When are secondhand prices going to drop

Mailman

Anecdotal evidence would suggest that the dealers' forecourts are overflowing with secondhand cars and that finance companies are pumping huge amounts of cars through the channel. Private sellers are finding it hard to shift their cars too.
When are we going to see the price of secondhand cars dropping to more realistic levels? Dealers still put silly sticker prices on very ordinary 3 year old cars.
I figure the floor for prices will be when it makes no financial sense to source a similiar model of car in the U.K.

Gumbo

good question, i was in the market for a D4D avensis, and the cleanist one i wanted was in waterford advertised at 16,945. i rang the girl and asked her would she meet me half way to go through the car and she said no, she didnt wana risk driving for an hour with the risk of not selling the car to me.

so i said ok, if the car is as clean as you say it is, i would travel to waterford from dublin and buy it there and then subject to a good look around etc and offered her 16k and she point blank refused.

so i told her good luck selling it as your not willing to travel, and wont budge on price when its a buyers market!!!!

so im off to england tomorrow to buy a newer, higher spec (T-Spirit Saloon) than hers for the same money!!!

MarkN

Mailman wrote: »

When are we going to see the price of secondhand cars dropping to more realistic levels?

Are you confusing this forum with a property one?

"more realistic levels"??

We're talking cars here, there's only so much you can inflate the price of a car to and the figures we are talking could not be summed up in a general statement like the above.

The arse is not going to suddenly drop out of the second hand car market if that's what you are hoping for?

Mailman

I figure one sign that the market is under stress is when better quality cars start to go through the auction rings. In the past when I have visited auctions all that appears to be sold there is the filth that isn't good enough to go on a forecourt. Has anyone seen any improvement in the quality of auctioned cars.

Mailman

MarkN wrote: »

Are you confusing this forum with a property one?
"more realistic levels"??
We're talking cars here, there's only so much you can inflate the price of a car to and the figures we are talking could not be summed up in a general statement like the above.
The arse is not going to suddenly drop out of the second hand car market if that's what you are hoping for?

I disagree with you. Cheap credit has been fueling the market for the last ten years. Now that credit isn't as readily available for everyone including the dealers something has got to give. Dealers can't afford to have 200 plus cars on their forecourts anymore with fewer people walking through the doors of their showrooms. With VRT artificially inflating the price and with UK imports seen as a very realistic alternative to buying on the forecourt here( as shown above by KCEIRE's post) the market has no sound footing and has plenty of room for a drop.

MarkN

kceire wrote: »

so i told her good luck selling it as your not willing to travel, and wont budge on price when its a buyers market!!!!

so im off to england tomorrow to buy a newer, higher spec (T-Spirit Saloon) than hers for the same money!!!

€1,000 quid off a private sale (remember there is no dealer profit here) is asking quite a lot. I wouldn't have refused anyone talk of a price reduction over the phone though, I would've said come look at the car and we can talk.

From my experience of selling cars privately, I wouldn't meet you an hour away either. If you want the car, you go and look at it.

Adding more kms to the clock does not help and there's a good chance the insurance may be cancelled on the car as the owner is not using it anymore (not the smartest ideas I grant you but it happens!) so she may not have been covered to drive it.

Mailman

MarkN wrote: »

€1,000 quid off a private sale (remember there is no dealer profit here) is asking quite a lot. I wouldn't have refused anyone talk of a price reduction over the phone though, I would've said come look at the car and we can talk.

From my experience of selling cars privately, I wouldn't meet you an hour away either. If you want the car, you go and look at it.

Adding more kms to the clock does not help and there's a good chance the insurance may be cancelled on the car as the owner is not using it anymore (not the smartest ideas I grant you but it happens!) so she may not have been covered to drive it.

Yes, but that's not KCEIRE's problem in a buyer's market and if this is the car
http://www.carzone.ie/used-cars/Toyota/Avensis/D4D-T4/766623/
then the seller is still looking for a buyer while KCEIRE is sorted already.

As for the parallel with the housing market I figure the motor market will be even more susceptible to downturn now that credit has dried up because cars are transportable. Housing market is insulated as you can't buy a house in Cork or Manchester and expect it to serve your needs if you live in Dublin. If you can source a car cheaper 200 miles away and it's worth your time to travel then you'll travel to save 2 or 3 thousand euro.

MarkN

Mailman wrote: »

As for the parallel with the housing market I figure the motor market will be even more susceptible to downturn now that credit has dried up because cars are transportable. .

The credit hasn't dried up.

The criteria for getting credit has changed.

