What's going to happen to the car market?

[bazaarboy]

The Covid19 situation is dreadful and depressing. And this thread isn't making light of the seriousness of the pandemic, but I hope its more like an opportunity to for a bit of distraction.

What do you think will be the effect of this situation on the car market? New and used. Ordinary cars and performance?

Personally I wanted to buy a little sporty weekend fun car, but I'm holding back now.
I know WBAC are dramatically dropping their offered prices and finance companies are nervous about lending...

 

[Fusion]

People that have overstretched on finance/lease deals might find themselves in trouble if they're laid off/on a reduced income. Can see the market going south. Once it's all over, those in a position to do so will probably be able to treat themselves to some very favourable deals.

 

[Dandle]

The bottom was already dropping out of the new car market before this. My local BMW dealer has been very quiet since the beginning of the year and the service yard always has spaces whereas in previous years it was too full. It's only going to get worse as money will get tighter and potentially there are going to be big job losses and companies closing this year.

 

[Rroff]

Won't lie I'm hoping if/when things go back to normal I can pickup a good deal on a new or nearly new vehicle.

 

[Hades]

I'm currently leasing for the first time ever. It was meant to be a stop-gap while I decided what to do long term. Although it will be a problem if I lose my job, I'm already glad I leased rather than bought something. It has taken the risk of massive depreciation away from me. But I'll be watching for any good deals later in the year. If something tempts me then I'll buy in a low market. So I'm hoping for price falls (obviously don't want people to lose their jobs to cause those falls though - but it's inevitable).

 

[Fusion]

Anyone have views on which cars may drop the most? Performance stuff, diesels, saloons? I'd imagine SUVs will hold up fairly well, and anything super eco-friendly. Perhaps we'll see the same relative depreciation curves as in a normal market, but just steeper?

 

[Mr_Sukebe]

My expectations:
- A lot of people who were a bit borderline financially, and now find themselves with no salary or significantly reduced income either giving back their car or having it repossessed, and substantial reduction in people feeling confident about tying themselves into a new 3 year contract
- The result just compounding the drop in sales that had happened prior to Covid and a subsequent glut in vehicles available
- WLTP was already encouraging dealers to sell cars not simply to meet customers requirements, but sales desires to ensure that manufacturer emission targets can be met
- The above leading to there being a number of people looking for a "cheap" solution. I can see that actually pushing up the prices of the older/lower priced cars
- I see the value of newer vehicles being utterly destroyed. I'm guessing that there will be a lot of people previously considering a 2-3 year old car to now being a "luxury" and not a "necessity", and keeping with their existing 4-6 year old car. In addition, if manufacturers find themselves inundated with "returned" early PCP/PCH cars, the dealers will be knocking them out on the cheap.

 

[bazaarboy]

Private sellers will probably hold off selling if they can.
Dealers will vary dramatically depending on the state of their finances.

 

[Hades]

Anyone have views on which cars may drop the most? Performance stuff, diesels, saloons? I'd imagine SUVs will hold up fairly well, and anything super eco-friendly. Perhaps we'll see the same relative depreciation curves as in a normal market, but just steeper?

BMW's, Mercedes and Audi's as people can't afford their PCP anymore. Diesel already harder to sell so that will get worse.

 

[Maccapacca]

I was a day away from committing to an iPace. Now I'm keeping what I have and binning the deal on the iPace.

Don't want a 75k car sat not being driven with another car I can't sell and need to insure and keep running

 

[silvagti]

- I see the value of newer vehicles being utterly destroyed. I'm guessing that there will be a lot of people previously considering a 2-3 year old car to now being a "luxury" and not a "necessity", and keeping with their existing 4-6 year old car. In addition, if manufacturers find themselves inundated with "returned" early PCP/PCH cars, the dealers will be knocking them out on the cheap.

That was my main thought. I think the new to 3 year old market has already been hit hard by many putting off changing cars due to the new electric models on the horizon as they plan to switch away from fossil fuels.

