Who buys used when it's cheaper to buy new
Discussion
Went to a couple of Skoda dealerships today to see what they had both new and used.
What struck me now having had time to digest some of the numbers I was quoted for various packages is that the used vehicles are in a few cases costing more than what is available new with discount. But it seems the new and used departments are totally separate.
Example on the Octavia
Brand new Petrol Octavia Vrs estate is around £41k new with special paint, but the dealership had 1 available for £32k brand new, over in the used sales they had a 74 plate with less than 1000 miles on the clock for £33.5k, but also a 71 plate with around 25k and some nice options for £27k.
The prices were really all over the place, I would expect PCP finance contribution to help towards the new car, but that price was also for Cash.
Obviously we can't predict where prices will go with more and more EVs hitting the market and how ICE prices will fair over the coming years, but based on these prices buying new with the discount is a no brainer, even if I was to get £20k for it in 4 years It would still work out alot cheaper than leasing over the same period, looking at 21 plates on AT they are anything between £23k - £27k, used just seem overvalued and potential for greater losses and repair bill, overall a greater risk for little upfront saving.
What struck me now having had time to digest some of the numbers I was quoted for various packages is that the used vehicles are in a few cases costing more than what is available new with discount. But it seems the new and used departments are totally separate.
Example on the Octavia
Brand new Petrol Octavia Vrs estate is around £41k new with special paint, but the dealership had 1 available for £32k brand new, over in the used sales they had a 74 plate with less than 1000 miles on the clock for £33.5k, but also a 71 plate with around 25k and some nice options for £27k.
The prices were really all over the place, I would expect PCP finance contribution to help towards the new car, but that price was also for Cash.
Obviously we can't predict where prices will go with more and more EVs hitting the market and how ICE prices will fair over the coming years, but based on these prices buying new with the discount is a no brainer, even if I was to get £20k for it in 4 years It would still work out alot cheaper than leasing over the same period, looking at 21 plates on AT they are anything between £23k - £27k, used just seem overvalued and potential for greater losses and repair bill, overall a greater risk for little upfront saving.
Used car departments often use older pricing models/systems that haven't caught up to current market dynamics
New car sales teams have more flexibility with manufacturer incentives and targets to hit
This inefficiency is particularly pronounced with performance ICE cars right now. Dealers are sometimes desperate to move new ICE stock as they prepare for EV transitions, while used car departments are still pricing based on pre-2023 market conditions when used cars commanded premium pricing.
You have essentially discovered arbitrage in the car market - take advantage of it while it lasts!
New car sales teams have more flexibility with manufacturer incentives and targets to hit
This inefficiency is particularly pronounced with performance ICE cars right now. Dealers are sometimes desperate to move new ICE stock as they prepare for EV transitions, while used car departments are still pricing based on pre-2023 market conditions when used cars commanded premium pricing.
You have essentially discovered arbitrage in the car market - take advantage of it while it lasts!
Going back a bit, I had this with wife’s Tiguan.
Needed it quickly so looked at nearly-new - you had to go back to cars a year old, and pre-facelift, before they were cheaper than discounted new. Dealers wouldn’t budge on the nearly-new ones (and there were loads kicking around -Inchcape group alone had 100 of them).
I asked the salesman we got the new one off and he said some people come in convinced nearly-new is the way to buy a car and, as pointed out in the OP, there are separate sales teams for new and used so the used guy is not about to point out that new might be cheaper.
I think it largely seems to be a VW Group thing - with the way discounts are available and often hefty deposit contributions as well. Having said that, got a Hyundai Kona EV late last year via a broker with a discount that dropped the price to right into the middle of the nearly-new market, some with hefty mileages. I worked hard with our local dealer, including going to their fleet department, but they wouldn’t budge from 10% off new (and that was supported by Hyundai’s Affinity scheme). Broker price was 25% off.
Needed it quickly so looked at nearly-new - you had to go back to cars a year old, and pre-facelift, before they were cheaper than discounted new. Dealers wouldn’t budge on the nearly-new ones (and there were loads kicking around -Inchcape group alone had 100 of them).
I asked the salesman we got the new one off and he said some people come in convinced nearly-new is the way to buy a car and, as pointed out in the OP, there are separate sales teams for new and used so the used guy is not about to point out that new might be cheaper.
I think it largely seems to be a VW Group thing - with the way discounts are available and often hefty deposit contributions as well. Having said that, got a Hyundai Kona EV late last year via a broker with a discount that dropped the price to right into the middle of the nearly-new market, some with hefty mileages. I worked hard with our local dealer, including going to their fleet department, but they wouldn’t budge from 10% off new (and that was supported by Hyundai’s Affinity scheme). Broker price was 25% off.
Theoldguard said:
Went to a couple of Skoda dealerships today to see what they had both new and used.