If the bank feel you can't afford the loan, you won't get it but there are plenty of people getting credit - the banks just are being a bit fussier.

Gumbo

MarkN wrote: »

€1,000 quid off a private sale (remember there is no dealer profit here) is asking quite a lot. I wouldn't have refused anyone talk of a price reduction over the phone though, I would've said come look at the car and we can talk.

From my experience of selling cars privately, I wouldn't meet you an hour away either. If you want the car, you go and look at it.

Adding more kms to the clock does not help and there's a good chance the insurance may be cancelled on the car as the owner is not using it anymore (not the smartest ideas I grant you but it happens!) so she may not have been covered to drive it.

i sold my X5 a few weeks back and dropped 4k to the buyer, as its a buyers market, if he didnt buy it then i would not of sold it!!

i have been keeping an eye on that particular avensis since january and it is still for sale. if you really need to sell a car the why refuse a good offer rather than risk keeping it for another 2 months with no buyer. go into a dealer and see what they ould offer for that car, maybe 12k if your lucky.

i think it was a genuine offer. and driving for an hour would add maybe 100km to the cars mileage, not really devalueing now is it?

MarkN

kceire wrote: »

i sold my X5 a few weeks back and dropped 4k to the buyer, as its a buyers market, if he didnt buy it then i would not of sold it!!

i have been keeping an eye on that particular avensis since january and it is still for sale. if you really need to sell a car the why refuse a good offer rather than risk keeping it for another 2 months with no buyer. go into a dealer and see what they ould offer for that car, maybe 12k if your lucky.

i think it was a genuine offer. and driving for an hour would add maybe 100km to the cars mileage, not really devalueing now is it?

I take your point about the car sitting there since Jan but if you want to drive an hour to meet someone who will possibly never call you again after seeing the car, who might decide they don't like the colour of the floor mats or the condition of an alloy wheel... (these things happen!) then that's your own choice, I'm just saying I would't be that surprised if I called a private seller and asked them to drive an hour away and they said no, sorry.

There's a bit of a difference between the price of an X5 and an Avensis for starters, you were able to afford to take a 4k hit on the car - why didn't you price it competitively in the first place if you had to take 4k off the price? That's in a roundabout way what you are saying about the person selling the Avensis.

There's a simple rule to selling cars privately, greed will leave you with a car on your driveway - price something like you want to sell it and you will have no problems.

galwaytt

MarkN wrote: »

€1,000 quid off a private sale (remember there is no dealer profit here) is asking quite a lot. I wouldn't have refused anyone talk of a price reduction over the phone though, I would've said come look at the car and we can talk.

From my experience of selling cars privately, I wouldn't meet you an hour away either. If you want the car, you go and look at it.

Well then you'll be like that lady in Waterford, i.e still sitting on your car, whilst the others get sold.

The facts are simple: there are more cars than buyers, by a long shot. The forecourts are full. I rang a nearby garage today about a RAV4. He rang back inside 15 minutes, and he gave me a choice of 3, and wanted to know if I wanted him to come to me with it !!

I had an 01 E200k for sale. I got an enquiry from a gentleman in Dundalk (retired), and seeing as I had nothing better to do on a Sunday, I brought the car to him. He saw it, and we did the deal, and I brought it home. The following Saturday, I drove to Mullingar to deliver it - he came down to there. I made close to my asking price, his buying experience was made easy, the car sold. To do otherwise was to, in all likelihood, still have the car now...........cars are not houses, and you don't get your money back, full stop. You don't even come close. I estimate that a car costs 3500 p.a., and that's how much to write of on it. If your getting more for it, residual, than that calculation gives you from what you paid, you're doing well, and pass the Karma on , man.........:)

P.S. I drove from Galway, btw.........

E92

It's very simple really. Dealers will ask a price they think the punter is willing to pay.

If it's too high, then people don't buy. They'll show little or no interest. If it's too low, the car will be gone in a flash.

If people think used cars are too dear, then people won't buy them, so dealers will be forced into dropping prices, or else they'll have a collection of used cars for sale that they can't shift, and they certainly don't want that.

MarkN

galwaytt wrote: »

Well then you'll be like that lady in Waterford, i.e still sitting on your car, whilst the others get sold.

...

I sold a Pug 206 (a car that there are oodles of in this country!) in a week on Carzone - I had to get in the lift at my front door, go down to the car park and do a deal. I had 4 calls about the car in that short space of time.

I sold an Audi S3 over the phone.

I don't need selling advice, I'm just giving an opinion from a different angle.

Your price is more important than how you far you are willing to travel.

Mailman

MarkN wrote: »

The credit hasn't dried up.

