[Finance] Used Car Prices

[Tim Over Whelmed]

As young OW approaches his 17th Birthday he wants to commence that well known rite of passage and buy a second hand car to sit on the drive and be polished every Sunday until he passes his test.

My thinking is they'll be literally thousands of new cars needing a home and the backside is going to fall out of the 2nd hand car market, potentially meaning some bargains are going to be had but prices, at the moment, won't reflect this.

Any NSC contributors in this sector that could shine a light for me?

 

[Springal]

Not that I am really an expert - but I guess the part of the market you'd be looking at for a first time driver is in the £1k-£4k bracket and probably won't see much impact here.

If you were looking at 'properly' second hand market of 2-4 year old cars then yes there could be bargains to be had at car auctions etc. The flip side is there is a huge back log of new build cars coming through and many leasing companies are letting people 'informally' extend their leases for 6-12 months at the moment which then dries up the second hand market a bit

 

[Tim Over Whelmed]

Not that I am really an expert - but I guess the part of the market you'd be looking at for a first time driver is in the £1k-£4k bracket and probably won't see much impact here.

If you were looking at 'properly' second hand market of 2-4 year old cars then yes there could be bargains to be had at car auctions etc. The flip side is there is a huge back log of new build cars coming through and many leasing companies are letting people 'informally' extend their leases for 6-12 months at the moment which then dries up the second hand market a bit

Thanks for this, yes we thought 6 year old Focus, Astra type car, £3-6k, I'm now thinking that a nearly new £12k may be as low as £7-8k if the market crashes, either way now is not the time to buy and leave it until showrooms start to open and the competition and impact is there?

 

[nwgull]

Why do you think the prices of 2nd hand cars would drop significantly?

 

[johnjim]

At your son’s age, it’s all about the cost of insurance. look at the insurance group tables and work from there. Don’t be conned by dealers who say “ I think this is fairly low on insurance “.
VW fox and Fiat pandas , are not only very low group insurance but also good if your son is very tall like my 6”5” one was at that age. Not the most fashionable of cars, but nice animal names and will get you through the first couple of expensive insurance years, which incidentally does a huge upward jump when they pass their test.

 

[AIT76]

Both my kids have recently passed their tests, and both my kids have damaged their cars. Nothing major, and as both were sub £1000 shitboxes, no real harm done. Lesson learnt, move on and get these mistakes out the way before upgrading to something shinier.

 

[Tim Over Whelmed]

Why do you think the prices of 2nd hand cars would drop significantly?

A report stated the numbers of brand new cars sitting in docks and abandoned airfields used as overflow. Stating that many of these were already registered and will therefore either need to be sold or drop in value?

If there's a drop in new car prices I'd imagine it'll have a significant impact on 2nd hand prices, couple this with household incomes dropping and people losing their jobs and there may be a flood of already used cars needing to be sold as people rationalise, i.e. from two car household to one etc.

I'm not saying it will, I'm saying will it?

 

[Tim Over Whelmed]

At your son’s age, it’s all about the cost of insurance. look at the insurance group tables and work from there. Don’t be conned by dealers who say “ I think this is fairly low on insurance “.
VW fox and Fiat pandas , are not only very low group insurance but also good if your son is very tall like my 6”5” one was at that age. Not the most fashionable of cars, but nice animal names and will get you through the first couple of expensive insurance years, which incidentally does a huge upward jump when they pass their test.

Thank you, they, like me, were born with their arses low to the ground, around 5' 7", so most cars OK.

 

[Stat Brother]

Both my kids have recently passed their tests, and both my kids have damaged their cars. Nothing major, and as both were sub £1000 shitboxes, no real harm done. Lesson learnt, move on and get these mistakes out the way before upgrading to something shinier.

and if you want a sub £1000 shitbox contact Jacob at JC Tyres, almost next to Bognor Picturefrome and ask what stock he's trying to flip.

https://jcxtyres.com/

 

[WATFORD zero]

Thanks for this, yes we thought 6 year old Focus, Astra type car, £3-6k, I'm now thinking that a nearly new £12k may be as low as £7-8k if the market crashes, either way now is not the time to buy and leave it until showrooms start to open and the competition and impact is there?

I would advise not spending more than about £1500 for a first car. Something a few years old, 50-60K mileish with a service history and look to keep for a couple of years. They are likely to put a dent/scratch or two on it in the first couple of years, the insurance will be less, and since it's their first car, they will love it and look back on it with fondness no matter how much of a shitheap it is

Once they have a couple of years experience of driving, a couple of years no claims, and a couple of years experience of the shock of denting things, then get them something better

 

[nwgull]

A report stated the numbers of brand new cars sitting in docks and abandoned airfields used as overflow. Stating that many of these were already registered and will therefore either need to be sold or drop in value?