Plus a lot of 2-3 year old stock will probably struggle to sell due to lack of demand. Likewise nobody is going to buy a new car in the current climate. Older cars 5-10 years plus probably won't see much impact though.

Could be bargains to be had if you have cash available and are looking to buy though I don't know if older performance and sports models will see much of a drop. My experience is that the kind of people who over leverage themselves tend to buy new cars on PCP rather than older models!

 

[Fusion]

I was a day away from committing to an iPace. Now I'm keeping what I have and binning the deal on the iPace.

Don't want a 75k car sat not being driven with another car I can't sell and need to insure and keep running

I can see JLR being in some trouble soon. Lots of pricey cars that are heavy, not great on emissions and for many models, not class leading (or even runner up). They were feeling the pressure previously, and this will be strongly exacerbated now.

 

[wesimmo]

Anyone have views on which cars may drop the most? Performance stuff, diesels, saloons? I'd imagine SUVs will hold up fairly well, and anything super eco-friendly. Perhaps we'll see the same relative depreciation curves as in a normal market, but just steeper?

Anything that has a premium due to badges etc would be my guess.

The extreme high end might not be as hit due to the super rich being able to ride it out better?

It'll be the middle market Audi/BMW where people stretch themselves to have the badge on finance that will be hit the most IMO.

 

[Nasher]

The rare/classic and more exotic stuff rarely takes a big hit. It's seen as one of the more stable things to invest in. People just hold on to them until the market picks up again.

Run of the mill German rep-mobiles though... prices will tank and the market will be flooded with them (even more than it is already).

At least petrol is dirt cheap at the moment!

 

[Journey]

Wait for the March registration figures to be published by the SMMT and they will tell you what you need to know, obviously followed by April for a more well rounded picture.

Given the relaxation of MOTs for a while it'll mean people are able to hang on to their cars for a while longer assuming they are not literally falling to bits, this will have a knock on effect for both new and used markets.

 

[Haze]

I have got another car on the way, already had 3 people say they won't come out to see it atm, which is fair enough, but now I am going to have to insurer x2 cars until its all over, which is not ideal

 

[Matmulder]

I'd sold my Evora 2 weeks ago, just before things really started to go south, and he (understandably) pulled out. As did the person who asked me to contact him if it didn't sell. Now it's probably worth about £3k less than it was! the high end of the market (especially the 2nd car/sunday car side of things) is going to tank hard over the next few weeks I reckon. Thankfully I'm in no rush to sell so I'm just going to keep it.

If you're in the market for something unusual, and are financially solid, in a few weeks time you could get some real bargains along with dirt cheap finance....

 

[grudas]

I think the generic stuff and new cars will go down/be harder to sell.

the more weekend stuff will be difficult until this blows over but once it is back to "normal" it'll be pick up again very quickly.

for e.g. my s2000, no plans to sell it.

 

[Gibbo]

I was planning to sell the Abarth around May, but with this Virus then I am afraid I will just keep it, I am absolutely not going to have randoms coming to my house and then get in a car with them for a test drive.

If I was looking for a car right now I'd also only buy from a dealership following safe process but saying that most of them are closing their showrooms and car sales area and just leaving the mechanic side of business open.

Simple fact is most people wont want to go buy and view cars now, as you increase risk of virus to yourself and likewise many won't want to sell for same reason.

Those with financial issues may have to take a big hit as the market will reduce in short term so their might be deals to be had, likewise for small car traders who need cash flow might pump out cars cheap. Otherwise many will just wait it out.

 

[TNGL]

Might we see Aston Martin unfortunately go bankrupt?

My guess is now that car values across the new and used market will decrease. Uncertainty is high for individuals and companies alike and the only thing that can be expected from uncertainty, is a reduction in the price level. We've seen companies cut supply but I do still think think reduction in demand will have a greater influence on the price level.