>> From what I've seen the market is dead but the dealers and sales guys arein denial
Although they're only down a couple of % YTD, VW were down 25% last month, so it won't be too long before something happens. I don't think there are model changes etc that could explain that drop.
Mitsubishi have slashed prices, and that's being blamed on a 40% drop in their sales last month. Mitsubishi's drop is more understandable as they mainly do larger SUVs and 4x4s.
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MJS100 - I was also in a VW dealer this week and I was shocked by the price of their secondhand cars. Many of them were MORE expensive than I can get them new from the likes of Carfile or DrivetheDeal. This was even though they had a 'sale' on with 1K off all the secondhand cars.
I was the only one in the dealers though and they looked really pleased to see me when I went in.
Problem is, like you, how can I fork out 15K plus for a new Golf when the likes of Motorpoint are selling low mileage secondhand and pre-reg Focuses for anywhere from 8K to 12K dependent upon engine and spec you buy? I can't. Shame I cab't fit in the Focus but, heck, I can't fit in the Golf either but you get my point.
I am hanging off buying another car partly because I am unable to find a car that fits someone as tall as myself which is not a big engine, high fuel, high VED car. But the main reason is that, as you say, like house prices the car dealers seem to think they can charge what they want when we are in a huge credit crunch and on our way into a big recession. I think by October we will be seeing loads of car dealers going bust just as we are now begining to see loads of estate agents go bust.
Edit:
Oh, as for that VW guy offering you £50 off - he was taking the proverbial and I would have told him so.
Edited by tawse on 25/08/2008 at 01:44
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I was speaking with a relative who is a Renault salesman a few days ago. He said new sales are dead, but he's been very busy as people buy small used cars in the £4-6000 region.
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Seems the small car is in, especially now today the new Dpeuty BOE Governor has declared this credit crisis is as bad as the 1970s.
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In respect of VW dealers you can understand their arrogance when they are able to advertise and sell the following without any apparent difficulty. All are genuine (anonymous) examples that I have seen in regional press within the last 2 weeks:
1) Mark IV GT Tdi 150, 03/53 with 30K miles: £10,995
2) Mark V GTi, 04/54 with 35K miles: £14,250
3) Mark IV GTi 180 turbo, 03/53 with 30K miles, £9,495
4) Mark IV 1.6 Match, 03/03 with 30K: £6,995
5) Mark III colour concept convertible, 02/02 with 45K miles: £8,995
None of these were on forecourts for more than 3 weeks apiece. Searching Autotrader seems to bring up much cheaper equivalent examples but also some that are equally as costly, often from private sellers as well as dealers. Both seem to be in fanatical denial about dropping values (MINI owners also take note) but if mugs keep paying top dollar then who can blame them.
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I think car sales people are strange folk. Whether it's arrogance or laziness, I don't know. (I have posted similar thoughts on here before.)
I am thinking of trading in my MB E class for a new one, or possibly a recent second-hand example.
So - I took myself to MB at Brooklands last Wednesday morning (the 20th), the salesman was late for our meeting. He took all the details including my mobile number and email address, looked at my old car and said that he would be in touch. Since then, guess what? That's right - nothing, not a phone call or text or email to say that things were on the way.
On Wednesday afternoon, I visited the two MB Direct sites on the A3 at New Malden, the afternoon was inconclusive because the salesmen seemed unable (unwilling?) to respond to any offer I made them. They too have not been in contact since Wednesday.
Of course, it may be me!
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This is typical sales tactics - to see how desperate you are to buy. They don't call back so you eventually call them and then they know that they have you over a barrel.
In the housing boom I saw EAs use this tactic to have one lady in tears literally begging the EA to allow her to buy a particular house. The phone then conveniently rang and the EA said it was someone else bidding 20K more than the woman's offer.
Houses, cars, whatever - you have to be prepared to walk away to get a good deal.
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This is typical sales tactics - to see how desperate you are to buy. They don't call back so you eventually call them and then they know that they have you over a barrel.
