2nd hand car prices still inflated?

[Jono8]

Of course it’s relevant, it’s not just about technology gizmos or features like air conditioning, it’s also the physical construction of the car.

There are reasons why you are more likely to walk away from a serious collision in a modern A segment super mini than you would a 30 year old Volvo barge.

15 years ago I’m pretty sure my car only had a drivers air bag. My current car had 4 or 5 airbags just for the driver.

You also ignored the point about modern drivetrains and how much more complex they are to hit emissions requirements.

Cars are simply so much better than they were 10, 20, or 30 years ago. They are also significantly more complex products for multiple reasons which include safety, emissions standards and consumer tastes.

It isn't relevant to the point i'm making at all. Again, look clearly into your reasoning - the eventual result of this is cars being absurdly beyond the reach of most people.

You cant just excuse manufacturers/the economy by saying "yeh well they are safer and have more gadgets now".

The fact remains is that car prices have increased hugely beyond inflation/wage growth, which isn't sustainable long term (unless everyone is happy for cars to only be affordable by a small amount of very rich people)

 

[Richie]

Not really. Just moving the goal posts.

A Dacia Sandero when it was first released in 2013 was £6k starting. It is now £14k starting

That is 2.3x whilst wages have only gone up just over 1.3x since 2013.

Inflation calculator says that £6k from 2013 should be £8,155.92!!

You also have to factor in tariff charges since Brexit which never used to be added to cars. Ford, as per your example, build their cars in Europe for the UK market so every car now attracts a tariff cost of around 10% when they are imported into the UK.

 

[b0rn2sk8]

I never said it was the only reason car prices have increased and I also can't see how you can dismiss it when it’s clearly a relevant factor.

They ARE absolutely adding more material to cars be that to make them safer, more comfortable or adding new features. Thats going to be an above inflation increase to the price.

If a Renault Clio was the same car it was in 2000, you’d have a point but it simply isn’t. Can you even get a car with manual windows these days?

List prices on cars are also out of control and can basically be ignored because they lack as much relevance as your argument.

 

[Jono8]

I never said it was the only reason car prices have increased and I also can't see how you can dismiss it when it’s clearly a relevant factor.

They ARE absolutely adding more material to cars be that to make them safer, more comfortable or adding new features. Thats going to be an above inflation increase to the price.

If a Renault Clio was the same car it was in 2000, you’d have a point but it simply isn’t. Can you even get a car with manual windows these days?

List prices on cars are also out of control and can basically be ignored because they lack as much relevance as your argument.

But it isn't a relevant factor.

A lot of technology gets better, but actually ends up cheaper, or at least stays within a reasonable relationship to inflation.

Cars have just gone ridiculous.

In 2008, a new Fiesta cost the average worker only about 35% of their annual salary. In 2013 a Sandero only cost about 22% of their salary.

Now, even the cheapest Ford car is £25k, which is 70% of the average persons wage! Even the Dacia costs 40%!

Essentially, over the last decade/decade and a half, cars have pretty much doubled in price in relation to wages.

I think "relevant" might not be the right word as such. What I am saying is that the extra tech etc is no excuse, and if it continues to be used as an excuse then cars will just become something only the very rich can afford.

 

[b0rn2sk8]

But it isn't a relevant factor.

It is, I just can’t see how you think it isn’t.

A lot of technology gets better, but actually ends up cheaper, or at least stays within a reasonable relationship to inflation.

This is a logical fallacy for 2 reasons, technology isn’t actually getting cheaper, it’s starting to get more difficult.

The stuff being added to every day cars in 2024 didn’t exist in 20 years ago or it wasn’t fitted to them. So even if it got cheaper to fit, it didn’t previously form part of the cost envelope of the car so however much it costs now is additional.

This is not a defence of modern car pricing, it’s just an objective fact that cars are significantly more complex than in previous decades. Complexity = cost.

Cars have just gone ridiculous.

…and I’m done!

 

[Jono8]

It is, I just can’t see how you think it isn’t.

This is a logical fallacy for 2 reasons, technology isn’t actually getting cheaper, it’s starting to get more difficult.

The stuff being added to every day cars in 2024 didn’t exist in 20 years ago or it wasn’t fitted to them. So even if it got cheaper to fit, it didn’t previously form part of the cost envelope of the car so however much it costs now is additional.

This is not a defence of modern car pricing, it’s just an objective fact that cars are significantly more complex than in previous decades. Complexity = cost.


…and I’m done!

I still don't understand the point you are making though, or how it is a valid excuse for where prices are now??

Car prices have gone ridiculous compared to wage growth. That is just a fact. Stating that they have more tech in them now neither changes that, nor excuses it.

As I keep saying, the eventual outcome of accepting and excusing this is cars no longer being affordable for the average person.

If the median salary was now £45-50k (which is actually where it should be), a £14k Dacia Sandro would be ok. However it's not, so car prices are starting to get silly (extra tech or not).

 

[EvilRob]

If the median salary was now £45-50k (which is actually where it should be), a £14k Dacia Sandro would be ok. However it's not, so car prices are starting to get silly (extra tech or not).

Yes, wage growth has stagnated in the UK compared to other countries. I don't know why that means car prices are "silly" or "ridiculous" although they are certainly becoming less affordable.

 

[Jono8]

Yes, wage growth has stagnated in the UK compared to other countries. I don't know why that means car prices are "silly" or "ridiculous" although they are certainly becoming less affordable.

Silly in relation to annual salaries.

