Fall in used car sales

[Jazoli]

52 minutes ago, Bren said:

Because in the UK we have a disposable society. Go to continental europe and you will see old, battered vehicles that although tatty will be maintained.

In the UK - especially now - many think the MOT test is some kind of service. Lots of badly neglected cars driven by people who don't care and simply do not have the means to look after them properly. Try getting a 10 - 12 year old diesel car repaired that has fuelling / emission issues - workshops are shying away from anything that could be in the workshop for days.

A modern car should be good for over 200k - bigger engined ones even more. Unfortunately many will never see the TLC they deserve to get to that kind of mileage - it costs money to maintain a car properly. And is not as special as getting a new one.

Did you miss the 'if maintained properly' in my post? my Spanish friends only fix their cars when they go wrong, and are no better at maintaining them than their UK counterparts, they do fix them eventually rather than scrap them as it would be financially stupid to scrap them like we do here. 

[sierraman]

Just now, Jazoli said:

Did you miss the 'if maintained properly' in my post? my Spanish friends only fix their cars when they go wrong, and are no better at maintaining them than their UK counterparts, they do fix them eventually rather than scrap them as it would be financially stupid to scrap them like we do here. 

You can’t blame people scrapping a car when it wants a sizeable amount spending and you can foresee trouble ahead. It’s not like inheriting the Acropolis that you’ve some sort of social responsibility to keep them going, you do whatever works best for you financially. 

At risk of repeating myself I chuck them in the bin once they’ve had it or big problems are round the corner that economically wouldn’t make sense. I’ve no patience for offering it to someone who might fix it up, I’ve been down that road and generally they are a nightmare to deal with. 

[Dobloseven]

Two of my children have got "modern" cars to get rid of. Both are convinced they're worth loads of money. Daughter is off to Dubai to work and left  her boyfriend a 66 reg Peugeot 208 with 50k miles to sell. He's hoping for £6k,which sounds a bit strong to me. Youngest son has a 68 reg Civic diesel with about 30k he's hoping for about 12k,which is about what it cost when he bought it at 11 months old. Interested to see how it works out. 

[SiC]

Just now, Dobloseven said:

Youngest son has a 68 reg Civic diesel with about 30k he's hoping for about 12k,which is about what it cost when he bought it at 11 months old

That's actually probably about right in the current market if it's in good condition. Dealers are asking and getting more for the same. 

[Dobloseven]

It is actually a decent car with FSH,etc.He's got it on a PCP and now he doesn't have a long commute, is convinced a 300 quid BMW is the way to go, despite having a five figure pay rise. WCPGW! 

5 minutes ago, SiC said:

That's actually probably about right in the current market if it's in good condition. Dealers are asking and getting more for the same. 

 

[Bren]

32 minutes ago, Jazoli said:

Did you miss the 'if maintained properly' in my post? my Spanish friends only fix their cars when they go wrong, and are no better at maintaining them than their UK counterparts, they do fix them eventually rather than scrap them as it would be financially stupid to scrap them like we do here. 

If. But they aren't. Our obsession with easy credit and newness always wins over.

[SiC]

32 minutes ago, Dobloseven said:

It is actually a decent car with FSH,etc.He's got it on a PCP and now he doesn't have a long commute, is convinced a 300 quid BMW is the way to go, despite having a five figure pay rise. WCPGW! 

 

Cars have never been about buying with the head. Otherwise everyone would be driving around in a Brand new Toyota Auris/Corolla and keeping it till it rotted through in 20+yrs. 

[sierraman]

7 minutes ago, SiC said:

Cars have never been about buying with the head. Otherwise everyone would be driving around in a Brand new Toyota Auris/Corolla and keeping it till it rotted through in 20+yrs. 

That is a very sensible suggestion, those Corolla estate hybrids are hard to argue against as a mode of transport, nothing fancy but it’ll get you from a-b without fuss for 20 years no bother.

[SiC]

18 minutes ago, Bren said:

If. But they aren't. Our obsession with easy credit and newness always wins over.

You realise a lot of cars are bought on finance in Europe with cheap credit too? It's not just a UK phenomena. If you look at the large automotive manufactures, they are large finance organisations themselves.

Car finance isn't even a new thing. I remember the 1100 I had, came with paperwork on its purchase with the finance attached to it. 

[SiC]

5 minutes ago, sierraman said:

That is a very sensible suggestion, those Corolla estate hybrids are hard to argue against as a mode of transport, nothing fancy but it’ll get you from a-b without fuss for 20 years no bother.

If cars were a rational purchase, there would be no need for sports cars, powerful saloons or funky designs. The industry relies on the impulse and irrational purchase decisions to make profits. 

Cheap new cars are dieing out. In the USA there aren't any new cheap cars left. 

Why buy a cheap new car when you can spend the same on a few years older but something nicer? Don't need to factor reliability or cost of maintenance as see above being a irrational purchase for most, thus things not thought about when signing that paperwork. 

[horriblemercedes]

It's an interesting one. When I was a teenager, I thought I'd have fancy new cars all the time from about the age of 25.