Yeah, but in a recession? There's also a school of selling that says never allow a (potential)
customer out of the door. Rather than cute psychology on the salespersons' part I'm rather inclined to believe it's poor (or absent) technique. Someone selling MINIs in 2002 may have been able to play the hard-to-get & shy coquette, but in late 2008 a seller should be using handcuffs & anaesthetising darts on any good prospect.
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They probably do not think/realise we are in a recession and/or they believe all the guff that it will soon be over. Estate Agents appear to be in such denial.
Years of arrogance and riding a credit bubble probably makes them think that the good times will soon return. None of them can seem to grasp that the banks are technically bankrupt and we are on the verge of an economic cliff.
I think the next 6 weeks will be interesting as we might see loads of pre-reg cars up for sale on garage forecourts and sudden price drops when car dealers/makers realise that the market has fundamentally changed.
I have cash in my pocket ready to buy but I am hesitating. I look at the higher fuel charges, I look at the higher VED coming in the next two years and I think to myself that this is just going to keep on going up. At the same time I am trying to rationalise buying a smaller, more economical car with issues such as my height, safety and long-distance driving.
I have tried the bus for 2 months and it ain't good - everything takes longer. Saturday morning at Sainsburys now takes all day. You spend most of your life queuing for buses and whilst they are pleasant enough if you have 'nice' people on the bus with you if you have drunks, people who smell of smoke, ipod 'blasters' or screaming kids next to you then bus travel is not fun. Oh, and the obligatory British person who has years of anger built up within him or her and it is just bursting to get out.
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Largely agree with you tawse. The banks and financial sector have landed us all in the mire and it'll be some years before this mess is cleared up (at the taxpayers expense, no doubt). Its not so much the current situation that worries, as what might be to come (higher inflation, possible redundancy etc etc). In previous recessions we've had some 'diversity' in the economy, but years of downsizing of manufacturing base and growth of what Mrs Thatcher called the 'post industrial economy' (burger joints, restaurants and selling each other houses) have left things rather fragile - its all a house of cards. I guess most people are thinking that now is not the time for making large purchases. I've read that lots of estate agents are closing offices - car dealerships to follow perhaps? I also reckon that when the new higher VED reminders start dropping on doormats there will be a burst of selling of big/heavy machinery - good job the price of scrap metal is rising LOL!
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I have tried the bus for 2 months and it ain't good - everything takes longer. Saturday morning at Sainsburys now takes all day. You spend most of your life queuing for buses and whilst they are pleasant enough if you have 'nice' people on the bus with you if you have drunks people who smell of smoke ipod 'blasters' or screaming kids next to you then bus travel is not fun.
I wouldn't use the bus for the family weekly shop, but about a year ago I started using it to commute to work. I'm lucky in that I have a stop near home and one near work, so it couldn't be better really. Fellow passengers are usually commuters - not seen a drunk yet! I pay £12 for a weekly ticket - that's about 150 road miles of travel - difficult to beat that (although its been that price for over a year, so might be going up soon!).
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Yeah but in a recession? There's also a school of selling that says never allow a (potential) customer out of the door.
I think it's possible because traditional British reticence is seen as the customer not being keen.
I had our local SEAT dealer call out the blue trying to get rid of the last of the current model Ibiza's as daughter's is 4 yrs old. She was on away on holiday so I chatted to the guy and I said I'd helped her buy it and I was thinking it could do with changing (true) and wouldn't it be nice for her to come home and have a new car.
I then couldn't get rid of the guy over the next couple of days but it turned out he was "wrong" about the insurance group (it was 2 higher than he said) and the car didn't have side airbags, which I'd paid extra for on daughter's car. They were offering a pretty good deal, although I'm not sure I'd have plumped for the current version with the new one being more or less here now.
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Like you, BP, I help my daughter with car purchase. She's now on her third 1.3 Yaris and these are well worth a look. They seem expensive but Toyota dealers are keen to do deals - particularly now, as per this thread.
The new Yaris is costing her £20 a month less than the old one, even though this was PX'd at 2 years old and 55,000 miles. Impressively, nothing went wrong with it (or with the first one) and it still ran like new even after a hard life.
