Car prices are like house prices now!

Honest John Back Room » Motoring discussion
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Mon 11 Apr 2022 20:00
Car prices are like house prices now! - Warning

I have been hunting around a new car, as my one is many years old.

My budget was around £9k for a family hatchback (or estate) around 40k to 50k (pre pandamic). I was looking at 4 year old cars.

Now even at £14k, I get old junkers which have done a lot of miles and interior looks worn out. Now many of these cars are 6 to 8 years.

I have never bought a new car, I don't do the miles to justify it.

it might be the last petrol car I buy.....before we go electric.

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Mon 11 Apr 2022 20:42
Car prices are like house prices now! - Big John

My budget was around £9k for a family hatchback (or estate) around 40k to 50k (pre pandamic). I was looking at 4 year old cars.

Now even at £14k, I get old junkers which have done a lot of miles and interior looks worn out. Now many of these cars are 6 to 8 years.

I'd concur with that. With my help my son bought a 3 year old S(poverty) spec 1.2 tsi Octavia with less than 20k miles on the clock at the end of 2019 for just less than £8k - Fast forward to early 2022 and the same car 2 + years older with many more miles on would cost over £10k - if you could even find one. Bonkers!

If I was buying a car right now I'd push the boat out a bit and buy new - although you might need to wait for it. There are still some broker deals around if you do lots of homework. EG Skoda Scala on Drivethedeal

Or consider a new Dacia - I sat in a new model Sandero comfort the other day and was actually pretty impressed. The Duster is great value as well.

Edited by Big John on 11/04/2022 at 20:46

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Mon 11 Apr 2022 20:53
Car prices are like house prices now! - badbusdriver

I got curious after reading your post so went on Autotrader.

Not to everyones taste perhaps, and certainly not the best car in its class, but a 2018, 1 owner, 32k mile Vauxhall Insignia 1.5t SRI Sport Tourer for just under £14k?.

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Mon 11 Apr 2022 21:17
Car prices are like house prices now! - Xileno

New Sandero certainly looks a more convincing car than the previous model. There was one parked in the street yesterday and I had a quick look. It's a shame we don't get all the range in the UK, they do a light van that should sell well but might end up competing with the Renault vans.

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Mon 11 Apr 2022 21:38
Car prices are like house prices now! - joegrundy

"Or consider a new Dacia - I sat in a new model Sandero comfort the other day and was actually pretty impressed. The Duster is great value as well."

Me too. Son has just ordered a Duster 90 Comfort. I was tempted to as well, and by the Sandero. They also had a new Jogger and I was tempted by that too, which makes no sense because I'm on my own in the car most of the time and my old i10 has just passed the MOT and is doing an excellent job.

The problem is, of course, that when we fancy something we can find no end of 'good' reasons to justify getting it ...

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Mon 11 Apr 2022 23:09
Car prices are like house prices now! - Andrew-T

The problem is, of course, that when we fancy something we can find no end of 'good' reasons to justify getting it ...

You have to balance the good reasons for not getting it. Unless your present car is in pretty bad shape, there will probably be more of those.

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Mon 11 Apr 2022 22:47
Car prices are like house prices now! - FoxyJukebox
Stiick with what you’ve got. Have an MOT plus get all advisories done, change oil , 4 new reasonable tyres , car wash, full valet and proper wax.
Review in a year
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Tue 12 Apr 2022 08:51
Car prices are like house prices now! - barney100

In the present climate hang on to your old one seems to be the best policy but it's very tempting 'just to have a look' and end up changing the car.

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Tue 12 Apr 2022 10:14
Car prices are like house prices now! - tim10597

Just looking has got me into more trouble over the years than I care to remember! 30 cars over 32 years….. although to be fair, some were company cars and I always had a car of my own too, and a few have been fun cars alongside a daily driver.

With prices as they are, I have no inclination to change the current daily driver, albeit I’m still looking. As with many things, I don’t think the current high prices will come back down anytime soon, though they may soften a bit over time.

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Tue 12 Apr 2022 11:15
Car prices are like house prices now! - Alby Back
I feel it’s probably smart to play the long game now.
If you have a personal “fleet” that suits your current and foreseeable household needs, then it might be clever to just keep going with that for the long term until the market (hopefully) settles and the implications of EV versus ICE and any alternatives become clearer, more developed or more obvious.

I’d only change cars right now if my usage needs changed or one of the vehicles was uneconomical to repair.
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Tue 12 Apr 2022 12:12
Car prices are like house prices now! - Andrew-T
I feel it’s probably smart to play the long game now. If you have a personal “fleet” that suits your current and foreseeable household needs, then it might be clever to just keep going with that for the long term ...

When I bought our Pug 207SW at the end of 2008 I never expected it to be with us more than 13 years later. Previously our longest ownership had been SWMBO's 205 Dturbo, for just over 8 years. The 207 will probably be with us as long as it keeps its clean sheet - the level of maintenance I give it seems to suit it.

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Tue 12 Apr 2022 11:27
Car prices are like house prices now! - Terry W

Uncertainties - both new and s/h car prices - Covid fall out, transition to EV, shortage of new supply, high fuel prices, Brexit impacts etc.

