hire costs compared to 2 years ago when I was last ther

The BCA chart that was posted earlier shows clearly the difference in average prices the last 2 years, when faced with 11% inflation and even higher on many items cars even standing still are losing vasts amount of money compared to lots of other products, but they weren't standing still they were falling at a time of 11% inflation.

A 3 year old £20k car purchased 2 years ago you will be sitting on a 20-30% or £4k-£6k loss or more depending on how you intend to move it on, that same £20k in a savings account would now have £21.8k or an s&p index linked investment close to £40k....my point being that £20k car would have been closer to £15k at 3 years in more normal times and so the depreciation far lower for the age (maybe £3k-£4k) and less money would have been needed to purchase (borrow).

It's not can kicking, these things do take time to work through and often for people to realise it's over.