Banks are fighting not to go bust themselves and those that are not are cutting back heavily on lending for anything. Watching the Media in the past 48 hours more and more commentators are saying that loans for just about anything will be impossible to get from banks for the foreseeable future as they attempt to keep as much funding as possible.
House prices are going to fall as a result as the huge mortgages are gone forever but what does this now mean for car sales and car prices? What about dealers - must be quite a few struggling out there at the moment. Would be interested to hear from those in the know about how sales are doing at the present time?
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Overall sales down. Prestige marks were hit hard. (Aston/Bentley reducing production, Porsche sales down 25% or so....)
But people still need to buy cars for basic transport. So, smaller, fuel efficient cars will continue to sell.
Many people will hold purchase unless it is absolute necessity.
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Better deals?
Just like the housing market, the one you are selling has gone down though the one your are buying has gone down too. Therefore if you are fortunate to be able to trade up there should be some good deals about.
Any money is not expensive to borrow.
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I would imagine that until the factories can reduce production, there will be a complete glut of pre-registered cars hitting the forecourts, probably still with the wax on!
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It could be getting worse.
Porsche sales down by 26.59 per cent in the year to date (ie January-Aug inclusive) according to SMMT figures but down by 57.8 per cent in August alone.
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I suspect that with all these bankers losing their jobs that luxury car sales are going to be hit big time.
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As I have stated before, 2009 will be even worse.
Things will improve when interest rates are being cut.
No cuts have started so it can only get worse.
(I am expecting FTSE100 sub 4000)
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In this climate it can only be a matter of time before a big car manufacturer goes bust.
Aside from the obvious candidates of GM and Ford, anybody like to take a guess?
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Things will improve when interest rates are being cut. No cuts have started so it can only get worse.
I disagree, interest rates are not high currently so in that case of houses which have suffered around a 15 to 20% drop, in real terms they are cheaper, i.e. the interest on £200k at 5% p/a is more than it is on £160k at 6%.
All it needs is some confidence back in the market.
Take cars, the same applies, a better cash deal can be had today than, say, 12 months ago so while the cost of finance might be slightly more the overall cost is likely to be less, and that is not accounting for lots of favourable finanace offerings from the manufactuers. I.e. 0% over three year on £15k is equal to £2700 off (based on 6% flat std rate) so unless you can negotiate at least that extra £2700 off you are best to take the finance and put you money in a higher rate deposit account (though perhaps not banking sector shares ;-) ).
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Funny this topic should be posted, as I'm going to be choosing a used prestige convertible over the weekend, and I'm really hoping that everyone is desperate to sell for peanuts...
I have researched my options and taken the pulse of the market. The current panic over financial matters should make many owners feel like bailing out before they get hit harder. Never mind that one of the worst summers on record should make sellers glad to see the back of what was once their pride and joy :-)
I shall report back to the BR on how I get on. Surely there has never been a better time in recent memory to buy such a car?!
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Maybe in a few weeks time I'll be able to buy that Aston Martin I've always wanted with my Lloyds TSB shares....NOT!
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Found this in a thread on a housepricecrash forum:
< >
tinyurl.com/47yhnt
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My local Toyota dealer rang me yesterday to ask how was my test drive of new Auris I did 18 months back!
If they can go back to that extent extent, I can feel their desperation!!
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My local Toyota dealer rang me yesterday to ask how was my test drive of new Auris I did 18 months back! If they can go back to that extent extent I can feel their desperation!!
Maybe they want their car back now? ;-)
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These are the tertiary layers - after money becomes short, every discretionary purchase item will fall in price in my view. Pushed on by short money & increasing joblessness, car margins will be squeezed - expect new/nearly new car disposal at 'fantastic' prices. Used car dealers may be in denial but they'll soon be in possession of fast depreciating assets as the Glass's guide will be updated (downwards) more regularly than the Zimbabwe inflation statistics.
