I went to BCA the other week with £6k in my pocket for a small family diesel. I thought prices too high for the risk factor of a one-off buy. There were loads to choose from but a huge amount with too many scuffs or larger panel damage for their age. The buyers premium plus document fee added about £300 to each car (if I remember right).
To give an example one that was of interest was knocked down at £5100. Add the premium etc and you were at £5400. It was due a mid price service and MOT so add £250 at a main dealers to get their stamp so £5650.
A near identical car was available just a mile away at the main dealers for £5990 with servicing up to date, full history checks, valet, new MOT and a years quibble free dealers used warranty.
Well worth the extra £340 for the warranty alone never mind the fact it could be test driven, looked over etc... and that's before haggling with the dealer.
I was also struck by the many things that could be wrong with any of the cars that could be a pig to sort out. Recenty on here we've had posts where a car has had to go back as there was no PAS and another with mistakes on both V5 and MOT serial numbers that stopped that car being taxed straight away.
I think I'd want to be saving £1000 on £6000 to make it worth the hassle. This is even more true as the complexity of cars increases and we stray into the realm of intermittent engine lights and limp home modes.
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yoU tell em MM
My old school chums and me still think trade auction should be trade only but we are always willing to let a private individual outbid us as it brightens a boring day up
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To be honest bellboy on the day I went, with the exception a perhaps a dozen cars out of hundreds, I couldn't see how the traders were going to make a profit out of the stuff going through.
Funnily enough I did spot one of the cars in Autotrader a week later with a very small dealer working from home. He was offering it straight as was in the auction with an added rubbish insurance type warranty. His price was exactly the same as the main dealers would have wanted because he'd paid too much.
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its been the same all this year
another year like this and im finished
most places ive known for years are now empty moss ridden dust holes
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You wouldn't know bellboy but I've been associated with the servicing side of the trade for 15yrs up to 2007 and had contacts in sales and service going back far longer than that.
25yrs ago when in a job with good company mileage payments we could go down the auctions, buy a 3-5yr old car, stick 10k on it over 6mths and sell privately for a profit after. The savings at auction were that great.
Until I went to BCA the other week I'd not really looked at auctions for years as I usually sourced our cars from the trade when something came up. I was genuinely taken aback at the high prices giving such narrow margins.
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I can't see the logic to buying a secondhand car at the moment. I'm a private buyer and I've been looking for the past 3 months and found nothing at sensible money. Went to BCA Blackbushe and virtually every car sold for 100% clean values or more (some much more - a 54 plate E320 CDI estate with high miles went for 40% more than top book). I also went to an SMA auction at Kinross to see if things were different up north. Different buyers (mostly franchised traders at one end of the spectrum and first time/clunker buyers at the other) but still buying at prices that would need traders to be able to re-sell clean 3 year old/30-40k cars for 65-70% of their original prices.
My conclusions:
a) The guides are pretty useless at the moment at giving a true indication of what you need to pay. The range of market prices suggested in some of them make them equally useless.
b) Potential for savings buying secondhand compared buying new (particularly from brokers like drivethedeal or motorlogix) are just too low.
c) That said, many motor manufacturers are clearly milking the current market. I see VW are putting their prices up 2.5% again to coincide with the VAT increase in January after a 4% hike just in September. No doubt exchange rates will be cited, but the £/? exchange rate is currently exactly the same now as it was in February 2009, with monthly fluctuations in between of no more than 1.5%.
With hindsight, secondhand prices dropped too far in 2008/early 2009 but have now jumped too far the other way, bringing with it expectations by all and sundry that they are going to make a profit when they come to re-sell. I see HJ's predicting a further rise in transaction prices next year, with a seasonal £500 hike in average used prices coming in January. I just don't see this as being sustainable because buyer's budgets won't get bigger to match and, if they are anything like me, they won't be willing to buy a 5 year old motor with miles to match instead of the 3 year old, one owner car they were expecting to be able to afford.
As for the OP's original question, most auction houses will give you CAP prices for any cars you're interested in on the day if you ask. I don't know about BCA, but that's certainly the case at WOMA (West Oxfordshire Motor Auctions) and SMA actually print current CAP prices against each lot in their catalogues.
