No deal brexit! Houses down 35%,cars up or down??

[friar 8]

Mark Carney has frightened UK today, with his predictions of doom!

Commercial property down 48%,interest rates 6%,and the rest.

Will cars go up or down do you think, sales are all ready well down.

My thinking is a shortage of stock will keep things pretty stable, car wise.

What's your thoughts?

Edited November 29, 2018 by friar

[EPV 631]

My thoughts are that he’s guessing, like everyone else. 

[trade vet 697]

Worst case scenario etc. Carney knows what he is doing,his contract has just been extended,maybe he wants to be fired.He is a Goldman Sachs guy,some people might say that any Wall St guys ( he will know a lot)could make money shorting stock having prior knowledge of these statements.

[Nick M.K. 574]

While I am a Remainer (ReMoaner, even ReScreamer) doom actually brings tremendous opportunities.

Do you remember 2008-2009?

Poor sales of used cars for a few months but because new and nearly new car sales were very poor (no finance approvals) and because of the scrappage scheme of 2009 there was severe stock shortage. Even franchise dealers were stocking other makes of prestige cars and those sales were very strong. Then the stock became so low that prices shot up something like 25% in 2009-2010 (and WBAC really grew)...

I remember one "deal" in 2010: Bought a 2007 ex-MoD Astra Life for under £3000 (the going rate then) in June '10 from BCA Bedford and sold it online to a buyer from Aberdeen for £4800 a couple of months later. They were going to the Edinburgh festival so I agreed to deliver the car there for extra £300, enough to cover the trip, hotel and flight back for two. Had a nice couple of days there actually. The next morning got an early easyJet flight back to Luton and a taxi to BCA Bedford armed with the £4800 fully expecting to buy two cars for that money. The cheapest out of 25 or so ex MoD Astras went for £4400! Only two months later. I know it's an extreme example but back in the day auction prices were more stable than they are now. 

My money will be on 3-8 year old stock, £3K to £15K 

[metcars 394]

2 hours ago, Nick M.K. said:

While I am a Remainer (ReMoaner, even ReScreamer) doom actually brings tremendous opportunities.

Do you remember 2008-2009?

Poor sales of used cars for a few months but because new and nearly new car sales were very poor (no finance approvals) and because of the scrappage scheme of 2009 there was severe stock shortage. Even franchise dealers were stocking other makes of prestige cars and those sales were very strong. Then the stock became so low that prices shot up something like 25% in 2009-2010 (and WBAC really grew)...

I remember one "deal" in 2010: Bought a 2007 ex-MoD Astra Life for under £3000 (the going rate then) in June '10 from BCA Bedford and sold it online to a buyer from Aberdeen for £4800 a couple of months later. They were going to the Edinburgh festival so I agreed to deliver the car there for extra £300, enough to cover the trip, hotel and flight back for two. Had a nice couple of days there actually. The next morning got an early easyJet flight back to Luton and a taxi to BCA Bedford armed with the £4800 fully expecting to buy two cars for that money. The cheapest out of 25 or so ex MoD Astras went for £4400! Only two months later. I know it's an extreme example but back in the day auction prices were more stable than they are now. 

My money will be on 3-8 year old stock, £3K to £15K 

Stop focusing on the negative nick, think of all those exciting business opportunities in china and india you're free to take advantage of. Plus with all that extra money they can plough into the NHS, if it does go tits up, you're well sorted for hyper tension!

[Nick M.K. 574]

Just now, met said:

think of all those exciting business opportunities in china and india you're free to take advantage of

Absolutely right, be positive! Now, where do I send my application for a Maruti franchise please?

[Contracts 68]

Nobody really has the answer, in our side of the industry many clients are locked into 2-4 year deals so they have no concern about residual values but when the come to renew it could be a different thing.  It might also lease the big funders taking hits on all returns.

Over the past few years we have seen an increase in personal contract hire but people who got cheap cars a couple of years back are now looking to replace their cars and prices are higher, partly due to poor supply on some brands from WLTP and residue predictions are lower.

The high end of the market in my opinion is stagnating and a few are taking some big lumps off retail stock, and not just seasonal adjustment, look at 991 GT, Ferrari 488.  

As for the general market, sub 10k is already competitive and will probably get more so if the economy shrinks as Doris won’t trade in her 3 year old Yaris etc so less decent stock.  

