Used car prices in free fall? And some Masonry!

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Mon 25 Mar 2002 13:51
Used car prices in free fall? And some Masonry! - Alwyn
Todays paper tells me that there are so many new cars being bought on borrowed money that folks could suffer negative equity when they come to sell, as prices for used cars are way down.

Examples are given such as,

Omega new, £19,015. In three years time, £5,100
Vectra new £14,115 In 3 years, £4375.

Data was compiled by industry analysts, yewtree.com

Editor of Fleet News said folks could borrow £10K to buy a car, sell it for £3K in three years but still owe £4K.

So, brummers are not too good an investment right now. Should be some bargains about but what is my old Volvo worth. Thruppence?

I haven't borrowed to change a car in years and hopefully never will. I usually buy three or four year olds from fleet auctions.

As my Masonic friends might say, "Limit you desires in all of life's stations and, rising to eminence by merit, you will live respected and die regretted."

Only the "Limit your desires" part is relevant but I have always liked those words and thought I would share them with you.

BTW I am not giving away any Masonic secrets here. The words can be found in most libraries, in various books.
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Mon 25 Mar 2002 13:56
Re: Used car prices in free fall? And some Masonry - ian (cape town)
removes trousers, puts on apron, does silly walk, and funny handshake.
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Mon 25 Mar 2002 14:05
Re: Used car prices in free fall? And some Masonry - Alwyn
What silly walk? I was asked which buttock I wanted the tatoo on?

So wot about fall in car prices then?
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Mon 25 Mar 2002 14:10
Re: Used car prices in free fall? And some Masonry - ian (cape town)
Prices are always going to be a problem when the keep-up-with-the-joneses brigade offload every 2 years!

Unfortunately folk don't realise that if they "negative equity" their car, they can't just throw the keys back through the dealer window!

and the car industry is going to take a tumble in a few years, when people realise this!
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Mon 25 Mar 2002 14:21
Re: Used car prices in free fall? And some Masonry - Neil
This isn't really news: cars that are sold at bulk discount end up worth less at auction compared with more desirable models whose distributers protect their cars' residual values.

A new Vectra should (hopefully) only ever be bought by fleets. Nearly new, and there are plenty of people willing to save a few thousand on the initial cost.

I'm sure it's been written elsewhere that the best thing to do, if faced with negative equity is to keep hold of the car. . .
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Mon 25 Mar 2002 14:29
Re: Used car prices in free fall? And some Masonry - Paul Robinson
A question Alwyn:

How do you signal your 'eminence', without the usual acknowlegement of an expensive car?

Regards

Paul
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Mon 25 Mar 2002 15:20
Re: Used car prices in free fall? And some Masonry - Alwyn
Paul

Behaviour ? Respect from others?
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Mon 25 Mar 2002 15:33
Re: Used car prices in free fall? And some Masonry - Paul Robinson
In many ways I agree with you, but many will say 'in the commercial world, poeple will want to work with you if they think you can contribute to the success of their venture. If they don't already know you, how are they to know you are successful and therefore likely to bring success to the venture?'
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Mon 25 Mar 2002 16:52
Re: Used car prices in free fall? And some Masonry - David W
Paul,

Then it has to be the tidy 10yr old Mercedes with a personal plate. Remember I've said it before.....

Apreciation of quality, a certain standing in the community but not wasteful or over flash....and comfortable with their own position in life.

Does depend on the venture though...perhaps you wanted more thrust then it has to be a new BMW.

Ouch!

David
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Mon 25 Mar 2002 19:33
Re: Used car prices in free fall? And some Masonry - Paul Robinson
David

What about the argument that all a ten year old Mercedes says is - I can't afford a new Mercedes?

Regards

Paul
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Mon 25 Mar 2002 19:57
Re: Used car prices in free fall? And some Masonry - Alwyn
Paul,

It could be seen as inverse snobbery. "I could easily afford £30K for a new Merc but I am sufficiently happy with my status and image not to require to demonstrate my wealth to others. Those that know me, know"

It's the difference between"old money" and "new money"

BTW that not me I am talking about here. I have a 1990 740.
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Tue 26 Mar 2002 17:07
Re: Used car prices in free fall? And some Masonry - Moosh
Agree with you.

I'm not religious but was reminded last Sunday(Palm Sunday) our Lord rode into Jerusalem on a small donkey not on a white charger !
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Mon 25 Mar 2002 20:17
Re: Used car prices in free fall? And some Masonry - David W
Paul said...

>What about the argument that all a ten year old Mercedes says is - I can't afford a new Mercedes?

Good test Paul...

1. Anyone who thought like that wouldn't be asked to join my venture*.

2. Actually I have a family member not many miles from here who really enjoys his 15yr old 200 series (with less than 50K recorded). He could walk in to the MB dealers tomorrow and buy a new one for 30K...but for what he says.

As I hinted it's the inner self that matters, not the perception of others (can I be a Mason now?).

David

*Is that why my ventures never make more than £10 a week?
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Mon 25 Mar 2002 19:53
Re: Used car prices in free fall? And some Masonry - Alwyn
David,

Your second paragraph sounds like a nice way to live. Well put.
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Mon 25 Mar 2002 19:50
Re: Used car prices in free fall? And some Masonry - Alwyn
Paul,

The eminence referred to is within the Brotherhood. Be a good mason. Learn your lines, regular attendance, good speeches at the Festive Board, charitable work etc.