By the time I had any money whatsoever, I by now wanted the cars I had fancied as a teenager, which were now cheap used cars. I'm still there more or less - my head hasn't really progressed beyond wanting cars much younger than that. So it has worked out pretty well for me, really. Those cars are now quite rare and expensive, but I got years of cheap motoring out of them until they did.

[Bren]

Just now, SiC said:

You realise a lot of cars are bought on finance in Europe with cheap credit too? It's not just a UK phenomena. If you look at the large automotive manufactures, they are large finance organisations themselves.

Car finance isn't even a new thing. I remember the 1100 I had, came with paperwork on its purchase with the finance attached to it. 

I agree.

It may well change. High cost, job insecurity and no wage growth means  people will go back to older cars as a cost saving exercise.

What I have been trying to point out is that older cars can be a minefield - unless you have a tool kit or know somebody that does an older car can bankcrupt you. Suddenly the £5k you have spent morphs into another £2k on top for major repairs - high prices will continue put people off unless they have no choice but to make an emergency buy.

[SiC]

There are nearly 33 million passenger cars on UK roads. There is 67 million people in the UK. A car for every two people.

Do we even need any more cars made and imported? The country could just keep repairing the existing stock of vehicles and keeping them running, instead of new. Around 1m are scrapped every year. I bet a good proportion of them could be kept running safely.

[sierraman]

You are working on the assumption that the individual could repair it themselves. Most of us are fortunate that we can do most repairs, if you can’t and it goes to the garage for a job and the quote comes back like a Chicago telephone number you can see why people think ‘sack it off’. 

Also the cost of serious engine trouble is likely to be prohibitive, my sister in law has a Volvo D4, the piston rings are goosed meaning it’s chowing through oil at a rate. Common fault on them. Garage price for a strip and replace the rings you would be looking at the thick end of £2-3k. Assuming a garage would go near such a job. 

[chadders]

Sometimes it's a confidence issue.

My eldest sons 15 year old car had a few differing issues over about 6 months or so to the extent neither him nor my missus had much confidence in it. When it failed the MoT on a couple of easily repairable issues it was a reason/excuse to be rid of it. No one wanted to buy it so it was scrapped despite being in relatively good condition.

Round here it's also about a 4 week wait to get a car booked into a garage.

[chris667]

11 hours ago, Asimo said:

This is true. All of the money has been spent over the last 40 years or so, and the British economy now depends on entirely on finance. When I first saw those TV adverts about personal credit ratings I was confused by something utterly outside my experience. But now I get it; punters don’t spend their money, they havn’t got any. They spend their credit allowance. A lifetime in consumer debt is just serfdom re-branded.

This was a really interesting film, if you have the time/inclination:

https://www.bbc.co.uk/iplayer/episode/p04b183c/hypernormalisation

[Dobloseven]

9 hours ago, Dobloseven said:

It is actually a decent car with FSH,etc.He's got it on a PCP and now he doesn't have a long commute, is convinced a 300 quid BMW is the way to go, despite having a five figure pay rise. WCPGW! 

 

Reckons he's sold it to WBAC for 12k.

[Barry Cade]

10 hours ago, sierraman said:

That is a very sensible suggestion, those Corolla estate hybrids are hard to argue against as a mode of transport, nothing fancy but it’ll get you from a-b without fuss for 20 years no bother.

Even this is changing.. I had a couple of those on the back of my truck when they took the huff with being a car, and the CH-R seemed to have similar issues. 

[Cavcraft]

The ones I feel sorry for are the ones who've bought a stupidly over-priced car and had it on finance. Depreciation is bad enough as it is, but factor in maybe £1,500-£2,000 more than the car would have been (pre-price increase due to covid, or whatever) and add the interest fees and some people are going to be looking down both barrels of a very well loaded financial gun.

A trader bought a Zafira off me a few months ago and said 'the smart people are selling their expensive cars, sticking the money in the bank and buying a banger until all the fuss has died down'. 

 

[Dave_Q]

Yeah it's a carbon copy of the last crash in 2008 but with cars instead of houses.

Credit available to anyone who asks, 100% or more loan to equity (got a balloon payment owing on the last car, no probs we'll roll it into the next one) and the whole house of cards set up on the assumption that almost everyone can always make their payments and the asset can be sold for a decent % of what is owed.

If lots of people default at the same time because, for example, they are now spending 4 times as much as they were last year on gas and electric, you could start to see thousands of cars hit the market at once depressing used values so the finance houses can't get their money back. With a corresponding increase in demand for old bangers.

But what can we do, other than stockpile some Micras and Zafiras ready to cash in when the time comes?

[cort16]

It's only a matter of time until we're repairing Vauxhall Vectras with chinese lawn mower engines .

Not all dealers are inflating the prices just to make a load of money the price of stock and the effort that needs to go into sourcing stock has increased too. However there are a lot of dealers announcing record profits this year so you have to imagine some of that is going on.

The new car price have been help steady as most manufacturers have agreements with their dealers which stops them asking more than RRP. In the states they don't and I heard some dealers are asking 30k over list of stuff live RAV's.