Another small factor is certain models will go for export if there is a collapse of the pound, A4, Avensis diesel etc to Ireland, Higher end to Malaysia but I guess this will depend on trade deals.

[twerp 69]

I wonder if there will be a surplus of nearly new stock when interest rates go up and lending criteria becomes stricter.

 

[metcars 394]

1 hour ago, Nick M.K. said:

Absolutely right, be positive! Now, where do I send my application for a Maruti franchise please?

Hasn't Rees Mogg set  one up in Dublin, oh wait no that's something else!

40 minutes ago, twerp said:

I wonder if there will be a surplus of nearly new stock when interest rates go up and lending criteria becomes stricter.

 

If I remember rightly, back in the 2008/9 times, all the 'big' boys were panicking and starting buying bangers at the block for silly money?

[Brunswick 10]

Don't forget Guys that if we have a no deal Brexit the £ will crash making new cars even more expensive which will surely have an impact on used values.  Speaking to a few main dealers they have all reported that the bubble has burst with less appetite for new car finance deals with people either handing back or settling the balloon, it may just be the uncertainty.  Interesting weeks ahead.  I personally can't see us leaving in the end after a second referendum, its the only way it can go.

[Screenman 47]

I carried the drop in the pound's value two years ago, prices are going up in January and again if the pound drops lower. Carriage companies for my imports have gone up skywards, so that makes matters even worse. The long haul manufacturers may sell things cheapers but the carriers are going to maximise income given a chance.

 

Forgot to add, according to WBAC latest email to me prices are going to drop, yesterday.

 

With industry prices set to fall, we're able to offer you more this Black Friday Weekend!1

But hurry, this is only available until midnight on Wednesday 28th November.

Get your updated valuation:

Edited November 29, 2018 by Screenman

[Brunswick 10]

I would imagine that most WBAC subscribers are people who have been on their site for a quote and they are trying to frighten those who are holding on to sell now whilst the auctions are still rammed with buyers. 

[BHM 994]

I certainly don’t see prices dropping. In the £800-4000 market punters seem only be changing when they have to (car knackered, written-off etc.), trade prices are high and will continue to rise because, as we all know, in this game a lack of sales = lack of secondhand stock = inflated prices. 

Unfortunately the punters at my end of the market don’t understand why they now can’t afford a car they want & they also haven’t got penny to maintain what they buy.

 

5 hours ago, twerp said:

I wonder if there will be a surplus of nearly new stock when interest rates go up and lending criteria becomes stricter.

 

Surely something’s got to give? From what I hear punters who haven’t got a pot to piss in are still getting PCP etc. deals, the new retail market is saturated with a fair percentage of people living on a financial knife edge - I guess the criteria will tighten if/when these punters start bouncing these companies.

[Nick M.K. 574]

5 hours ago, twerp said:

I wonder if there will be a surplus of nearly new stock when interest rates go up and lending criteria becomes stricter.

Where will this nearly new stock come? Bear in mind because of the strict lending criteria a lot of people will move away from brand new towards nearly new where the saving is 15-25% sometimes. 

come from? my question above should read

[twerp 69]

28 minutes ago, Nick M.K. said:

Where will this nearly new stock come? Bear in mind because of the strict lending criteria a lot of people will move away from brand new towards nearly new where the saving is 15-25% sometimes. 

come from? my question above should read

The same place it comes from now. End of term PCP / Leases etc

Nearly new cars are worse propositions for most people with higher monthly payments than some new cars with manufacturer contributions / 0% / min part ex allowance for deposit etc

 

39 minutes ago, BHM said:

Surely something’s got to give? From what I hear punters who haven’t got a pot to piss in are still getting PCP etc. deals, the new retail market is saturated with a fair percentage of people living on a financial knife edge - I guess the criteria will tighten if/when these punters start bouncing these companies.

Exactly - judging by the drop in condition on nearly new cars over the past 8 years, they must be handing them out to idiots.

5 hours ago, Brunswick said:

Don't forget Guys that if we have a no deal Brexit the £ will crash making new cars even more expensive which will surely have an impact on used values.  Speaking to a few main dealers they have all reported that the bubble has burst with less appetite for new car finance deals with people either handing back or settling the balloon, it may just be the uncertainty.  Interesting weeks ahead.  I personally can't see us leaving in the end after a second referendum, its the only way it can go.