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People need cars - period. If somebody has £5000 to spend and wants a 3 year old car with 60k but when they go looking they can only get a 5 year old one with 100k they'll either buy it or spend £7000. They still need to get to work, take the kids to school etc. It is basic supply/demand econmics.
Personally, as a small trader, I'd much prefer things the way they've been this year than last. Yes, prices are high, but so is demand and people are paying the higher prices. If you see a car priced at retail the same as at auction then buy it very, very fast as when the dealer replaces it they won't be able to buy in at the same price and will have to mark it up accordingly.
Retail prices are always linked to auction prices but there is a time lag. In a falling market some old retail stock can look very expensive compared to that month's trade prices, equally in a rising market you do get some underpriced stock bought in a couple of months previously.
I just bunged what must be the tattiest px I have ever taken on ebay. Not a straight panel on it, covered in scratches, no history, oil like sludge. Must have had 15 phone calls from people all offering me well over CAP clean on a straight nothing done to it basis. I was truly amazed.
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pd, I can see where you're coming from but I can't see where the extra money will be coming from next year to bump buying budgets up (and therefore demand) to any extent. People have been putting car purchases on their mortgages again this year or spending the £200/month they've supposedly saved on their mortgages from low interest rates or taking advantage of the scrappage scheme to make once in a blue moon buys. Next year we have an election, higher taxes and probably higher interest rates too to combat inflation and the devaluation of sterling as a result of sky high sovereign debt that will no longer be supported to the same extent by BoE QE. I can also promise you that we won't have any greater job security or higher consumer confidence next year. 750,000 jobs have been lost in the UK over the past 16 months. There are another 120,000+ in the pipeline to be axed over the next few months that I know about from my line of work.
Basic supply/demand economics applies as you say, but the comparison won't just be between buying a 3 yr old or 5 yr old, or spending 5k or 7k at this rate - it will be between opting for new rather than used (compromising perhaps on which new car to buy for budgetary reasons), or alternatively holding on to what you already drive.
Or you can view things a a completely different way. Why would I buy for example a three year old Volvo XC90 for £19k-plus off Autotrader, eBay or a forecourt when I can buy a brand new one at the moment with a near 30% discount for £21k? With of course 3 years no hassle manufacturer's warranty. The same new-or-used dilemma increasingly applies to most other popular and premier marques, albeit generally with lower discounts available depending on the circumstances or strategy of the manufacturer.
Either way, current high prices in the secondhand car market do not look sustainable.
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You also have to take into account that most manufacturers have broken the over production cycle so there are no longer loads of short lease ex-demo cars hitting the system.
UK used prices are still amongst the lowest in the world - Continental Europe, the USA, prettty much everywhere else you'll still pay thousands for 10 year old cars. All the same arguments about new vs used apply in those markets.
Equally, a significant number of used cars are being exported out of the UK system due to the low pound. The low pound is also pushing up new prices providing a squeeze from both ends.
The really big price rises have been at the lower end - what was £3k is now £5k. In some ways this is probably due to job insecurity and lack of money. People who would have spent £20k are now spending £5k. I've found demand in the £10k+ sector very weak this year but people fighting over £3-5k cars. The other elephant in the room long term is the lower new sales will also mean a decreasing pool of 3-5 year old cars from 2012 onwards.
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And dont forget nearly the whole section of 10 year old sub £2k cars for sale has been removed under scrapage.
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Yaris was bought 3 years ago for £6500. Retail now same spec car is £5,000 with some at £5,500.
I am not selling.
Lots of BIG petrol cars - 3 litre Merc/Lexus dirt cheap at 9 years or older.. little demand I suppose. Some really nice ones...
Edited by madf on 15/12/2009 at 16:36
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Actually, there is a lot of demand for larger engined cars as long as they are reasonably cheap, the right spec and in good condition. People want them as low mileage weekend cars etc.
I had a 3 litre 166 a few months back which I could have sold to 5 people within 2 hours of advertising it. If one of those is in demand then everything is. :)
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Good argument pd, but the over-production cycle has only been broken temporarily in my opinion - look at recent announcements from the likes of Fiat, Toyota and Ford. The scrappage scheme, (potential) demise of some competitors, political interference to protect national car industries/jobs and need for hybrid engines are all now being used as justification for either temporary or more permanent production increases again in Europe.