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Report in today's The Times says that Jaguar is scaling back output from the end of this month at its Castle Bromwich plant.
It's claimed the market is being supressed by poor consumer confidence and the lack of available finance for car loans.
SNIP - no links to The Times please
Edited by Dynamic Dave on 19/09/2008 at 19:53
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My house trend price says 40% falls by 2011.
My car price trned says I will be paid to drive away a 5 litre Jeep.
I live in hope:-)
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My house trend price says 40% falls by 2011.
its wrong
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>> My house trend price says 40% falls by 2011. its wrong
Yes, 40% fall in house prices seems very conservative now. Many are now predicting even greater falls. I understand that Trevor MacDonald has a prog on next Monday night at 8PM on ITV that will frighten many with large mortgages.
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Report in today's The Times says that Jaguar is scaling back output from the end of this month at its Castle Bromwich plant.
article in my Jag magazine (Oct issue, came through the letter box beginning of week) says that 284 Land Rover workers are being transferred to the XF production facilities as they have full order books and can't make them quick enough...furthermore, demand for the X Type has apparently been higher than expected, put down to the 2.2 auto diesel, albeit the X Type is no longer sold in the USA.
different article said 7,000 orders for XF in this country and 22,000 worldwide
general consensus is that Land Rover has got problems, but Jaguar is doing o.k... which is a bit of a turn around.
Next year there'll be a new XJ so that won't do Jag any harm, as the current one is pretty good, but the styling isn't to everyone's taste, being too retro
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dealers may be in denial but they'll soon be in possession of fast depreciating assets as the Glass's guide will be updated (downwards) more regularly than the Zimbabwe inflation statistics.
Just experienced this with purchase of the s-max - dealer sold it to us at a loss. When dealer complained about selling to us at a loss I responded with words to the effect of "you can sell today at the agreed price or keep a depreciating asset that will worth even less in a months time"
Time to turn the tables - buyers can hold a 'buy' - "for today only will will buy a car from you at fantastic prices" :)
It could get like houses - 1 buyer to every 15 cars...
Word from the dealer was that things are slow but still moving - people still need cars.
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Moonshine, I was recently pondering changing my car (more for 'interest' or fun than any fundamental reason..) but was put off by the appalling depreciation I would have had to crystallize in doing so. It would still have been affordable - but the thing is I didn't want to afford it. Commonsense won the day, sort of, I've decided now to renew my lust & passion for ludicrously large & powerful motorbikes - at least they're justified by the life affirming fun-factor through which large equity loss can be offset. Cars are more & more becoming just 'white goods' to me.
Edited by woodbines on 19/09/2008 at 18:17
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I've seen so few 58 reg cars that I suspect the 'new' market is pretty much dead. I can't wait to see the SMMT figures for Sep.
My guess is that the used market is very slow too. As was said above, in the current uncertain times, with consumer confidence low (an all-time low? It should be), buyers will be holding off until absolutely necessary, and then buying small(er) and economical. So high CO2 model values will drop still further.
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Woodbines - yes, I agree.
If you look at from purely a financial point of view then buying new/nearly new cars is madness.
Borrowing money to buy an asset that will certainly lose value is not sensible. Being sensible isn't much fun, but large powerful motorbikes are :)
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I was invited to test drive the new MG LE500 today. Apparently he only has an allocation of 15 and 9 are already sold before the official launch day tomorrow. Whilst I was there, a lady was dropping off her Smart as a deposit and signing the paperwork.
However, the thing that has put me off even considering a swap is the apauling trade in price I have been offered for my 2004 MGTF 160. Its done 11,000miles and is as new and he offered me £3500, despite CAP telling £4500 for a 58,000 mile example. He recons he wouldnt be able to shift it at anywhere near a profit as everything is in freefall, which incidentally isnt what you want to hear when looking at buying a new car!!
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Best to avoid French & Italian cars I would not touch one with the proverbial ?
