Where are used car prices with the MK8 launch and other worldly troubles?

[monkeyhanger]

When we come out of this, traditional rules may not apply (for a while at least....)

Too true. Supply and demand equilibrium can shift depending on the circumstances.

At the moment you've got key workers going to work or working from home. You've also got non key workers, some of which can fully do their job from home. Those people are on full pay and no worse off with COVID19 lockdown. In fact, some will be better off if they're saving on their commute costs by working from home.

You have others that are furloughed and may be waiting for their 80% pay off the government. Not sure what that situation is, how soon they get the money off the government, whether that's 80% of their gross or net pay etc. They might be a little worse off when they eventually get that money, but no commute costs.

Those cars should be depreciating to the tune of £250-300 per month, but with a performance MK8 still a way off, they might hold value if people are financially comfortable/confident and can't wait for the MK8.

On the other hand, we could see a bit of a dive in used prices if incentives are put in place to get us spending after all this is over and buying new looks a better proposition.

Right now, no one needs to go out and buy a car that the Government doesn't want you driving unnecessarily, and there's no-one in the showrooms to sell you it anyway.

We'll have to wait and see what consumer confidence is like at the end of this, and what incentives there'll be.

If you are PCPing and used prices drop substantially but there's good incentives on the new one, it might be a case of going to end of term on your PCP and handing back with no equity over GFV to grab that new bargain.

[mcmaddy]

The furloughed people on 80% get paid from the employer not directly from the government. Keeps everything on paye and the employer sorts everything out.

[My other womans a vw.]

Looking into the future when hopefully we’re getting back to normal,has anyone got any thoughts on what dealers might offer as incentives.
Obviously its all ifs,buts and maybes-I haven’t got a clue,but with the wealth of knowledge,experience and contacts people may have on here,what do people think?
So called experts on the internet give mixed opinions,as i’ve been in the market (used) for a while now,it’s something me and perhaps others are taking an interest in.

[monkeyhanger]

Looking into the future when hopefully we’re getting back to normal,has anyone got any thoughts on what dealers might offer as incentives.
Obviously its all ifs,buts and maybes-I haven’t got a clue,but with the wealth of knowledge,experience and contacts people may have on here,what do people think?
So called experts on the internet give mixed opinions,as i’ve been in the market (used) for a while now,it’s something me and perhaps others are taking an interest in.

All you'll get are ifs, buts, maybes - until we're over all this and financial institutions make their intentions known.

Most people buying new or nearly new do so with borrowed money.  VWFS will want people to keep buying cars via credit. VW will want people to keep buying cars on credit if they don't have the funds to buy outright.

Whether they'll try and ream more out of the UK market depends on a number of factors:-

How much money has COVID19 cost them? They'll look to get that back if they can.

How much extra money will the market bear, either through price rises or increased APR%? I would suggest not a lot! They could give you less for the same money - lowering the equipment spec.

If credit tightens up for the end user, we might see a big shift to leasing.

Most of the public that aren't self employed shouldn't be much worse off.

You're either working on full pay or furloughed on 80% pay.
You can't spend any money going to pubs, restaurants, cinemas etc. right now. What you can buy beyond food and drink is stifled a bit too - my wife has bought some clothes at George and Sainsburys rather than Next. Those not working have no commuting costs either. Mortgage rates pegged to the base rate have come down (about £30pm for me).

So for now, we can't spend what we,'ve got to the same extent. All that furloughed wage has to be paid for somehow, so I'd expect another 1 or 2% on PAYE or NI when we get back to normal, if it won't damage the economy too much to do so. Or the world sues China for being ultimately responsible for the knacker that caught this in the first place from eating a Bat (Ozzy Osbourne dodged a bullet all those years ago!).

[My other womans a vw.]

Yeah but,has he lost his mind,can he see,or is he blind?-Ozzy,that is!
Furloughed workers are still 20% down each month this goes on,your point on outgoings is a good one.
Even taking that into consideration,it’s hard to see it just carry on from where it left off.
I work for a conservatory company on the shop floor,I think we’ll be hit massively-who will want a Connie this year after what’s happened.
This is what i’m thinking about the car industry-will people want big ticket items,or will they wait?
If they do,it could be a buyers market.

[monkeyhanger]

Yeah but,has he lost his mind,can he see,or is he blind?-Ozzy,that is!
Furloughed workers are still 20% down each month this goes on,your point on outgoings is a good one.
Even taking that into consideration,it’s hard to see it just carry on from where it left off.
I work for a conservatory company on the shop floor,I think we’ll be hit massively-who will want a Connie this year after what’s happened.
This is what i’m thinking about the car industry-will people want big ticket items,or will they wait?
If they do,it could be a buyers market.

You might find people wanting more conservatories than ever! People are probably in great appreciation of their gardens right now, as they're stuck within their boundaries. I've had a bit of garden appreciation lately - just bought and fitted a load of smart interlocking rubber tiles for the deck in my back garden and painted my back gate and fences to brighten it up out back.

For those that choose to put off buying a new car, if too many do it, the car companies will have to stimulate the market by offering incentives to entice the buyers back.

Just too early to tell yet, but unlike those people who lived their early years during the second World War and had it ingrained in them to save for everything, we're a bunch of people normalised to credit and have so far maybe had a month of hardship/restriction and probably another month to come of it. Look at Spain and Italy - still big numbers of new cases and deaths every day, but they're starting to send people back to work because civilisation needs to carry on and they have to keep the economy going.

[My other womans a vw.]

If they were open and you could walk into a dealership today,found a car you wanted and began to haggle,what percentage off could you realistically expect?-take the virus out of it for now.
Now,let’s say our current situation lasts another month (could be a lot longer I know) and you did the same then,what would you expect off then?
Any thoughts?

[fredgroves]

Well, car makers have lost a huge pile of money which they might need to get back.

That either means they need to put prices up or down.

Additionally, vast numbers of people will be unemployed by the end of this but equally interest rates will be super low.

It's a strange situation, not like any before it and impossible to say which of those conflicting positions will play out.

[kmpowell]

IMO

- Mk8 hasn't yet entered UK production, so there are no existing capital stock risks that normally forces VW to pre-reg existing stock and or push supply to dealers for purchase/pre-reg/
- VW will be revising targets to ensure minimal hit to share prices, and that will begin by them removing costs (less people in showrooms, amalgamated franchise branches etc etc). If less cars are being built then there's less need for parts etc.
- APR will go up on non luxury goods. Also the days of access to cheap credit are over and the financial markets/banks are already adjusting accordingly with MUCH stricter borrowing rules.

Nobody knows for sure how this will all play out, but VW (as all manufacturers) are sat on a huge stockpile of cars they have been (and continue to be) unable to sell. These will be their priority, but if the demand isn't there then they will go unsold.

Personally I think we'll see a huge delay in Golf 8's hitting the UK market, 7.5's will plateau earlier in the depreciation curve and values will bolster and reflect.

[fredgroves]

Vw don't have stock. Every car is a factory order apart from the show room models dealers have but those aren't there to sell immediately. Anything vw want to sell needs to be ordered. No order, no sell.

I'm talking about new cars here, which is actually all vw itself sell. Das welt is just a vw UK backed scheme but the dealers themselves buy and sell vehicles.