The criteria for getting credit has changed.

If the bank feel you can't afford the loan, you won't get it but there are plenty of people getting credit - the banks just are being a bit fussier.

spotted this on another forum. Banks aren't giving credit so dealers aren't able to sell cars to customers.
http://www.thepropertypin.com/viewtopic.php?p=62273&highlight=anecdotal#62273

galwaytt

MarkN wrote: »

I sold a Pug 206 (a car that there are oodles of in this country!) in a week on Carzone - I had to get in the lift at my front door, go down to the car park and do a deal.

I sold an Audi S3 over the phone.

I don't need selling advice, I'm just giving an opinion from a different angle.

Your price is more important than how you far you are willing to travel.

You're missing the point - if the cars you sold went that quick, they were obviously fairly priced. The Avensis above would appear to be both expensive AND out of location. You can't expect people to travel AND pay over the odds.

Are you in the greater D area, btw?

MarkN

I'm not missing any point and I'm not saying anyone is wrong about the price on this car !!!!!!!!!!!

What I am saying is travelling for 2 hours there and back to sell a run of the mill car like a Toyota Avensis is madness! Price the fooking thing correctly and a seller shouldn't have to drive anywhere and a buyer shouldn't feel the need to ask!

If I was selling a Bugatti Veyron and I had it on Carzone a year and suddenly one day I got a call to meet a man in Paris to sell it, I would, but we're talking about a family hatch here.

This whole "nobody has any money left anymore" thing does not wash with me I'm afraid.

Mailman

MarkN wrote: »

This whole "nobody has any money left anymore" thing does not wash with me I'm afraid.

Well it should wash with you. The housing market has stalled not because everyone woke up one day and realised houses are too expensive but rather because the banks have removed all 100% loans from the market and started applying more sensible lending criteria. The headless chickens and sheeple can't get access to credit anymore so no sales are being completed.

niceirishfella

MarkN wrote: »

This whole "nobody has any money left anymore" thing does not wash with me I'm afraid.

+1

MarkN

Mailman wrote: »

Well it should wash with you. The housing market has stalled not because everyone woke up one day and realised houses are too expensive but rather because the banks have removed all 100% loans from the market and started applying more sensible lending criteria. The headless chickens and sheeple can't get access to credit anymore so no sales are being completed.

Em, 100% mortgages mean jack to me buddy. My job will be there for me tomorrow, the day after that and the month after that there but for the grace of God.

If you are working in an industry susceptible to market conditions, fair enough but if you think 100% mortgages are the reasons for a slow in the economy then I'm sorry for laughing but I am all the same.

I might be so bold as to repeat myself and say sure, certain people are being refused credit but there are an awful lot who are not.

Let's go back to talking about the arse falling out of the second hand car market..................

Mailman

MarkN wrote: »

Let's go back to talking about the arse falling out of the second hand car market..................

We are talking about the second hand car market. These are high sticker price items and not bought as discretionary purchases. Only the monied or those with line of credit in place can participate.
A market is characterised by how it operates at it's margins and the margins of this market are supported by credit. Less credit available, less cars sold.

MarkN

So only the rich and famous are allowed buy cars now, due to market conditions?

Ok.

Mailman

MarkN wrote: »

So only the rich and famous are allowed buy cars now, due to market conditions?
Ok.

The very rich like to keep a low profile and they'll be the ones who come out smiling on the other side.
Those with stable jobs and provable income are the only ones who'll get credit at decent interest rates now.

MarkN

Mailman wrote: »

The very rich like to keep a low profile and they'll be the ones who come out smiling on the other side.
.

Most of the very rich don't really buy cars with finance/credit so it's not really relevant.

Mailman wrote: »

Those with stable jobs and provable income are the only ones who'll get credit at decent interest rates now.

I'm sure Merlin Motor City would beg to differ on that one but I'm in agreement with you that people with stable jobs are still buying cars, that was my point back at 12 midday though.

Mailman

MarkN wrote: »

I'm sure Merlin Motor City would beg to differ on that one but I'm in agreement with you that people with stable jobs are still buying cars, that was my point back at 12 midday though.

That's not much of a point to be making. There is a base level of demand for motors as there is a base level of demand for houses due to their utility value but as with the housing market supply far exceeds base level of demand which is why the market for secondhand cars is going to collapse in the near future.
Only question is when will sellers give in to the pain and we see prices start to drop.

MarkN

Mailman wrote: »

That's not much of a point to be making. There is a base level of demand for motors as there is a base level of demand for houses due to their utility value but as with the housing market supply far exceeds base level of demand which is why the market for secondhand cars is going to collapse in the near future.
Only question is when will sellers give in to the pain and we see prices start to drop.

