So 2 lockdowns and now a 3rd...used prices still holding
Discussion
TP321 said:
We are into our 3rd lockdown but I don’t see any evidence of price crashes in the used supermarket segment. If anything supply will shore up and prices rise..
Seems to be holding better than i thought, depends whether you have to sell or not bothered if it does or doesn't,Wright model in a decent colour, low mileage with a perfect service history at a sensible price will sell even on
Christmas eve under lock down. well it would if you can get there.
I was having a conversation elsewhere about this subject. I have to admit I thought it would have collapsed by now, along with many other businesses.
I drove through Tunbridge Wells yesterday on my way home from a medical appointment and it was a ghost town. The number of closed business leaving vacant premises was an eye opener.
In any sort of normal circumstances it would be carnage by now, but this is a once in a lifetime event. There are a number of factors that are currently arresting any sort of collapse or correction, some of these factors are as follows:-
Payment holidays on vehicle finance coupled with a suspension of reposessions.
Payment holidays on Mortgages.
Furlough.
Self Employed grants.
Rent holidays for businesses.
Business rate holidays for businesses.
Business Rate Grants for small businesses.
CBILS loan scheme.
BounceBack Loan scheme.
Deferment of VAT.
Deferment of Self assessment Tax.
A suspension on legally enforceable evictions.
A suspension on house repossessions.
Feel free to add to this list.
Obviously this cannot go on indefinately. There must come a point at which the artificial support is removed. How this occurs will determine how big or how rapid any correction is. For the time being though nothing is going to change. Sit back, relax and have a look again in a years time.
I can't see anything changing for another year.
There has also been a change to bankruptcy laws to make us more like the American System, which is long overdue IMO.
https://blogs.lse.ac.uk/covid19/2020/11/02/reform-...
Ultimately if you remove or block many or all of the mechanisms that exist to trigger distressed sales, you'll logically see very few distressed sales.
I drove through Tunbridge Wells yesterday on my way home from a medical appointment and it was a ghost town. The number of closed business leaving vacant premises was an eye opener.
In any sort of normal circumstances it would be carnage by now, but this is a once in a lifetime event. There are a number of factors that are currently arresting any sort of collapse or correction, some of these factors are as follows:-
Payment holidays on vehicle finance coupled with a suspension of reposessions.
Payment holidays on Mortgages.
Furlough.
Self Employed grants.
Rent holidays for businesses.
Business rate holidays for businesses.
Business Rate Grants for small businesses.
CBILS loan scheme.
BounceBack Loan scheme.
Deferment of VAT.
Deferment of Self assessment Tax.
A suspension on legally enforceable evictions.
A suspension on house repossessions.
Feel free to add to this list.
Obviously this cannot go on indefinately. There must come a point at which the artificial support is removed. How this occurs will determine how big or how rapid any correction is. For the time being though nothing is going to change. Sit back, relax and have a look again in a years time.
I can't see anything changing for another year.
There has also been a change to bankruptcy laws to make us more like the American System, which is long overdue IMO.
https://blogs.lse.ac.uk/covid19/2020/11/02/reform-...
Ultimately if you remove or block many or all of the mechanisms that exist to trigger distressed sales, you'll logically see very few distressed sales.
Edited by 21ATS on Wednesday 6th January 22:24
21ATS said:
I was having a conversation elsewhere about this subject. I have to admit I thought it would have collapsed by now, along with many other businesses.
I drove through Tunbridge Wells yesterday on my home from a medical appointment and it was a ghost town. The number of closed business leaving vacant premises was an eye opener.
In any sort of normal circumstances it would be carnage by now, but this is a once in a lifetime event. There are a number of factors that are currently arresting any sort of collapse or correction, some of these factors are as follows:-
Payment holidays on vehicle finance coupled with a suspension of reposessions.
Payment holidays on Mortgages.
Furlough.
Self Employed grants.
Rent holidays for businesses.
Business rate holidays for businesses.
Business Rate Grants for small businesses.
CBILS loan scheme.
BounceBack Loan scheme.
Deferment of VAT.
Deferment of Self assessment Tax.
A suspension on legally enforceable evictions.
A suspension on house repossessions.
Feel free to add to this list.
Obviously this cannot go on indefinately. There must come a point at which the artificial support is removed. How this occurs will determine how big or how rapid any correction is. For the time being though nothing is going to change. Sit back, relax and have a look again in a years time.