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I think both EA's and car salesmen have forgotten how to sell in a recession. Certainly estate agents have been so used to a rising market that I think they still don't think they have to do anything to get the punters in. Our EA rings us up and asks about dropping the price, without any suggestion about what they could do (more pics, better copy etc.)
Who's fault is it? Banks for giving easy credit, but mostly the governents for allowing 10 years of massive house inflation. If people didn't have giant mortgages they would be able to absorb food and petrol rises more easily.
We say bye to our Saab 9-5 when our Hyundai i10 arrives in two weeks. I think many people will be making the same sort of move in the coming year.
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Not as dead as it will be in 12 to 18 months, the usual length of time it takes for a recession to bite. And then there will be four years of hardship after that.
Old people like me have seen and lived through it all before and saved during the good years. There will be many up to about age 35 who have never experienced a recession and may well be in for a nasty surprise.
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We're off to Cumbria next month -Mrs P going to tease some Estate Agents whilst we're there. I think that's why she told me to sell the 535 :-(
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You are far better placed than most to check this PU but I believe there is an unrepealed bit of law somewhere which still allows chastisement of a spouse with a stick no wider than your own thumb knuckle in the case of extreme insubordination. If true, I would never of course recommend its practise but you might consider the aquisition and prominent display of a suitable bough. Perhaps on a bracket above the fireplace.
;-)
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The modern alternative is a BMW brochure left strategically in the shared bathroom.
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There will be many up to about age 35 who have never experienced a recession and may well be in for a nasty surprise.
>>
I couldent agree more Snowman, I saw a 15% bank rate when I had a mortgage and car loan. I think there will be many distress sales of cars to come over the next few years, and bargains for some.
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Our EA rings us up and asks about dropping the price without any suggestion about what >> they could do (more pics better copy etc.)
Perhaps it wouldn't make any difference at the moment, but it amazes me that estate agents don't generally give advice on how to present a house for sale. So you get these TV programmes where they spend perhaps a grand and the house used to sell almost instantly.
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As you say MeltingSnowman - but I would say perhaps even older, 45-ish, given that many people don't really 'engage' with the mature economy until they're late 20s - that's a whole generation learning afresh that money doesn't grow on trees, that every pound spent must be earned at some point & that every pound spent via credit costs two pounds.
There's some nonsense in the media that things won't get better for another year or so - I say nonsense because the unravelling of the 30-40% HPI over & above the 'normal' range will take at least 5 years. Add on the oil price shock & the destruction of value from the credit crunch it & looks like a recipe for a step-change in our economic outlook & propects - I believe general living standards have peaked in fact, just as has the notional indicator of economic well-being, peak oil.
Edited by woodbines on 26/08/2008 at 00:36
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Who's fault is it? Banks for giving easy credit but mostly the governents for allowing 10 years of massive house inflation.
So you would propose the government regulate lending and house prices then? It would be interesting to see the level of vilification of any government that went through with those kinds of ideas!. House price bubbles are practically a British pastime, made all the worse this time around by the fevered scramble for 'Buy To Let' investment properties (which kept the bubble inflated long after things would normally have cooled) and banks who were desperate to sell more and more debt without anyone bothering to look at the risks. All those carpetbaggers who got building societies to convert to banks don't look so clever now either.
Its all unwinding now and I suspect many sectors of the economy are in for a very rough time, I wouldn't want to be a car dealer right now.
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Whose fault is it?
Who regulates the banks?
Who controls the printing of money.
Who can use the laws they have or pass new ones?
Answers to 10 Downing Street, London.
I agree with Snowman: end 2009 will probably be painful.
Meanwhile the C6 slowly gets cheaper...
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I'm looking at the positives. It's making me keep my car and not make an impetuous change at the usual 18 months. (Combined with the fact it still 'feels' like a new car)
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How can the government criticise the people for taking out loans and frittering away the money, when its doing the same thing at an international level? We couldn't balance the books when lots of people were in work, so there's no buffer now times are getting harder.