If there's a drop in new car prices I'd imagine it'll have a significant impact on 2nd hand prices, couple this with household incomes dropping and people losing their jobs and there may be a flood of already used cars needing to be sold as people rationalise, i.e. from two car household to one etc.

I'm not saying it will, I'm saying will it?

That makes sense; although I'm not sure it'll have quite the impact you're hoping for with 30-30% reductions. There are going to be fewer second hand cars on the market until things normalise a bit as people less likely to buy a new car in the uncertainty and cars aren't being built at the moment.

 

[wellquickwoody]

Secondhand market will suffer at the top end in the short term. Six months from now it will be rock solid.

 

[MJsGhost]

At your son’s age, it’s all about the cost of insurance. look at the insurance group tables and work from there. Don’t be conned by dealers who say “ I think this is fairly low on insurance “.
VW fox and Fiat pandas , are not only very low group insurance but also good if your son is very tall like my 6”5” one was at that age. Not the most fashionable of cars, but nice animal names and will get you through the first couple of expensive insurance years, which incidentally does a huge upward jump when they pass their test.

Both my kids have recently passed their tests, and both my kids have damaged their cars. Nothing major, and as both were sub £1000 shitboxes, no real harm done. Lesson learnt, move on and get these mistakes out the way before upgrading to something shinier.

I would advise not spending more than about £1500 for a first car. Something a few years old, 50-60K mileish with a service history and look to keep for a couple of years. They are likely to put a dent/scratch or two on it in the first couple of years, the insurance will be less, and since it's their first car, they will love it and look back on it with fondness no matter how much of a shitheap it is

Once they have a couple of years experience of driving, a couple of years no claims, and a couple of years experience of the shock of denting things, then get them something better

THESE!

Anything else and you are denying junior a classic rite of passage.

Modern cars spoil some of the fun anyway - knowing how to nurdle the choke ‘just so’ to get my old Fiat Uno moving was better than any modern immobiliser

 

[Springal]

A report stated the numbers of brand new cars sitting in docks and abandoned airfields used as overflow. Stating that many of these were already registered and will therefore either need to be sold or drop in value?

If there's a drop in new car prices I'd imagine it'll have a significant impact on 2nd hand prices, couple this with household incomes dropping and people losing their jobs and there may be a flood of already used cars needing to be sold as people rationalise, i.e. from two car household to one etc.

I'm not saying it will, I'm saying will it?

Personally the level you are looking at I don't think there will be much of a reduction - but if you aren't in a rush worth waiting to see what happens.

 

[beorhthelm]

just as people arent buying, they arent selling either, so not much price movement.

 

[phoenix]

Both my kids have recently passed their tests, and both my kids have damaged their cars. Nothing major, and as both were sub £1000 shitboxes, no real harm done. Lesson learnt, move on and get these mistakes out the way before upgrading to something shinier.

Spot on ! My Daughter wouldn't have damaged her car if the wall wasn't there

 

[wehatepalace]

2nd hand market didn’t drop in the last recession and I doubt will this time round.
We found people hold onto their cars for a bit longer and actually if anything 2nd hand prices went up due to a lack of cars.
Our used car salesman has sold 15 in the last 2 weeks and can’t get new stock in quick enough !

 

[zefarelly]

2nd hand market didn’t drop in the last recession and I doubt will this time round.
We found people hold onto their cars for a bit longer and actually if anything 2nd hand prices went up due to a lack of cars.
Our used car salesman has sold 15 in the last 2 weeks and can’t get new stock in quick enough !

you have your own salesman? how many cars do you get through ?

 

[Icy Gull]

I would advise not spending more than about £1500 for a first car. Something a few years old, 50-60K mileish with a service history and look to keep for a couple of years. They are likely to put a dent/scratch or two on it in the first couple of years, the insurance will be less, and since it's their first car, they will love it and look back on it with fondness no matter how much of a shitheap it is

Once they have a couple of years experience of driving, a couple of years no claims, and a couple of years experience of the shock of denting things, then get them something better

How many cars are you intending to buy your kids? We bought ours their first car, after that they had to buy their own. Didn’t mind funding the insurance but not a string of cars!

On topic people will continue to crucify themselves on credit to have a status symbol car imo. I don’t see prices dropping too much.

 

[WATFORD zero]

How many cars are you intending to buy your kids? We bought ours their first car, after that they had to buy their own. Didn’t mind funding the insurance but not a string of cars!

On topic people will continue to crucify themselves on credit to have a status symbol car imo. I don’t see prices dropping too much.

I didn't buy either of my kids cars, I'm far too tight for that. I 'helped them' decide how to spend their money from their part time college/uni jobs. I may have helped a little with the purchase and insurance but I thought that if they had to work for it, they may be a little more careful when they drove it.

My son even MADE money on his when he sold it a year later. Can't imagine where he gets it from

*edit*

And agree completely with the credit thing. If you haven't got the money to pay for it, then you can't afford it