What struck me now having had time to digest some of the numbers I was quoted for various packages is that the used vehicles are in a few cases costing more than what is available new with discount. But it seems the new and used departments are totally separate.
Example on the Octavia
Brand new Petrol Octavia Vrs estate is around £41k new with special paint, but the dealership had 1 available for £32k brand new, over in the used sales they had a 74 plate with less than 1000 miles on the clock for £33.5k, but also a 71 plate with around 25k and some nice options for £27k.
The prices were really all over the place, I would expect PCP finance contribution to help towards the new car, but that price was also for Cash.
Obviously we can't predict where prices will go with more and more EVs hitting the market and how ICE prices will fair over the coming years, but based on these prices buying new with the discount is a no brainer, even if I was to get £20k for it in 4 years It would still work out alot cheaper than leasing over the same period, looking at 21 plates on AT they are anything between £23k - £27k, used just seem overvalued and potential for greater losses and repair bill, overall a greater risk for little upfront saving.
It looks like the 1-off new one for £32k is the outlier here?What struck me now having had time to digest some of the numbers I was quoted for various packages is that the used vehicles are in a few cases costing more than what is available new with discount. But it seems the new and used departments are totally separate.
Example on the Octavia
Brand new Petrol Octavia Vrs estate is around £41k new with special paint, but the dealership had 1 available for £32k brand new, over in the used sales they had a 74 plate with less than 1000 miles on the clock for £33.5k, but also a 71 plate with around 25k and some nice options for £27k.
The prices were really all over the place, I would expect PCP finance contribution to help towards the new car, but that price was also for Cash.
Obviously we can't predict where prices will go with more and more EVs hitting the market and how ICE prices will fair over the coming years, but based on these prices buying new with the discount is a no brainer, even if I was to get £20k for it in 4 years It would still work out alot cheaper than leasing over the same period, looking at 21 plates on AT they are anything between £23k - £27k, used just seem overvalued and potential for greater losses and repair bill, overall a greater risk for little upfront saving.
So why was that car discounted?
Cancelled order in a horrible colour?
The 'cash prices' of cars mean nothing to most buyers , who will be using finance of some flavour.
I agree, mid 20s of £k for a four year old car seems like a lot to me, one angle to look at is the price divided by the number of years meaningful warranty remaining.
But maybe there's a market of buyers who hate all the lane-keeping and so forth on new cars and are happy to pay top money for 'last of the drivers' cars' or some such nonsense?
OutInTheShed said:
The 'cash prices' of cars mean nothing to most buyers , who will be using finance of some flavour.
I agree, mid 20s of £k for a four year old car seems like a lot to me, one angle to look at is the price divided by the number of years meaningful warranty remaining.
But maybe there's a market of buyers who hate all the lane-keeping and so forth on new cars and are happy to pay top money for 'last of the drivers' cars' or some such nonsense?
It's certainly true most people are only interested in the monthly payment not the sticker price. I agree, mid 20s of £k for a four year old car seems like a lot to me, one angle to look at is the price divided by the number of years meaningful warranty remaining.
But maybe there's a market of buyers who hate all the lane-keeping and so forth on new cars and are happy to pay top money for 'last of the drivers' cars' or some such nonsense?
Maybe people prefer to have fewer nanny features that are only potential money-pits once the warranty ends!
The car was met grey in colour, which I guess is pretty normal colour, nothing offensive about it.
Also got a follow up call from the dealership today to ask if I wanted to proceed as the offer was only valid until end of June and they could not tell me what support would be available in July.
So I did a bit more digging after some of the comments here.
It seems it's not unique to this particular dealership, Simpson Skoda have a page of offers on new cars in June with over £10k off the list price on certain models.
https://www.simpsonsskoda.co.uk/new-car-offers/fla...
Is this normal or a genuine Skoda flash sale clearing out stock, as the only thing holding me back on this is the pressure to get it done and signed off by end of play tomorrow.
Also good point on the finance, they were offering 11.8% on used and 6.8% on New so again New seems like a no brainer.
Also got a follow up call from the dealership today to ask if I wanted to proceed as the offer was only valid until end of June and they could not tell me what support would be available in July.
So I did a bit more digging after some of the comments here.
It seems it's not unique to this particular dealership, Simpson Skoda have a page of offers on new cars in June with over £10k off the list price on certain models.
https://www.simpsonsskoda.co.uk/new-car-offers/fla...
Is this normal or a genuine Skoda flash sale clearing out stock, as the only thing holding me back on this is the pressure to get it done and signed off by end of play tomorrow.
Also good point on the finance, they were offering 11.8% on used and 6.8% on New so again New seems like a no brainer.
Edited by Theoldguard on Sunday 29th June 21:52
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