Car Prices... what the...

AdrianC

Grumpy_chap said:

So, the thing I'd like explained is where is the high demand for cars, that creates the demand side of the supply-demand equation resulting in the strong used car values?

Simples.

You've been driving a lease car for the last three years. It's due to go back. The financier won't extend it. The financier won't sell it to you. Your new car is on order, but won't be delivered for months.

What do you do?

Herzlos

I suspect very few of the people who no longer need a car have actually given them up, most will run them into the ground.

With Covid, car sales more or less stopped for a year, and Covid/Brexit lockdowns have reduced production and demand.

Generally, when there's a reduction in new car sales, used car prices increase a while later (because there's just no supply).


It'll all level out eventually, when supply/demand balance out again, but cars and car parts will cost more due to Brexit.

motorguy

Ibrahim5 said:

Car prices aren't rising on webuyanycar.com. Just been offered lowest ever for mine 

Ours has went up +£5K since Nov 19

21-Nov-19 £20,500

20-Mar-20 £12,270

10-Apr-20 Declined to offer

10-May-20 Declined to offer

08-Jun-20 £18,000

22-Jun-20 £19,000

14-Jul-20 £19,500

29-Jul-20 £21,000

2-Aug-20 £21,500

19-Aug-20 £21,680

4-Sep-20 £23,000

14-Sep-20 £23,000

30-Sep-20 £22,000

7-Oct-20 £21,570

23-Oct-20 £21,710

5-Nov-20 Declined to offer

19-Nov-20 £20,790

15-Dec-20 £21,340

18-Jan-21 £20,210

24-Feb-21 £20,410

06-Mar-21 £19,445

18-Apr-21 £21,405

08-May-21 £23,240

18-May-21 £23,700

27-May-21 £24,500

01-Jun-21 £24,710

19-Jun-21 £25,210

01-Jul-21 £25,410

05-Jul-21 £25,665

motorguy

Grumpy_chap said:

I wonder whether anyone can explain something for me on this?

There is clear indication that used car prices are currently strong.  This is a fundamental outcome of supply and demand.

The supply (or otherwise) of used cars cascades down from the supply of new cars, which there are reported constraints arising from component availability and labour availability impacted because of COVID.  Low supply of news cars.  That joins in a a perfect storm with Osborne Effect because of the promises of great advances in EV plus economic uncertainty so the big fleets are delaying replacements in some cases.  

I understand that immediately after the first lockdown there was a spike in demand as people wished to use a car where they may have used public transport but concerned about social distancing and such like on trains / buses.  I would assume that demand is past.

There is also a localised demand in some areas to avoid ULEZ charges.

However, there must be a massive number of people that simply do not need a car in anything like the way they previously did because of WFH.  So this must result in a reduction of demand for cars that I would expect to far outweigh the public transport and ULEZ demand drivers.

So, the thing I'd like explained is where is the high demand for cars, that creates the demand side of the supply-demand equation resulting in the strong used car values?

I dont think there are that many people in the grand scheme of things who have went from having a car to no car.  Even if you're WFH you're not sitting in the house permanently so you still need a car.

There were millions of transactions that didnt happen which has created a backlog as it were, plus there are issues with new car supply.

Many people are in the cycle of PCPing / leasing a car every three years and they'll likely continue to do so.  

Penelopa.Pitstop

My lease car is more expensive in retail now, than it was in 2019, when I got it brand new. Back then, I had a choice to buy it or lease it. I wasn't sure if I'm going to like it and didn't want to take a risk of unknown course of depreciation (car was already out of production and withdrawn from sale), so leased it.

Was going to buy it from leasing company, last purchase quote from April was £17200, didn't buy it then. Then in June it went up to £19600. So, I'm not planning to buy if any more from lease company, I will just return it. It's a shame, but I already accepted it.

In the meantime, secured another lease car at promotional price, to replace it. Will wait the market out and see what's going on in 18 months. I will still monitor prices of used ones on Autotrader, as I've been doing for years. 

molerat

Strange times, the first time ever that I have had a car where the dealer will give me more than I paid them for it !

Ibrahim5

molerat said:

Strange times, the first time ever that I have had a car where the dealer will give me more than I paid them for it !

Not for me. I paid over £16K and they offer me £245. Disgusting.

Grumpy_chap

Ibrahim5 said:

molerat said:

Strange times, the first time ever that I have had a car where the dealer will give me more than I paid them for it !

Not for me. I paid over £16K and they offer me £245. Disgusting.

I think timescale and the manner in which the car has been kept might well have some impact on this equation.
How long have you had your car?
How has the condition of the car changed in that time?

gord115

Ibrahim5 said:

molerat said:

Strange times, the first time ever that I have had a car where the dealer will give me more than I paid them for it !

Not for me. I paid over £16K and they offer me £245. Disgusting.

Yeah, more info please.

Ibrahim5

I have only had it 16 years.