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I'm not sure I believe that HP/PCP is especially hard to come by. The higher risks might find it a bit harder but anybody basically creditworthy will be accepted.
What's really killing it is the low volume of house moves consequent on low confidence and sensible mortgage lending - a lot of people have bought cars, renewed kitchens and bathrooms, built conservatories, and bought furniture funded by equity withdrawal when they move - all of those markets are taking a hammering. There will be casualties among durables retailers, and fairly soon unless there's a remarkable recovery.
With cars as with houses, if you think you'll get one cheaper in 6 months, why buy now? Very difficult for a dealer to handle that objection.
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Car sales are going to get hammered in the next few years as people struggle to balance their personal budgets. It's nice to change the car but unless it's knackered you can usually make do with what you've got. I read an article today that the extra Govt. spending needed in the next year will equate to a 5 pence in the Pound income tax rise. Ouch. I predict a Sterling crisis in the next 12 months once people start flogging the sinking Pound.
There's some breath-taking naivety around as well. Was in a large 'chrome & glass' type showroom today trying to do a deal and I asked the salesman (a gormless bag of spanners with a nasty cheap suit on) about the current state of sales. He said sales were holding up because 'no matter how hard things get, people always want a new car'. 'Want' and 'can afford' are rather different I thought but then I realised that this fresh-faced youth was probably still at primary school at the time of the last recession.
I have a friend who is a surveyor - he tells a sour tale of property devaluations. I fear that a lot of people may get a rude awakening.
Edited by The Melting Snowman on 22/09/2008 at 22:15
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Friend turned up today to show off her new motor - An lovely Audi A3 Quattro Sportsline diesel. Brand new cash purchase from a main dealer - you would never believe what she paid for it.......I'm almost tempted.
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Sounds nice and good luck to her. Sounds like she got a bit of a bargain. It is however, now worth a thick wedge less than it was the day before she bought it like any new car.
A well cared for Alfa for example on the other hand, particularly if fitted with the very attractive 2.5 petrol engine can be had for relative loose change. Probably less than the amount your friend's Audi has already depreciated. Someone on here mentioned an especially nice one in Windermere recently................
Looked at in this way it could with a bit of self justifying mental manipulation be seen as free motoring of a six cylinder Italian nature. Makes the fuel cost savings available by choosing to buy a new diesel anonybox seem paltry by comparison.
:-)
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I've had therapy since....:-)
She's a petrol-head, in a good well paid job and single so I don't she worries too much about the depreciation. It was a nice car - leather cream and brown upholstery if a little DFS.
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Brand new cash purchase from a main dealer - you would never believe what she paid for it.......I'm almost tempted.
Which dealership is it? I know someone looking for, of all things, a Q7 and the Audi dealers he's tried are quoting list! One had a ex-demo car and they said the price was wrong and put it up when he asked about it!!
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One of the Liverpool dealers.
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One of the Liverpool dealers.
Thanks. There's only one!
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I was at a Vauxhall dealership last week and there were a fair number of new cars being sold.
Apparently whilst foot-fall is seriously down most people turning up want to buy. There are plenty of people with money to spend still out there.
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I looked into a Chrysler/Dodge dealership yesterday (whilst waiting for provisional bid at nearby auction), all the new stock had A4 notices, proclaiming the vehicles were to be sold at 'cost' price, so ignore the sticker £$£$.
The young salesman, who seemed to be glued to his chair, did roughly calculate the 'saving' as about £2000 on a well equiped £24995 Dodge Nitro! He was true enough, to say they sold at 'cost' but got their profit from an overriding makers bonus. Perhaps you could quote Trading Standars & insist on this additional payment should be made to the customer.
If you wanted to part with so much £$£$ on a heavy depreciator!
I said I'd take another look at the vehicles & pick up a brochure, after.
Was this a 'buying signal'??? Not to this chap - he simply gestured towards a display rack, that there were some 'over there'!!!!
Glad he doesn't need to fight for business!!
VB
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