I can see this happening. Compare the price of our used cars with the rest of Europe

Across the continent, cars we consider £500 bangers are worth £2500+ !

[Mojo121 229]

The £ will crash? According to Mark Carney... give over. The sooner we're out of The Fourth Reich the better.

A formal proposal for a second referendum should incite violence and rioting. 

[grant8064 219]

50 minutes ago, BHM said:

Surely something’s got to give? From what I hear punters who haven’t got a pot to piss in are still getting PCP etc. deals, the new retail market is saturated with a fair percentage of people living on a financial knife edge - I guess the criteria will tighten if/when these punters start bouncing these companies.

I don't know the first thing about new/nearly new but in the humdrum world of 4k - 7k used i've noticed a pretty sharp upturn in the number of declines we're getting from mainstream lenders in the last four months. Spring time we were getting auto acceptances on people you had to check hadn't nicked an office chair on their way out, not any more.

Could be as simple as us attracting more poorly rated punters but it does feel like lenders are tightening up a fair bit and being more cautious (not before time IMO).

[justina3 518]

13 hours ago, Mojo121 said:

The £ will crash? According to Mark Carney... give over. The sooner we're out of The Fourth Reich the better.

A formal proposal for a second referendum should incite violence and rioting. 

This has always raised my eyebrow spock style, You have so much legislation around about how you can say this on an advert, describe this mention something else ect, and you have people in such powerful positions who can say whatever the hell they like and to hell with what shit storm that follows.

 

[Mojo121 229]

6 hours ago, justina3 said:

This has always raised my eyebrow spock style, You have so much legislation around about how you can say this on an advert, describe this mention something else ect, and you have people in such powerful positions who can say whatever the hell they like and to hell with what shit storm that follows.

 

A good point. Makes me think as well of the ripples or waves it causes in the markets and how you can profit...

[Nick M.K. 574]

21 hours ago, twerp said:

I can see this happening. Compare the price of our used cars with the rest of Europe

Across the continent, cars we consider £500 bangers are worth £2500+ !

Cars in Europe are in 5 times better condition that UK cars?? Have a walk in central Paris next time you are there paying closer attention to bodywork and wheels :-)

UK cars are so much cheaper for one reason only: the right hand drive. If they had left hand drive and ready export market (larger than Ireland or Cyprus) prices would be the same. Anyone that sells left hand drive vehicles here will tell you they don't fetch the same money as UK spec cars. 

[twerp 69]

2 hours ago, Nick M.K. said:

Anyone that sells left hand drive vehicles here will tell you they don't fetch the same money as UK spec cars. 

No, older LHD cars sell for twice as much as RHD cars even in the UK. Didn't you just sell a LHD Jeep ?

 

2 hours ago, Nick M.K. said:

Cars in Europe are in 5 times better condition that UK cars?? Have a walk in central Paris next time you are there paying closer attention to bodywork and wheels :-)

 

Not sure I said that !

Edited November 30, 2018 by twerp

[trade vet 697]

If Brexit goes ahead I think stock may be down most at auction in the 3 or 4 weeks before.It depends on how Fleet managers and leasing companies react.The Trade will be nervous but whatever happens things usually stabilise within 3 months.Even when the oil price was suddenly quadrupled and finance companies refused to finance cars above 2ltrs,things returned to normal within 3 months.I think it is important to have extra funds availible around Brexit in order to take advantage of any market over reaction and most important, in case your bank ‘pulls the rug’ etc.

[Brunswick 10]

How would you explain the £ being worth 1.30 Euro prior to the referendum, today 1.13 Euro Mojo21?  No deal Brexit = 90p -1 Euro.

£5000 stock will be flying off the shelves but the dealers will need deep pockets because the part ex will be £25k Audi Q5's, BMW X3's etc... seen it all before in 2008.

Edited November 30, 2018 by Brunswick

[MrC 142]

Same could be said for Brexit...

 

[Brunswick 10]

The problem with new car PCP deals in my opinion is that the manufacturers own finance company is underwriting the business which it has a vested interest in.  Its a conflict of interest.  The FCA were supposed to be looking into this but I believe they are too busy inspecting smaller dealers to ensure we are using initial disclosure forms.