Get Provincial honours at a good rank "Rising to eminence by merit..........
Takes a long time to reach Grand rank.
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Mon 25 Mar 2002 20:25
Re: Used car prices in free fall? And some Masonry - Paul Robinson
Alwyn

I do understand what you mean, I'm a big believer in Ecclesiastes, but it is difficult to translate these concepts into practical steps in contempory business situations where most trade is done outside your local community and image is all! So how do you signal - I could afford £30K for a new car but for sound reasons choose to drive a 10 year old?

Regards

Paul
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Mon 25 Mar 2002 21:53
Re: Used car prices in free fall? And some Masonry - ChrisR
>So how do you signal - I could afford £30K for a new car but for sound >reasons choose to drive a 10 year old?

By spending the money you save on a £3000 suit, a handful of £200 shirts, a £500 pair of shoes, a calfskin briefcase, and an understated Swiss watch of some kind (preferably in white gold). Make sure the car is immaculate. This is only if you really have to impress these people, mind you. My feeling is, if that's what impresses them, they are not worth impressing. And anyway, if you have to drive yourself, you haven't made it yet.

Chris
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Mon 25 Mar 2002 14:38
Re: Used car prices in free fall? And some Masonry - Honest John
If a punter buys a car on the normal drip and pays off more than 50% only to realise that his car is now worth 30% of the up-front price, he can return it to the finance company and walk away. If he buys on a PCP, he is stuck with the PCP contract. Of course, as Alwyn points out, putting yourself in the hands of the userers is not a good idea in the first place.

HJ
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Mon 25 Mar 2002 15:03
Re: Giving it back - Tom Shaw
Exactly what I did with a Saxo just before I moved last August. Cost Citroen Finance about £3000 in all. I did not realise it was possible to hand goods back while they were still on HP till a friendly dealer told me. As HJ says, long as you've paid 50% of the total price of the goods you can do this.
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Mon 25 Mar 2002 15:36
Re: Used car prices in free fall? And some Masonry - terryb
.......but will you get finance again if you want it for a future purchase?
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Mon 25 Mar 2002 15:37
Re: Used car prices in free fall? And some Masonry - Dan J
Yes - It is a legal requirement for car HP. The finance house, provided you have had the car serviced and it is in "reasonable condition for its age", must accept the car back if you have paid at least 50% of the total cost. It does not impact either positively or negatively on your credit rating.
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Mon 25 Mar 2002 15:35
Re: Used car prices in free fall? And some Masonry - Dan J
HJ's advice is very worthwhile. I, like most people, was unaware of the pay 50% and return legalities of HP - If you look at an HP agreement it'll be there someone in the tiniest possible writing!

For me, I got a 8 month old Vectra for 6 grand less than list and will have paid half in 2 years time when it'll be worth and a third of it's current value. I'll just be taking it back to the finance house to let them sort it out - No restricted mileage PCP issues for me and am also paying lower APR rate...Clever huh!
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Mon 25 Mar 2002 15:41
Re: Used car prices in free fall? And some Masonry - Rita
As I am your more than average drip, could someone enlighten me as to the meaning of both "the normal drip" and "the PCP contract" as referred to by HJ.

Thank you

Rita'
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Mon 25 Mar 2002 15:55
Re: normal drip; PCP - jack
Rita:
normal drip = usual personal loan from bank or finance package from usual car dealership lenders, where you own the car from outset and pay of your loan at specified interest rate. Usually, the cheapest form of finance is to borrow any extra you need for any purpose via extending/increasing your mortgage.
PCP = a form of Personal Lease Contract "Purchase" as opposed to Business Lease Contract "Purchase"; a contract to lease spread over a particular mileage and time frame where no interest is levied.
HP = Hire Purchase, a special legal situation where you do not own the car until all monies have been paid.
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Mon 25 Mar 2002 15:59
Re: normal drip; PCP - Dan J
I think in HJ's post "normal drip" was referring to bog standard HP where the loan is secured against the car. It is only in this instance where you can return the car after payment > 50%.

Dan
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Mon 25 Mar 2002 16:13
Re: Dan - I am a drip - jack
Sorry Rita, I was wrong but Dan is right.
Reading HJ's post, it is clear he did mean Hire Purchase by "normal drip".
However, to my mind, HP is "special drip" whereas standard loans are "normal drip".
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Mon 25 Mar 2002 22:20
Re: normal drip; PCP - Mike Harvey
Hire purchase has its name because thats what it is. You hire the car, and the purchase bit happens on the last payment, or sometimes an 'option to purchase fee'. The title remains with the finance company until either a settlement figure is paid, that is a final payment prior to the natural conclusion of the loan, or the agreement is complete with all payments paid. This is different to a bank loan, when you borrow the money, and buy the car with it. If you sell the car, you still owe the money to the bank. I used to have great problems in the late 80s trying to give customers the option of a PCP, when most would refuse and take HP because they wanted to own it, which they do not because the HP company owns it. When they do own it, at the end of 2 or 3 yrs, the PX it straight away for another, so what's the point. The 50% bit of an HP agreement is one of the 'haves and thirds' figures written in the agreement. Others' explanations of half is correct, and the third bit means that the HP company may not re-possess a car without a court order when a third of the HP price has been paid off.
Mike
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