I can't see anything changing for another year.
It's devastating for a lot of business, and I hope those can find away to get though the situation. But also there are new business and established business making a fortune, ones you wouldn't expect. So as long as supply is low they will sell, mid range sports cars like F-type, M5 etc, dealers might struggle to shift these, but they will just slow production down or offer 0% Apr as they have done before. I drove through Tunbridge Wells yesterday on my home from a medical appointment and it was a ghost town. The number of closed business leaving vacant premises was an eye opener.
In any sort of normal circumstances it would be carnage by now, but this is a once in a lifetime event. There are a number of factors that are currently arresting any sort of collapse or correction, some of these factors are as follows:-
Payment holidays on vehicle finance coupled with a suspension of reposessions.
Payment holidays on Mortgages.
Furlough.
Self Employed grants.
Rent holidays for businesses.
Business rate holidays for businesses.
Business Rate Grants for small businesses.
CBILS loan scheme.
BounceBack Loan scheme.
Deferment of VAT.
Deferment of Self assessment Tax.
A suspension on legally enforceable evictions.
A suspension on house repossessions.
Feel free to add to this list.
Obviously this cannot go on indefinately. There must come a point at which the artificial support is removed. How this occurs will determine how big or how rapid any correction is. For the time being though nothing is going to change. Sit back, relax and have a look again in a years time.
I can't see anything changing for another year.
If the market will be like this in another 12 months, who knows, but your not going to get a Lambo with a 20% of sticker in the window.
marky7seven said:
It's devastating for a lot of business, and I hope those can find away to get though the situation. But also there are new business and established business making a fortune, ones you wouldn't expect. So as long as supply is low they will sell, mid range sports cars like F-type, M5 etc, dealers might struggle to shift these, but they will just slow production down or offer 0% Apr as they have done before.
If they market will be like this in another 12 months, who knows, but your not going to get a Lambo with a 25% of sticker in the window.
My own business is up in turnover by around 50% from pre covid levels. We are one of the lucky ones. If they market will be like this in another 12 months, who knows, but your not going to get a Lambo with a 25% of sticker in the window.
Pre covid I was looking for a car. Now I'm not. Simply because I have no idea what's coming over the next 6 to 12 months or longer term. Now is the time to sit on cash or reinvest in the business then see how this all pans out.
As to seeing 25% discount stickers on windows. There's simply an inevitability about it. It might not happen over night, it might not happen in the next 6-12 months but when there are more products available than buyers it will give eventually.
There's only so long any market can be artificially supported.
21ATS said:
Now I'm not. Simply because I have no idea what's coming over the next 6 to 12 months or longer term. Now is the time to sit on cash or reinvest in the business then see how this all pans out.
But you're been sensible, and I might add doing the right thing. But there are lots that aren't (I might be one of those, sorry), so next 6-12 months nothing is changing. marky7seven said:
But you're been sensible, and I might add doing the right thing. But there are lots that aren't (I might be one of those, sorry), so next 6-12 months nothing is changing.
Well there's an element of what would I do with another car?I work from home, I have done for 10 years (office in the garden), so lockdown for me is probably less of a life adjustment than it is for many. That said I own two cars and was looking for third. One daily which is still used and a second car that I'm struggling to use more than twice a month due to lack of destinations.
What would I do with a third car. Especially as what I was looking for are now thin on the ground and asking prices have increased. It seems counter intuitive to be paying more for a car that I have no opportunity to use during a global pandemic.
21ATS said:
marky7seven said:
But you're been sensible, and I might add doing the right thing. But there are lots that aren't (I might be one of those, sorry), so next 6-12 months nothing is changing.
Well there's an element of what would I do with another car?I work from home, I have done for 10 years (office in the garden), so lockdown for me is probably less of a life adjustment than it is for many. That said I own two cars and was looking for third. One daily which is still used and a second car that I'm struggling to use more than twice a month due to lack of destinations.
What would I do with a third car. Especially as what I was looking for are now thin on the ground and asking prices have increased. It seems counter intuitive to be paying more for a car that I have no opportunity to use during a global pandemic.
Lockdowns or no lockdowns, there are always winners and loosers in business.
If Dave isnt making money hand over fist selling high street jewelry because he is now closed, Barry up the road is because he is selling online.
If Trevor is no longer creaming it in from rentals, Mark is from litigation.