Certainties - new cars tend to be be more expensive than used, it will cost to replace an existing vehicle with something newer, faster, bigger, etc

Conclusions:

  • there is no need to change unless what you have is truly unfit for purpose
  • spending (say) £1000 to fix all that needs fixing, service, full valet, etc for an extra year of use costs much less than replacement
  • if change unavoidable, lease/PCP is a limited commitment given the uncertainties
  • if lease/PCP unaffordable, buy the best you can - no point in replacing one problem with a potential new set of problems.
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Tue 12 Apr 2022 14:54
Car prices are like house prices now! - martin.mc

Six month waiting list for a new Duster and probably the same for a Sandero or Stepway. Used prices are crazy now. Saw a 14 plate Stepway at a local used car dealers, asking just short of 7K.

Edited by martin.mc on 12/04/2022 at 14:56

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Tue 12 Apr 2022 17:44
Car prices are like house prices now! - John F

Are they? I don't think so.

I sold a 3 bed detached house in a nice area in 1980 for £25,000, about five times the price of a then new Ford Sierra, depending on spec. Cars and houses are better specced these days, but five times the price of today's new Ford Mondeo, around £25,000 depending on spec, would go nowhere near buying that house today. And you can get a really good car for half that price which should last you many miles and years if you are a low mileage driver.

....my one is many years old?

How old? Age in itself is no reason to sell. The mean age of my two cars is 29 (42 and 16). Years, not months. Both are in perfect working order.

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Tue 12 Apr 2022 21:34
Car prices are like house prices now! - FoxyJukebox
Brilliant answer…solution?
Keep keep keep..!
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Wed 13 Apr 2022 10:59
Car prices are like house prices now! - Terry W

Always dangerous to make these sort of comparisons. In 1980 the mortgage rate was around 15%, today the rate is 3-4%.

One could equally make the point that rather than bemoaning higher house prices, cars have become relatively much cheaper.

The price of property is in large part determined by affordability - monthly payments. The 1980 affordability ratio (income vs mortgage) is fairly similar to current rates - as mortgage costs fall the price of property increases.

It is questionable whether comparing 2022 with 1980 is sensible anyway - so much has changed - eg: privatisation, internet, containerisation, growth of China manufacturing base, foreign travel etc etc

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Wed 13 Apr 2022 12:46
Car prices are like house prices now! - John F

Always dangerous to make these sort of comparisons. In 1980 the mortgage rate was around 15%, today the rate is 3-4%.

Similar reduction for a loan to buy a car. And back then, just as today, some could afford to buy houses and cars without borrowing much. But a big difference is, back then, loan repayments for one's house could be set against tax, so you might think a house would have been a greater multiple of the cost of a Ford than it is today.

The reason why houses are now so costly is that thanks to inflation (money-printing) there is now so much money around that far more people can afford to buy all or most of a house for cash. A record amount of UK property is now loan-free, and many of the loans for the others could probably be paid off if the owners wished to do so (although not those who indulge in Rachmanism which has sadly become an unproductive widespread career option requiring only the numerical ability of a reasonably intelligent 12yr old Monopoly player - facilitated by HMG's money-printing disbursed by the banks). And there is no greater shortage of houses - average household size is now less than it was in 1980.

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Wed 13 Apr 2022 15:21
Car prices are like house prices now! - Terry W

You are right to mention tax. But there are so many changes that it is easy to find data which supports whatever conclusion you want:

  • owner occupiers have grown from 57% to 65% since 1980.
  • social housing has fallen from 31% to 17%. How much of this is due to the sale of council houses, and housing trusts is not clear
  • private rented has taken up the slack increasing from 12% to 18%.
  • many European countries have a much bigger rented sector. Renting is not bad - although the legislation to outlaw bad practise may need improvement.
  • it is easier to borrow money today - in 1980 Building Societies controlled most of the mortgage market with very strict criteria. Generally a good change IMHO
  • the problem for FTBs has shifted from monthly affordability accumulating a deposit
  • reasons for growth of BTL - property value increases, higher level of return than banks, more secure than pension fund, inheritance.
  • changing household composition - smaller units due to divorce etc. Requirement has changed. Not clear that new build has kept pace limiting supply.
  • population growth (~9m) increasing demand. UK has amongst the lowest level in Europe of empty properties. More house building = greater supply = lower prices

Most folk enjoy a much higher standard of living compared to 1980. Food, cars, holidays, clothing, central heating, health, consumer durables etc etc. That some elements of consumption have increased at a faster rate (eg: housing) is unsurprising.

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Thu 14 Apr 2022 09:06
Car prices are like house prices now! - John F

You are right to mention tax. But there are so many changes that it is easy to find data which supports whatever conclusion you want:

My observation, or 'conclusion' was that, in general, car prices are nowadays a smaller fraction of house prices than they used to be. However, there may well be some back streets in formerly prosperous but now run down areas of northern towns where data contradicts that.

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Thu 14 Apr 2022 09:24
Car prices are like house prices now! - Andrew-T

<< The reason why houses are now so costly is thanks to inflation (money-printing) >>

That's not the only reason. Demand exceeds supply in many areas, which can have a similar effect.

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