Unless your name is Brian Cowen and you're telling me VRT is going at midnight tonight, car prices will continue to be inflated in this country, albeit after tax and it ain't going to be changing anytime soon.

Mailman

There is no direct relationship between secondhand car prices here in Ireland and their VRT, VAT and Duty component when purchased new.
VRT still determines pricing of secondhand cars to a small extent but it would be foolish to overstate it's impact on any car over three years old. It's impact on pricing of secondhand cars is the amount it adds to the UK book value of any model of any car you wish to purchase. As UK book value of cars and their VRT cost is many thousands of euro below sticker prices on Irish dealer forecourts you can't use VRT as an argument to prove that prices won't drop. UK book value plus VRT is a threshold which Irish sticker prices are still well above so there is plenty of room for a collapse in market prices here.
Forget about new car list prices for secondhand cars, like houses, a car is only worth what someone is willing and financially able to pay for it. Basic economics.

MarkN

LOL.... "basic economics".

So how the hell is VRT not directly linked to the price of a car in Ireland be it used or not when the original price (doesn't matter how many add on taxes are involved, the overall original price the first buyer paid for it) the car cost in this country is directly linked to how much is it worth two...three.. years down the line???

I've actually just checked the date there to make sure this is not the 1st April. :rolleyes:

Mailman

Example for those of limited understanding.
You buy a 32" widescreen TV two years ago for 800Euro.
Now no-one will give you 150 quid for it even though it is perfectly servicable and VAT at 21% was charged for it initially.
A secondhand car like a TV is only worth what someone is willing to pay for it and don't care how much government tax was paid on it initially.

MarkN

Just to use your little example... (first it was the property market.. now it's flat screen TVs)...A Sony Bravia that cost €2,000 last year is now worth €1,000.

A VW Passat that cost €30,000 last year has not followed your LCD TV and lost 50% of its worth in 12 months... once again you are using a ridiculous comparison which is not even remotely relevant to car prices.

Just to explain to people with "limited understanding"... VRT is a double tax, your TV does not suffer the same taxes... VRT inflates prices... VRT has to be paid on cars, a car being a few years older still has that initial inflated price in the margin (hence why so many people go to the UK) so people and dealers are all working off making a sale based on that inflated price.

This has been discussed to death on this forum about how the removal of VRT WOULD make the arse fall out of the used car market, I suggest you go search for some info on it.

I'm off to wash my €35,000 car.. I paid twice that for it in October.

E92

Mailman wrote: »

A secondhand car like a TV is only worth what someone is willing to pay for it and don't care how much government tax was paid on it initially.

Exactly! The price in the used car market is determined by the laws of supply and demand, nothing else as there's no taxes to reduce economic efficiency in the used car market(unless it's imports but that's another day's work).

Of course the price of used cars is influenced by VRT on new ones, but that's still to do with the laws of supply and demand. I might have been willing to pay €50k for a 07 520d, or €46k for a 06 one in the knowledge that a new one is €54k, plus delivery, metallic paint etc. Then I hear about the new VRT rules, find out that the 520d is actually very good on CO2, find out that BMW will be passing on the VRT savings in full to the consumer, and I look at the second link in my sig, and I see that I can get a brand new 520d for €46k. My interest in the used 520ds is now zero. Why? What seemed like a very reasonable price is now completely overpriced. Why pay those prices when I can get so much more when I buy a new one? When I'm informed of this information my interest in the used 520d diminishes and demand for used 520ds falls. At the same time, lots of people will be taking delivery of their 520ds in July, quite possibly they're trading in older 520ds for new ones,and supply increases. The price falls again.

When dealers start reducing prices of used cars then the demand for them goes up and supply goes down. We're now back at the "equilibrium point" for supply and demand and the market is now working like it should.

Of course dealers can choose what price they want to sell their cars for. But nobody has to buy them. If they want sales, then they'll have to price it right.

Mailman

E92 wrote: »

Exactly! The price in the used car market is determined by the laws of supply and demand, nothing else as there's no taxes to reduce economic efficiency in the used car market(unless it's imports but that's another day's work).

I myself bought a top of the range secondhand 7 year old luxo barge for absolutely tiny money.
VRT had no input on the purchase price and both myself and the seller knew that it was pointless to mention it or the original sticker price on the car because it didn't matter one jot to me the buyer.
It was from a private seller in a remoter part of the country so I wasn't dealing with a dealer who expected to find another sucker coming through the door if I passed on the car.