I think this may back fire on them though as the OEM's hate it as do customers so it's pushing them towards wanting them to sell direct OEM to Customers.

 

 

[Rust Collector]

20 minutes ago, Dave_Q said:

If lots of people default at the same time because, for example, they are now spending 4 times as much as they were last year on gas and electric, you could start to see thousands of cars hit the market at once depressing used values so the finance houses can't get their money back. With a corresponding increase in demand for old bangers.

I used to have an area finance manager who mentioned that BMW Financial Services (or whatever they're called) had a rough patch a while back as they had been massively overvaluing some models to make the PCP deals more attractive. Come balloon payment time, the cars weren't worth the settlement and apparently they had a huge number of handbacks. He seemed to think that the deficit they ended up with was so significant that they had to go back to the BMW parent company and tug on their sleeve for help. I've had a cursory google to see if I can find a news story to back this up, but it just spams me with links to buy BMW's rather than the information I want...

[chadders]

I seem to remember reading that about a few companies, I can't remember whether BMW was one though.

In my opinion it's very like the 2008 Sub Prime Mortgage crisis in that sales commissions overrode financial common sense. 

[CreepingJesus]

I recall Iveco falling into that trap years ago, and they'd used ridiculous fleet leases to to plump up their market position, which came back to bite them hard at the end of the term. Nearly sunk the company according to some stories.

How does the fleet market play into this situation? After all, they're a big part of what filters down to the lower end of the market after a few years. A few already difficult years of course.

[sierraman]

1 hour ago, cort16 said:

It's only a matter of time until we're repairing Vauxhall Vectras with chinese lawn mower engines .

Not all dealers are inflating the prices just to make a load of money the price of stock and the effort that needs to go into sourcing stock has increased too. However there are a lot of dealers announcing record profits this year so you have to imagine some of that is going on.

The new car price have been help steady as most manufacturers have agreements with their dealers which stops them asking more than RRP. In the states they don't and I heard some dealers are asking 30k over list of stuff live RAV's.

I think this may back fire on them though as the OEM's hate it as do customers so it's pushing them towards wanting them to sell direct OEM to Customers.

 

 

I’ve never understood why they don’t cut the main dealer bollocks out these days and just sell direct. 

[chadders]

Didn't one of the South Korean firms, Daewoo?, try this about 20 years ago?

[cort16]

11 minutes ago, sierraman said:

I’ve never understood why they don’t cut the main dealer bollocks out these days and just sell direct. 

Money and management. The dealers are great at selling cars and the manufacturers generally don't have a friggin clue what goes on day to sell cars.

In the UK they're trying to shift to an agency model for new cars, which means the contract for the sale is between the customer and OEM and the dealers will just deliver the car, service it etc. The sale itself will be handled by the manufacturer.

Apparently one of the reasons Polstar is it's own brand and not part of Volvo is so they could avoid all the existing franchise dealer bollocks in the USA and just sell direct to Customers. 

[Bear]

2 minutes ago, chadders said:

Didn't one of the South Korean firms, Daewoo?, try this about 20 years ago?

Yes, and it became Halfords Autocentres.

The UK's problem - IME - is that car owners get shit work from many garages. Main dealers and indies alike. We can debate the pay/rates/training, but I've encountered very few honest garages and very few honest main dealers, and even fewer proactively helpful ones. The whole experience after "buying" a car of maintaining it - beyond tyres and things where you can see the process - is full of shortcuts, tricks and undisclosed problems.

The only country I know of actively making the used car market stronger is Germany.

Americans keep cars longer, but you could roll into JiffyLube and get an oil change and grease chassis for takeaway money. Auto box specialists would drain and fill for less than $100.

Here - well, the chap that got my SLK in 2012 for a bit took it to a specialist for a fluid change and pin bushing. They charged him, then told him the box was fucked. No recourse for their lies because not knowing cars, he brought it back (which I was delighted about anyway) and told me what had happened - the dipstick cover was undisturbed, the oil, exactly the same colour as when it left, the sump had been wiped clean but screws untouched.  They'd switched it to winter mode so it slurred when he drove off.

When I changed the oil and pin bushing once I had a ramp, everything was factory. They'd done nothing - charged £150 or £200 for a "service", told him he needed a £1500 box rebuild, and in fact hadn't even done the basic work.

My cruiser's plugs - full history of services from a "mechanic" - were original at 82,000 miles. Burned to a crisp.

I can go on. Often do. There's a reason why my car needing a mechanic for stuff I can't do is terrifying and it's 170 used cars worth of experience.

But the state of cars in this country and attitude of owners - that partly lays at the feet of the people who claim to be professionals and charge money to maintain them.

[sierraman]

Garages only want simple straightforward jobs, I get that, I’d be exactly the same, I don’t want to see your 2002 Focus diesel that won’t run right. 

[chadders]

And you wouldn't want an open ended estimate to fix it.

At the end of the day it's a business with good and bad practitioners who need to make a profit, not a charity.