This is a good run down:

The cars which have seen the biggest price inflation - Moneybarn

Which cars have become more expensive over time? And how has driving become more costly? Our study reveals all.

www.moneybarn.com

A Ford Focus (your standard family hatchback) went from 65% of an annual salary on 2012 to nearly 90% in 2022.

That seems like a pretty "silly" increase to me. Loads of the standard/regular income family car prices have far outstripped inflation and wage increases.

 

[EvilRob]

Silly in relation to annual salaries.

This is a good run down:

The cars which have seen the biggest price inflation - Moneybarn

Which cars have become more expensive over time? And how has driving become more costly? Our study reveals all.

www.moneybarn.com

A Ford Focus (your standard family hatchback) went from 65% of an annual salary on 2012 to nearly 90% in 2022.

That seems like a pretty "silly" increase to me. Loads of the standard/regular income family car prices have far outstripped inflation and wage increases.

Yes, but mainly because the UK is screwed, in part due to self infliction. It's painful but it isn't silly.

 

[b0rn2sk8]

I still don't understand the point you are making though, or how it is a valid excuse for where prices are now??

Car prices have gone ridiculous compared to wage growth. That is just a fact. Stating that they have more tech in them now neither changes that, nor excuses it.

Since when were car prices determined by wage increases in the U.K.

As I keep saying, the eventual outcome of accepting and excusing this is cars no longer being affordable for the average person.

I think you’re missing a key point in that average people don’t buy new cars in cash. They finance them and up until very recently, new cars have never been as accessible. They actually getting more accessible again, you can get in a brand new car for a few hundred a month again.

If the median salary was now £45-50k (which is actually where it should be), a £14k Dacia Sandro would be ok. However it's not, so car prices are starting to get silly (extra tech or not).

Your issue appears to be U.K. wages are bad - welcome to 2010!

 

[Jono8]

Since when were car prices determined by wage increases in the U.K.


I think you’re missing a key point in that average people don’t buy new cars in cash. They finance them and up until very recently, new cars have never been as accessible. They actually getting more accessible again, you can get in a brand new car for a few hundred a month again.


Your issue appears to be U.K. wages are bad - welcome to 2010!

Well, yeh because gauging the price of anything has to be relative to what people actually have/earn, as well as past prices etc..

How do you determine whether something is expensive or not

What a bizarre argument.

 

[OldKitMan]

VAT was 17.5% (15% in Dec 2008 -> Dec 2009) and is 20% now. Not sure what import tariffs were around in 2008 as well. It's not just inflation (but I think we've proven that already).

 

[b0rn2sk8]

There isn’t tariffs on EU produced cars, yet, which is most of the market.

It’s only really the electric stuff which is coming in from China and even with the tariff, it’s still cheaper to produce it over there.

 

[Nasher]

Everything has increased except for wages. Somehow that is the economy improving...

 

[[TW]Fox]

How is it a bogus argument?

Standards have been raised when it comes to safety and emissions, those things have a cost

You see similar progress in other product areas though and the same thing doesn't happen

Your current television is far more complex and capable than the one you bought in 2008 but probably cost you less money.

But if you want to, we can control for the effect of progress in car prices by picking a car that is still on sale today but has the same or lower specification than it did on release.

In 2021 a BMW M340i cost £49,110. The list price today of this same car, on the same platform, is £59,835. But this doesn't tell the whole story as the current version has had a number of standard specification items removed - an equivalent specification car to the 2021 version actually has a list price of £64,310 (but does now have electric seats which it didn't before).

Adjusted for inflation, that 2021 car would now be £58,950, about £5k less than it is currently selling for.

There is absolutely no question that many new car prices are increasing above inflation - and lets not forget that we've had 2 years of very high inflation so to be above even this really is quite significant.

What is interesting though is this is happening at the same time as depreciation is very much returning to the used car market. Not in the way it was before, but still significantly enough that the gap between new and used cars is getting bigger and bigger, which will eventually filter through to the pricing of these cars on finance.

 

[Adam]

I've been watching the market for sometime for a Kuga but with a specific requirements such as ST Line (including edition) 2018/2019, auto, 1.8 TDCI and the range of pricing is insane. I have seen examples ranging from £14k to over £20k. Who is buying these at the upper end? I can only assume buyers who need finance from a ford dealership.

 

[LowEndTorque]

Used cars that I am looking at have definitely dropped in prices, although they are another year older than they were before so makes sense. I am primarily looking at 3.0 diesels, and the luxury saloons have dropped in price, namely the XJ and the 7 series (2014 onwards). Estate cars have not really shown any strong depreciation, especially the A6 Avant, lovely car in S line but very overpriced when compared to the 5 series and E class estates. XFs are the cheapest in my search criteria.

Market is improving for good but some sellers (both private and trade) are not dropping the price and appear to be deluded still.

 

[Tykey]

My car, going by the prices of those on Ebay, may have dipped in value about 5% over the last year, it's a 2014 Golf R DSG. I don't mind, I didn't buy it to make money on it, bought it to serve me as transport which it has done very well.

 

[Richie]

I'm not sure why we are comparing the increase in prices of cars to average wages. Given its a measurable fact that wages have stagnated, its a poor metric to use. Are car manufacturers meant to stagnate their car prices specifically for the UK market?

Against inflation? Sure, that's better but you have to take into account a large portion of it is the import tariffs brought in by leaving the EU (where a large majority of cars for the UK market are produced)

 

[[TW]Fox]

a large portion of it is the import tariffs brought in by leaving the EU

How does that work then? There are no import tariffs on cars produced in Europe, so they can't make up a large proportion of the price rises.