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How can the government criticise the people for taking out loans and frittering away the money when its doing the same thing at an international level?
I don't think the government is criticising people for taking out loans, is it? Rather than 'nannying' people it has allowed them to get on with their lives and make their own financial decisions. Unfortunately a lot of people have been a little too avaricious or made flawed assumptions (e.g. that house prices only ever go one way - up) and so when they come unstuck they look around for someone to blame - and who else but the government.
UK government debt is pretty modest by international standards (despite all the alarmist headlines). As a percentage of GDP its below that of France, Germany, US, Canada, even Switzerland, and way lower than Japan's (which is almost 200% of GDP!).
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As a percentage of GDP its below that of France, Germany, US, Canada, even Switzerland, ...
Interesting claim. Can you provide the source, please.
The last figures I can find for various measures of debt are:
www.cia.gov/library/publications/the-world-factboo...l
en.wikipedia.org/wiki/List_of_countries_by_externa...t
www.order-order.com/2008/04/uk-mortgage-debt-gdp-r...l
Edited by jbif on 26/08/2008 at 11:17
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Interesting claim. Can you provide the source please.
en.wikipedia.org/wiki/List_of_countries_by_public_...t
Internal + external debt as a % of GDP.
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Whose fault is it? Who regulates the banks? Who controls the printing of money. Who can use the laws they have or pass new ones? Answers to 10 Downing Street London.
Its not as simple as that. It would be politically impossible for the UK government to regulate house prices or to impose lending controls of the sort that we had in the 1960's. Times have changed.
The FSA regulates the banking sector and is an independent body funded by the companies it regulates.
The current problems are most definitely not the 'fault' of government, they are the result of systematic flaws in the banking sector which need to be addressed on an international basis.
Certainly the UK government could introduce more regulation, but it would not be easy and there would be tremendous hostility and a lack of cooperation from the banking sector.
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A great many people got into BTL when they realised that Brown had screwed their pensions and that their pensions would not be enough to retire on. Also, people got fed up of paying their pensions to Bankers who took an upfront commission whether the price of your pension shares went up or down.
Alas, greed then dived into the market, it got out of control, people began MEWing for bigger and bigger cars, more expensive holidays and so forth.
I think we are on the verge of the biggest housing crash in history. I think UK house prices will fall by at least 50% and no area of the UK will avoid the drops.
I live in South Wales and it is shocking how many 30K plus cars you see on the roads despite Wales having one of the lowest average wages in the entire EU. House prices have gone up several hundred percent and for those who bought 8 or 9 years ago the housing bubble has become an ATM for them. Now, the bad times are about to it - house prices will tumble, holiday firms will go bust and car dealers are going to suffer big-time.
Like houses, car dealers who heavily discount now will sell more in the coming months than those who wait. Same with houses. Things are just going to get worse and worse in the coming months and years.
I think this recession will kill of many dealers and it might see a fundamental change from dealerships to car supermarkets.
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"The current problems are most definitely not the 'fault' of government, they are the result of systematic flaws in the banking sector which need to be addressed on an international basis."
And who regulates the banks?
Who regulated Northern Rock so well they let it break capital requirements and approved a dividend payment just months before it ran out of money?
I do not claim the banks are blameless: far from it. But history says (and says it every 20 odd years) that loosely regulated banks a end up in a credit bubbble.
Blame Greenspan.
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As you say MeltingSnowman - but I would say perhaps even older 45-ish given that many people don't really 'engage' with the mature economy until they're late 20s
It depends. If your parents were unemployed in the early 1980s, or you lived on a sink estate in Toxteth, or in a town like Hull or Barnsley, then I'd say you were 'engaged' with the mature economy back then and knew money didn't grow on trees even if you were a child. It was probably the only thing you knew for sure in fact.
And then of course the last housing crunch came in the early 1990s, just about the time when many middle-class people who are now 40 were getting into buying property (often using dodgy endowment policies to finance the deal). I'm well under 45 but I know very well what a recession looks like and I have the scars to prove it.