Luxury items will always sell, the people who buy them may change but as a whole the economy hasnt shrunk that much. I cant see an established market shrinking very much unless a lockdown was for a long sustained amount of time.
If Dave isnt making money hand over fist selling high street jewelry because he is now closed, Barry up the road is because he is selling online.
If Trevor is no longer creaming it in from rentals, Mark is from litigation.
Luxury items will always sell, the people who buy them may change but as a whole the economy hasnt shrunk that much. I cant see an established market shrinking very much unless a lockdown was for a long sustained amount of time.
DamanC said:
Lockdowns or no lockdowns, there are always winners and loosers in business.
If Dave isnt making money hand over fist selling high street jewelry because he is now closed, Barry up the road is because he is selling online.
If Trevor is no longer creaming it in from rentals, Mark is from litigation.
Luxury items will always sell, the people who buy them may change but as a whole the economy hasnt shrunk that much. I cant see an established market shrinking very much unless a lockdown was for a long sustained amount of time.
I think that’s the exact point. This isn’t a typical recession where people aren’t spending money. This is a recession, in the whole, only because businesses can’t open to take the money. There are of course businesses going under but the majority of them did not have owners who would be buying supercars. Some businesses will have overspent their bounce back loans and there will be some bankruptcies when the repayments have to made but overall it is expected there will be strong spending as normal returns because people have saved money and have been pent up. So new businesses will form to fill the void. If Dave isnt making money hand over fist selling high street jewelry because he is now closed, Barry up the road is because he is selling online.
If Trevor is no longer creaming it in from rentals, Mark is from litigation.
Luxury items will always sell, the people who buy them may change but as a whole the economy hasnt shrunk that much. I cant see an established market shrinking very much unless a lockdown was for a long sustained amount of time.
We will all pay for this is other ways, which will be taxes but those buying these cars can absorb that. There are always doomsayers predicting the crash they want to buy in at and it has happened in 2008 but I think this is a very different situation.
21ATS I have an also exactly the same situation as you, I work from home and own two cars but have just bought a supercar. That said, I have bought sensibly, if there is such a thing, and gone for a car that’s done most of its depreciating.
DamanC said:
Lockdowns or no lockdowns, there are always winners and loosers in business.
If Dave isnt making money hand over fist selling high street jewelry because he is now closed, Barry up the road is because he is selling online.
If Trevor is no longer creaming it in from rentals, Mark is from litigation.
Luxury items will always sell, the people who buy them may change but as a whole the economy hasnt shrunk that much. I cant see an established market shrinking very much unless a lockdown was for a long sustained amount of time.
exactlyIf Dave isnt making money hand over fist selling high street jewelry because he is now closed, Barry up the road is because he is selling online.
If Trevor is no longer creaming it in from rentals, Mark is from litigation.
Luxury items will always sell, the people who buy them may change but as a whole the economy hasnt shrunk that much. I cant see an established market shrinking very much unless a lockdown was for a long sustained amount of time.
not forgetting pent-up demand...
Here's a snapshot of what businesses are doing to survive.
https://www.bbc.co.uk/news/business-55529130
Building up level of debt to tread water and not trade.
This is a reasonable reflection of any business with staff and premises that's forced to close for extended periods of time.
They simply won't be able to trade in the volume required when they re open, if they reopen, to cover their working overheads and new debt liability.
If you think UK Plc will simply reopen and it will business as usual once this pandemic passes you're frankly delusional.
Of course some will win, some will lose. We'll only know the real cost and state of the economy in hindsight once the artifical financial support is removed and the shackles removed from the usual legal avenues to force debtors into a corner.
How does this effect supercars?
Primarily I see the reduced appetite for lenders wanting to finance big ticket cars the single biggest reason values will be squeezed.
You don't need to be Einstien to understand that lenders will not be throwing money at this kind of purchase in the same way they were pre covid. And with somewhere north of 80% of this type of product being bought on finance there will undoubtedly be a squeeze.
It won't dry up, but it will reduce. Those "borderline" cases for borrowing will no longer be eligible for funding. This will lead to oversupply. How big that oversupply is will determine how much of a correction is necessary.
This is assuming the manufacturers have continued to manufacture, which they need to do to remain in business. If they have simply had to stop producing then the bigger question is will they survive at all. Mclaren isn't exactly in rude health. There's only so long you can stomach throttling supply to keep the market stable.
https://www.bbc.co.uk/news/business-55529130
Building up level of debt to tread water and not trade.