I appreciate you have the inside knowledge of a trader, but do you really think cars that private buyers can remember sold for £3k as recently as in January of this year will fetch as much as £7k by next January?
Here's a brief summary of my recent buying experiences, what equivalents are for sale for now (according to Autotrader prices) and why I probably won't therefore be buying secondhand for the foreseeable future:
1) March 2008: Audi A6 2.0 TDi SE Avant, 07/57 9k miles bought from Audi dealer for £19,800. Sold August 2008 with 15k miles for £17,900. Current cheapest equivalent on Autotrader: £20,995. Discounted new: £24,995
2) July 2008: Fiat 500 1.3 Multijet Lounge. 08/08 4k miles bought privately for £9,585. Sold September 2008 with 6k miles for ££9,250. Current cheapest equivalent: £10,995
3) August 2008: Honda CR-V 2.2 i-CDTI EX, 07/07 33k miles bought from non-franchised garage for £14,700 + cost of 4 tyres. Sold March 2009 with 39k miles for £14,200. Current cheapest equivalent £17,990. Discounted new (new model): £23,675
4) January 2009: Volvo XC90 2.9 T6 SE Geartronic: 04/04 49k miles with one owner bought via broker for £8,000. Sold March 2009 with 51k miles for £10,600. Current cheapest equivalent: £13,500. Discounted new (diesel/manual): £21,400
5) April 2009: Land Rover Discovery 3 2.7TDV6 GS, 08/08 28k miles...well that's a completely different but still good reason for not buying secondhand!...www.honestjohn.co.uk/forum/post/index.htm?f=2&t=7
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UK used prices are still amongst the lowest in the world - Continental Europe the USA prettty much everywhere else you'll still pay thousands for 10 year old cars. All the same arguments about new vs used apply in those markets.
I don't get that either. A German colleague was astonished at how low used prices were in the UK, and ex-pats in France & Spain come back here to buy cars and put up with them being RHD, such is the saving.
I can only think it's registration letter snobbery here. Do away with that and new car sales would probably collapse totally.
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We sold a house recently owned by some Germans. They flew over here, bought a van and drove it back. They couldn't believe how cheap the vans were, so the saving was worth the sacrifice of having the steering wheel on the wrong side!
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Its been a roller coaster 2 years for us.
I think drop in production is only temporary and oversupply we be back before long, low pound or not. UK has traditioanlly been a very profitable market. Yes, some used cars are being shipped out, but they represent a tiny fraction of UK vehcile population and are usually big cars and 4x4 which have been falling in popularity for last few years.
Scrappage has pulled a lot of small older cars out of the market, which is what the big boys in the trade wanted, so they got their way.
Prices and demand will drop back with economic squeeze, peiple will downsize and get ride of the second or third car.
Some idiot from CBI was on telly at the weekend pleased about public sector pay squeeze, Problem is that in many parts of the country its public sector workers spending money that keeps the local private sector economy ticking over. A lot of our customers are teachers, nurses and so forth and they tend to run older cars and come to us for service and repairs and to buy a replacement 3-5 year old car so squeezing them will hurt us.
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The Legacy I bought myself just after Christmas - for Glass's mid-range trade-in price - according to Glass's is worth £30 less than it was 12 months ago. Clearly Bangernomics wasn't the right way forward!
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The trade price of my landcruiser has dropped only £2000 or so in the last 21 months.
I think that when the scrappage scheme stops we'll see the car prices for what they are - about 30% up over the last two years. I fear that similar inflation will hit most imported goods.
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My layman's POV. I've always thought those 'guide prices' from anything other than real auction price data to be rather finger-in-the-air.
As soon as a new model comes out, you read confident predictions of what it will be worth in 1,2,3 years etc. Fine, but past performance doesn't take account of future (unpredictable) events - like the credit crunch, currency depreciation/appreciation & scrappage etc.
All these must have an effect that weren't in the calculations of the pre hoc guides, so they're essentially bus timetables.
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