As for quality of life, that peaked long ago, around the time when it became necessary to have two decent salaries to buy a family house in a good neighbourhood. There are more shiny toys now, but it's a mistake to equate that with quality of life. I look at my parents, whose house was all paid for by 1990, who only ever had one teacher's salary, and who 'retired' at 55 to begin a comfortable life of swanning around, and think we will never see an opportunity like the one their generation had ever again.
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I look at my parents whose house was all paid for by 1990 who only ever had one teacher's salary and who 'retired' at 55 to begin a comfortable life of swanning around and think we will never see an opportunity like the one their generation had ever again.
Anyone with a decent job in the public sector (and that's a lot of people, including all Police and fire officers, teachers, nurses etc) will retire on index linked 2/3 salary pensions.
The people with more senior jobs are sitting on absolute goldmines - my SIL just took early retirement at 51 after 30yrs in local government and her pension is only slighty less than my pretty decent salary.
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That is a huge change in size of car from the Saab to the i10 - have you considered things that you are able to do in the Saab but will not be able to do in the i10 - carrying large items - and what the pros and cons of it are.
Like you, I am considering a smaller car but height is an issue for me re car size plus I surf, so I need something that can carry a surfboard, and am thinking seriously about whether I even need to give up doing some of the things I enjoy just to be able to downsize to a more economical car. In reality, I do not think that is practical, especially as it would remove a joy of living for me... but in these days of much higher car running costs I think more and more people are thinking such things.
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Did anyone of you try to get a job in the current market? If you did, probably you've seen that almost no one is hiring now!
The economy has come full circle. Most people are spending bare minimum. So, not just car market, overall any market is dead.
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Did anyone of you try to get a job in the current market? If you did probably you've seen that almost no one is hiring now!
I think it depends on the sector. Certainly, from what I hear and read, construction and retail are pretty dead. However some other sectors are doing OK. I teach electronic engineering in a university and, as every year, have taken quite a lot of calls from companies and agencies asking if we have any good graduates who haven't yet got jobs - there's still lots of vacancies out there.
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Isn't this because of the dearth of people studying engineering now? I thought most students were studying Meedja or PC Games Studies these days?
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Isn't this because of the dearth of people studying engineering now? I thought most students were studying Meedja or PC Games Studies these days?
Only in Daily-Mail-Land. The proportion of students studying Media Studies and Games etc. is actually rather small. Business, Marketing etc tend to be very popular along with the usual (English, History etc etc). Engineering is not very popular, probably something to do with the relatively low salaries and demanding nature of the courses.
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>>BMW are up 12%
I was talking to a Business to Business sales manager from a local BMW dealership at a BBQ yesterday, and he was telling me much the same. Apparently, the CO2 based company car tax and companies focusing increasingly on CO2 emissions are causing the x18d / x20d models to literally fly out the door. Low lease costs and low company car tax - quite a powerful combination.
Oh, and the 118d is Congestion Charge exempt from October thanks to 119g/km CO2 emissions, so expect to see quite a lot of those in and around London.
Fair play to BMW. They've anticipated the market and they're reaping the rewards.
Cheers
DP
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I was reading an article in the Irish Times a few weeks ago stating that BMW were cutting back on volumes sold in Eire in order to keep up prices in a slowing car market.
I think they announced a 44% fall in profits a few weeks ago also?
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Fair play to BMW. They've anticipated the market and they're reaping the rewards.
And should anyone have cause to visit Bruntingthorpe, they will find hundreds of the things 08 reg mostly 1 series parked there waiting for what.....buyers?
And thats only one parking lot.
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And should anyone have cause to visit Bruntingthorpe they will find hundreds of the things 08 reg mostly 1 series parked there
Pre-registered - really?
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Pre-registered - really?
Couldn't say what the reasons are, could be ex company cars or ex lease cars for employees, but they come in by the truckload, several every day.
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Pendragon (owners of Evans Halshaw etc) are to post much reduced profits today. Their share price is a shadow of what it was and the company is now worth much less than the money they paid for the likes of Reg vardy not that long ago.
the car market might not be dead but the slaes / profit pulse seems very weak!