This is a reasonable reflection of any business with staff and premises that's forced to close for extended periods of time.
They simply won't be able to trade in the volume required when they re open, if they reopen, to cover their working overheads and new debt liability.
If you think UK Plc will simply reopen and it will business as usual once this pandemic passes you're frankly delusional.
Of course some will win, some will lose. We'll only know the real cost and state of the economy in hindsight once the artifical financial support is removed and the shackles removed from the usual legal avenues to force debtors into a corner.
How does this effect supercars?
Primarily I see the reduced appetite for lenders wanting to finance big ticket cars the single biggest reason values will be squeezed.
You don't need to be Einstien to understand that lenders will not be throwing money at this kind of purchase in the same way they were pre covid. And with somewhere north of 80% of this type of product being bought on finance there will undoubtedly be a squeeze.
It won't dry up, but it will reduce. Those "borderline" cases for borrowing will no longer be eligible for funding. This will lead to oversupply. How big that oversupply is will determine how much of a correction is necessary.
This is assuming the manufacturers have continued to manufacture, which they need to do to remain in business. If they have simply had to stop producing then the bigger question is will they survive at all. Mclaren isn't exactly in rude health. There's only so long you can stomach throttling supply to keep the market stable.
Edited by 21ATS on Thursday 7th January 09:51
21ATS said:
Here's a snapshot of what businesses are doing to survive.
https://www.bbc.co.uk/news/business-55529130
Building up level of debt to tread water and not trade.
This is a reasonable reflection of any business with staff and premises that's forced to close for extended periods of time.
They simply won't be able to trade in the volume required when they re open, if they reopen, to cover their working overheads and new debt liability.
If you think UK Plc will simply reopen and it will business as usual once this pandemic passes you're frankly delusional.
Of course some will win, some will lose. We'll only know the real cost and state of the economy in hindsight once the artifical financial support is removed and the shackles removed from the usual legal avenues to force debtors into a corner.
How does this effect supercars?
Primarily I see the reduced appetite for lenders wanting to finance big ticket cars the single biggest reason values will be squeezed.
You don't need to be Einstien to understand that lenders will not be throwing money at this kind of purchase in the same way they were pre covid. And with somewhere north of 80% of this type of product being bought on finance there will undoubtedly be a squeeze.
It won't dry up, but it will reduce. Those "borderline" cases for borrowing will no longer be eligible for funding. This will lead to oversupply. How big that oversupply is will determine how much of a correction is necessary.
This is assuming the manufacturers have continued to manufacture, which they need to do to remain in business. If they have simply had to stop producing then the bigger question is will they survive at all. Mclaren isn't exactly in rude health. There's only so long you can stomach throttling supply to keep the market stable.
Personally I think you are bending the argument to support the fact you should wait on buying a supercar but time will tell. Borderline applications for finance being cancelled will have zero affect on supercars, it is more likely, as an earlier poster said, to effect M5’s and cars like that. https://www.bbc.co.uk/news/business-55529130
Building up level of debt to tread water and not trade.
This is a reasonable reflection of any business with staff and premises that's forced to close for extended periods of time.
They simply won't be able to trade in the volume required when they re open, if they reopen, to cover their working overheads and new debt liability.
If you think UK Plc will simply reopen and it will business as usual once this pandemic passes you're frankly delusional.
Of course some will win, some will lose. We'll only know the real cost and state of the economy in hindsight once the artifical financial support is removed and the shackles removed from the usual legal avenues to force debtors into a corner.
How does this effect supercars?
Primarily I see the reduced appetite for lenders wanting to finance big ticket cars the single biggest reason values will be squeezed.
You don't need to be Einstien to understand that lenders will not be throwing money at this kind of purchase in the same way they were pre covid. And with somewhere north of 80% of this type of product being bought on finance there will undoubtedly be a squeeze.
It won't dry up, but it will reduce. Those "borderline" cases for borrowing will no longer be eligible for funding. This will lead to oversupply. How big that oversupply is will determine how much of a correction is necessary.
This is assuming the manufacturers have continued to manufacture, which they need to do to remain in business. If they have simply had to stop producing then the bigger question is will they survive at all. Mclaren isn't exactly in rude health. There's only so long you can stomach throttling supply to keep the market stable.
Edited by 21ATS on Thursday 7th January 09:51
Drl22 said:
Personally I think you are bending the argument to support the fact you should wait on buying a supercar but time will tell. Borderline applications for finance being cancelled will have zero affect on supercars, it is more likely, as an earlier poster said, to effect M5’s and cars like that.
