When is the pricing bubble going to burst?
- Thread starter Temujin
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Im looking at used approved m4’s and I’ve not noticed any drops. When I first started looking prices started at £28k. Those cars disappeared. New cars entered the market around 31 and slowly crept up to 34ish. This past week a few have had £5 to £390 taken off. But nothing like back down to the £28k I am aiming for.
Probably a bad thing given BoE have signaled a rise in interest rates is coming in order to curb inflation
It's a ridiculous thing to do at any time. Why on earth would you want to borrow extra money on a mortgage for something that's just going to depreciate?
Err people do that all the time buying cars on finance, if the interest is low is then it is actually cheaper than PCP or hire purchase with 4-6% interest rates. I assume you paid for your car in cash?
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Obviously, I realise people take out finance, I took out a personal loan to purchase my latest car with a decent rate of 2.8%. I was talking about why anyone would want to re-mortgage to purchase a car, it's not something I would ever think of doing.
Even lower rates than personal loans and also for larger amounts? Pretty common practice.
Caporegime
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This is a terrible idea considering the next few years are more than likely going to see increases in interest rates.
It really depends on how long is left on the mortgage, lower mortgage rates doesn't = lower overall cost than a higher % interest rate loan over a lot shorter time period. You also have to take into consideration that you're taking out a secure loan on a depreciating asset. If you can't afford to pay the mortgage in the future you lose your house, all for the sake of buying a new car? It may be common practice, but that doesn't necessarily mean it's good practice.
Fixed rates?
As I said above, you can choose the duration to repay and additional borrowing, it doesn’t need to match the remainder of the ‘main’ mortgage. The second point is perfectly valid though and should be considered.
It doesn't matter, there's more to consider than just attractive interest rates. For example, if we want to borrow £20k on top of our £130k mortgage, so an overall mortgage of £150000 over 20 years @1% = £2065 of additional interest. A personal loan for the same £20k over 5 years @2.8% = £1,796.47 of interest. You've also got to take into consideration that I've given a very good interest rate of 1% for the entire length of the mortgage, which let's face it will not be the norm for much longer and could be much higher depending on LTV.
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I have suspected for a while that the JDM prices increases has started to soften. Given what I paid 18 months ago for my Impreza, even with spending about £10K on it during that time, I could probably get more than my total spend. Evo prices I think have softened and the £30K plus Evos are hanging around for longer than they did. I paid close to the top for mine (insert pic of dude slowing putting on clown makeup 
) and the ones asking £40K plus, the price comes down within a week or two.
) and the ones asking £40K plus, the price comes down within a week or two.
Delivery lead times on new cars seem to be improving progressively. My Dad ordered a new (factory order) top spec Nissan Qashqai in mid August and it arrived at the dealer last week. I mention that it's top spec because it no doubt has lots of semiconductor dependent gadgets in it. I know Mazda are quoting April delivery for a new MX-5 (only built in Japan).
Usually only new cars are eligible for the most competitive finance rates and deposit contributions etc. Why would someone pay close to the same price as new for some used examples and on top of that not get the best finance? Even for cash buyers it won't represent good value now that lead times are improving.
I think we will see a general downward trend in prices through 2022. This will be accelerated by reduced lead times on new orders and the mainstream shift now to mild-hybrid and eventually full electrification. However, I agree that we probably won't see used prices going back to 2019 levels for a while. I don't think used prices will go up anymore though - it's become unsustainable and frankly quite ridiculous. This is indeed a bubble that will surely burst.. or at least steadily deflate!
Usually only new cars are eligible for the most competitive finance rates and deposit contributions etc. Why would someone pay close to the same price as new for some used examples and on top of that not get the best finance? Even for cash buyers it won't represent good value now that lead times are improving.
I think we will see a general downward trend in prices through 2022. This will be accelerated by reduced lead times on new orders and the mainstream shift now to mild-hybrid and eventually full electrification. However, I agree that we probably won't see used prices going back to 2019 levels for a while. I don't think used prices will go up anymore though - it's become unsustainable and frankly quite ridiculous. This is indeed a bubble that will surely burst.. or at least steadily deflate!
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Caporegime
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I have suspected for a while that the JDM prices increases has started to soften. Given what I paid 18 months ago for my Impreza, even with spending about £10K on it during that time, I could probably get more than my total spend. Evo prices I think have softened and the £30K plus Evos are hanging around for longer than they did. I paid close to the top for mine (insert pic of dude slowing putting on clown makeup
Classic cars will only go one way. The fact Electric cars are upon us will mean these will become collector pieces or for weekend drivers.
I think what this thread is going on about are 5 year old 5 series that still cost 30k+. Even rackety old E90's going for 10 grand.
Ah fair enough. Well, pre covid WBAC were offering £17K on my 3 series. Last time I checked it had risen to £22K. MY17 F31 330D M Sport Plus with 46K miles.
I know
if you’d have read the rest of the post you’d have realised this.E.H. You can take that extra £20k mortgage over 5 years and the original £130k can continue for the remaining 20 years.
Taking your £20k @ 1% the cost would be £510.14, the difference being the amount is secured against the property instead of the car. That assumes there is no product fee of course, it’s also far more difficult to set up compared to getting a personal loan/car finance.
The point about interpreted going up is isn’t really relevant, the rates for personal loans will not remain static and will rise at the same rate as mortgage rates. The main reasons for the difference in rate between the two products is risk, a person is always going to be able to obtain mortgage borrowing at a lower rate than a personal unsecured loan/car finance.
I’m by no means advocating someone does this, I’m just explaining how it can be done and made sense.