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The days of people MEWing from their houses are gone and will not return. The banks are going to correct the housing market by returning to 3 times salary mortgages. They have to in order to prevent themselves publicly going bankrupt - they are technically bankrupt already - so house prices will collapse in the next few years and so will the price of cars. We are now in a deflationary cycle no different to Japan from 1990 to, um, the present day. I know that is hard for people to understand with rising fuel costs, rising taxes and so on but it is a deflationary environment nonetheless.
The clever dealers will begin discounting heavily now. Even offering 0% finance on a car is no longer of value as new cars will now depreciate further and faster than in previous years.
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so house prices will collapse in the next few years and so will the price of cars.
Audi are increasing their prices! See News item on the right:
Currency Price Rises Starting to Feed Through
www.honestjohn.co.uk/news/item.htm?id=5120
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>>The days of people MEWing from their houses are gone and will not return.
Are you saying that houses will have to have cats, as well as cars?
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And should anyone have cause to visit Bruntingthorpe they will find hundreds of the >>things, 08 reg mostly 1 series parked there waiting for what.....buyers? And thats only one parking lot.
That airfield is the fullest I've ever seen it in the time I've been going there. The Cold War Jets Collection open day has had to be cancelled due to lack of space to access the runway.
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hundreds of the things 08 reg mostly 1 series
I wonder how many of them are 118d and 120d models?
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I wonder how many of them are 118d and 120d models?
I'll be there either this week or next, i'll make a point of having a nose, seem to be quite a few saloons/cabrio things.
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Just wondering if this guy was spinning me a yarn.... ;-)
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Without giving too much away, a very desirable looking upmarket performance 4x4 has been on sale for some time at the local garage, at what appears to be a very reasonable, not to say 'bargain' price. Possibly the fact it has a petrol engine might be a factor here.
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>>Oh and the 118d is Congestion Charge exempt from October thanks to 119g/km CO2 emissionsso expect to see quite a lot of those in and around London.
Not any more.
Boris has closed the 120g-or-less-for-free loophole along with the £25 charge for 'gas-guzzlers'.
Which makes the hybrid exemption even more of an mystery.
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Boris has closed the 120g-or-less-for-free loophole
Which only goes to show that all the research and arithmetic we do before making decisions counts for nothing when a politician sticks his oar in.
How the devil can you possibly decide which way to jump in this country, unless you've got Mystic Megs moble number....
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>>Both seem to be in fanatical denial about dropping values
Values clearly are NOT dropping, you say so yourself. "Denial" is a pretty strong word, as is "fanatical". They're just selling cars, you know!
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They're just selling cars you know!
Or not, as the case may be.
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Values clearly are NOT dropping you say so yourself. "Denial" is a pretty strong word as is "fanatical". They're just selling cars you know!
Just sat about twiddling their thumbs and reading Dear Deirdre's photo casebook in The Sun I would have though?
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Yes, them and estate agents too (I know!)
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Spoke to an Estate Agent last night who told me she knows of one couple who bought a £300k house on a new development. Unfortunately no one else has and they are now being offered for £250k !
Ouch!
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Which means that with some haggling you'll get them for £210k and with carpets, curtains and plenty of other stuff thrown in too. A decent negotiator would probably manage even more off that/
I'm sure that at least one big lease company, car sales company and house builder will go bust in the next 12 months.
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Continuing to veer off thread, I read in the weekend papers that since Foxtons (London Estate Agents) was sold last June for £390m, the interest repayments are £26m/year. That's before all the other overheads. How long can that go on for?
Motoring link. The agents all drive around (some pretty badly) in gaudily painted MINIS, and there is a warehouse in Park Royal whose car park is full of their MINIS (presumably surplus to requirements in the current housing market).
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Not long Boxster is my guess.
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People must remember the car joke from the last fall-out in the financial sector:
What's the difference between a banker and a pigeon?
A pigeon can still put down a deposit on a Porsche.
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