I guess we'll know in a year or so's time. Until we have the benefit of hindsight it's all supposition.I'll now not be buying a supercar. I see no downside in that decision. They may not drop (more than usual depreciation), but they are unlikely to increase from where they are now.
I've lived through a few recessions and corrections during my lifetime. I've never experienced anything like this.
One of my clients is a large investment bank, and they own one of the UK largest car finance companies, and they have already started to increase interest rates, only by between .5 and 1%, and tightening lending criteria which is the same that happen in the aftermath of 2008.
I'm pretty sure the government will still keep propping up the hospitality sector for the near future, and support this with quantitative and selling more government bonds. This activity was seriously frowned upon years ago but has become a bit of the norm in the west, and the Chinese have been doing this for a while. How this is going to pan out for the next generation, who knows.
There is a difference between now and 2008, as there is more government support. I'm positive the country will get though this, and with hard working people like yourself the country will rebound. I am concerned there might be a bigger divide than before, but that will take decades to sort.
I'm sure in 6 months time you will feel a little more confident, then when your at that point go for it. But there is no point going now if your heart and mind isn't in the same place, or you won't enjoy the experience. Plus if its your first car of this kind you want to enjoy the research and testing driving part, which you can't do now anyway.
I'm pretty sure the government will still keep propping up the hospitality sector for the near future, and support this with quantitative and selling more government bonds. This activity was seriously frowned upon years ago but has become a bit of the norm in the west, and the Chinese have been doing this for a while. How this is going to pan out for the next generation, who knows.
There is a difference between now and 2008, as there is more government support. I'm positive the country will get though this, and with hard working people like yourself the country will rebound. I am concerned there might be a bigger divide than before, but that will take decades to sort.
I'm sure in 6 months time you will feel a little more confident, then when your at that point go for it. But there is no point going now if your heart and mind isn't in the same place, or you won't enjoy the experience. Plus if its your first car of this kind you want to enjoy the research and testing driving part, which you can't do now anyway.
marky7seven said:
One of my clients is a large investment bank, and they own one of the UK largest car finance companies, and they have already started to increase interest rates, only by between .5 and 1%, and tightening lending criteria which is the same that happen in the aftermath of 2008.
I'm pretty sure the government will still keep propping up the hospitality sector for the near future, and support this with quantitative and selling more government bonds. This activity was seriously frowned upon years ago but has become a bit of the norm in the west, and the Chinese have been doing this for a while. How this is going to pan out for the next generation, who knows.
There is a difference between now and 2008, as there is more government support. I'm positive the country will get though this, and with hard working people like yourself the country will rebound. I am concerned there might be a bigger divide than before, but that will take decades to sort.
I'm sure in 6 months time you will feel a little more confident, then when your at that point go for it. But there is no point going now if your heart and mind isn't in the same place, or you won't enjoy the experience. Plus if its your first car of this kind you want to enjoy the research and testing driving part, which you can't do now anyway.
I'm not sure the hospitality sector is being supported adequately at all. Loans still require repayment. The owners of these businesses tend to be directors of Ltd companies are getting very little or no support at all.I'm pretty sure the government will still keep propping up the hospitality sector for the near future, and support this with quantitative and selling more government bonds. This activity was seriously frowned upon years ago but has become a bit of the norm in the west, and the Chinese have been doing this for a while. How this is going to pan out for the next generation, who knows.
There is a difference between now and 2008, as there is more government support. I'm positive the country will get though this, and with hard working people like yourself the country will rebound. I am concerned there might be a bigger divide than before, but that will take decades to sort.
I'm sure in 6 months time you will feel a little more confident, then when your at that point go for it. But there is no point going now if your heart and mind isn't in the same place, or you won't enjoy the experience. Plus if its your first car of this kind you want to enjoy the research and testing driving part, which you can't do now anyway.
The only people being supported fully are the employees on Furlough. The current unknown is how many of these businesses will exist when these staff are able to return.
I'm happy to sit this one out and watch from the sidelines, like you say my perspective may be very different in 6 months time.
At 51 and reasonably healthy, I'm unlikely to be vaccinated until at least spring, possibly early summer. Unless I get something early as my wife has MS and is classed as vunerable.
I'm not currently missing what I don't have, and even if I did buy something I couldn't really use it anyway.
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