Used Car Values

Discussion in 'General chat' started by aldo, May 9, 2021.

  1. mach one
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    mach one WARLORD Site Supporter

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    as has been said already it is all subjective and as the cost of what you are selling creeps up the cost of what you are buying is probably creeping up at a slightly faster rate

    the second hand car market will be all over the place for a couple of years because of the extremely low car sales during 2020 and what few nearly new low miles car that are about will fetch good money and this will be reflected down the whole second hand market
     
  2. The_Master
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  3. Peter
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    Peter WARLORD Site Supporter

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    Even if true, appears a bit contradictory to me.

    “Cap HPI’s overall prediction is that used car valuations will deflate heavily in the first half of 2021 by about 10% then followed by a minor recovery into 2022. Interestingly, it’s also predicting that demand will outstrip supplies of late-model and approved-used cars well into 2021”.

    When demand outstrips supply, we know what happens...

    Peter
     
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  4. Peter
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    Peter WARLORD Site Supporter

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    Discounts are not as good, according to those trying to buy from new stock.

    Peter
     
  5. Abh29
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    Abh29 Site Supporter

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    Reminds me of when the house prices were going down and further down. Most folk were complaining about it , but I had one client in Windsor are who was looking for it to keep dropping as the house (on a large estate ,lot of similar houses) he wanted was dropping by a similar percentage until the price difference was affordable. He moved.
     
  6. aldo
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    aldo Site Supporter

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    Yes really true about replacement chaps.

    My thought process would be as prev mentioned a cheap lease, which leases don’t seem to be as competitive as previous (blame Brexit ) Or a new car deal again depending on what appetite the dealer has to shift numbers!

    I think I’d regret it too much to sell, so if in doubt do nowt. :)




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  7. mach one
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    mach one WARLORD Site Supporter

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    so so true. you don't want to act in haste then repent at leisure
     
  8. The_Master
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  9. aldo
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    aldo Site Supporter

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    Another 2 your value has increased emails from WBAC since I last replied on here. That said I’ve put about 800 miles on her these last few weeks so doubtful the price has actually increased.

    And during those 800 miles, I enjoyed driving every bit of them


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  10. The_Master
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    I think the reality is that prices are still rising, shortage of used stock of desirable cars, lack of new sales, chip shortages, increased consumer confidence and demand now Covid seems to be mostly under control all contributes, I reckon this will continue for a while.
     
  11. aldo
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    aldo Site Supporter

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    So I’ve now got the supplying dealer to my X5 calling me up.

    Explains that I’ve got a sizeable deposit from the positive equity of my X5 and did I want to change.

    So I asked what current G05 series stock they have and he was like, well nothing really, I was hoping you’d buy new.

    If I placed an order now I would get it February/March time. So I asked if they would guarantee a trade in price now, which they won’t. But by all accounts, he reckons values will stay strong for the foreseeable!

    I specked one up and it came to 75k


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  12. Wynne71
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    Wynne71 WARLORD Site Supporter

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    Interesting. But doesn’t make sense if the values aren’t guaranteed.
     
  13. The_Master
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    The_Master Site Supporter

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    I don't think anyone would guarantee values right now, there's a huge bubble in values at the moment which will burst, trouble is predicting when...... some people are going to get their fingers burnt.
     
  14. Wynne71
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    Wynne71 WARLORD Site Supporter

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    Absolutely. I was thinking of those entering into PCP/finance deals now based upon the higher overall cost of a 1/2/3 year old car. Particularly with a smaller deposit, there will be many, many cases of negative equity very quickly when the market falls. Fine if they are seeing the duration of the deal out, but even then the GFV may have been over inflated.
     
  15. The_Master
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    I wouldn't want to be the person having to set the GFV at the moment, I think the dealers will err on the side of caution set the GFV low to protect themselves leaving the buyer to shoulder the extra interest charges and like you say leaving them potentially locked into a deal for the duration.
     
  16. Spuffington
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    Dealers don’t have any influence over GFV - that’s all down to the finance companies underwriting the products (BMW Financial Services etc). They have always had to take a view on where the market could be in 2-3yrs time as it’s their risk at the end of the day and not really the customers at that point in time.

    Interestingly, I got an updated valuation on Mrs Spuff’s X1 - now being offered £500 more than she paid for it (4k miles more on the clock), which prompted me to check the X5. Now £850 more than I paid for it 2months and 2k miles ago (now £58,850).

    A quick look on AUC was shocking though. My local dealership has a 70 plate 30d with 20k miles (mine has 4.5k and is a 21plate) stickered at £65.5k.
     
  17. The_Master
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    No risk to the customer if the full term is completed of being in negative equity but if the GFV is set low to protect the finance company and you don't want another PCP you would be financing the bubble increase and paying more over the term (unless I'm misunderstanding something here - which might be the case, I'm not a PCP expert)
     
  18. Spuffington
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    I see your point, but at the end of the day a PCP is just another way of financing the depreciation. All things being equal, depreciation will be the same whether a cash purchase or PCP (plus interest) - even if the market readjusts swiftly. An asset bubble of any sort, whether housing or vehicle, means that the owner (or Borrower) suffers during a readjustment.

    Ultimately those that suffer most are those who are locked in and cannot afford the cost of removing negative equity, but that’s not a lenders fault necessarily. Caveat emptor. So long as no mis selling of the product has taken place, then the risk of readjustment is entirely on the person entering into that transaction.

    Unfortunately, what we see more and more is that people always want a scapegoat when it doesn’t go their way. Frequently finance companies/banks/lenders are that scapegoat. Sometimes with good reason where mis selling is concerned. But it’s a shame that very few people seem to either be willing to accept responsibility for their actions or understand the risks of the transaction they are entering into.

    BTW - I’m not taking a pop at anyone here, I’m just trying to even up the conversation. Asset bubbles are generally bad for everyone involved - lenders will have defaults, borrowers take on risk of readjustment at inflated prices and it’s only those lucky enough to broker the middle ground, for a certain period whilst the music is playing, who reap the rewards.
     
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  19. Wynne71
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    Wynne71 WARLORD Site Supporter

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    There are some reasonably sensible PCP options, my wife has “bought” her brand new A1 on PCP with the full intention of purchasing outright at the end of the period, a cash final payment. The depreciation across the 3 years is going to happen anyway, it is the interest that is a further cost. However, at 2.9% on this deal that isn’t such an issue.
    I was stung with PCP when I bought the F30 years ago. Put down £6K and then the monthly payments, a mixture of new work and massively increased mileage made me have to change the car. I lost a shed load after 6 months, but had to suck that up as it wasn’t avoidable.
     
  20. aldo
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    Yep, he said they would continue to check the part exchange value every 2 months until delivery! It didn't and wouldn't feel me with much confidence to go through with that.

    I'm coming up to 2 years in this car come November 5th, so next month I have the MOT to do and then the anticipated wait for the warranty renewal. I do like the car and it's purposeful for the family currently, so I reckon the warranty might be a pay monthly until I decide to change which could be in the next 12-18 months.

    I don't fancy buying new, I'm a bugger for changing so would prove pointless funding as previously mentioned mass depreciation as I expect these premium used values to take a dive probably next March...
     

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