Motoring "bubble"

Atlantic Dawn

Anyone see this article in the Independent yesterday, basically it's looking like there's a "bubble" coming in 2-3 years time there is going to be a big glut of used cars returning from PCP and flooding the market, makes sense as people may not be able to afford the fee to buy it outright when the plan comes to an end...

http://www.independent.ie/life/motoring/car-news/why-buyers-need-to-pay-heed-to-alert-on-finance-bubble-34602065.html

GM228

Atlantic Dawn wrote: »

Anyone see this article in the Independent yesterday, basically it's looking like there's a "bubble" coming in 2-3 years time there is going to be a big glut of used cars returning from PCP and flooding the market, makes sense as people may not be able to afford the fee to buy it outright when the plan comes to an end...

http://www.independent.ie/life/motoring/car-news/why-buyers-need-to-pay-heed-to-alert-on-finance-bubble-34602065.html

First the Celtic Tiger died and burst the property bubble and now the Celtic Jaguar is ready to blow a piston....

Who will be to blame?

smash

Won't do any harm considering it looks like there's a brexit on the cards so people won't be importing from the uk again.

everlast75

smash wrote: »

Won't do any harm considering it looks like there's a brexit on the cards so people won't be importing from the uk again.

There are 3 options available at the end of PCP
1) pay the balance and keep the car
2) trade in the car and get a new one
3) hand the car back

2 and 3 are viable options. If you want the first option, you can take out a loan and pay off the balance over a couple of years. You still have the benefit of 0% finance for 3 years!!

smash

everlast75 wrote: »

There are 3 options available at the end of PCP
1) pay the balance and keep the car
2) trade in the car and get a new one
3) hand the car back

2 and 3 are viable options. If you want the first option, you can take out a loan and pay off the balance over a couple of years. You still have the benefit of 0% finance for 3 years!!

But I'm talking about the need for second hand cars in the market.

dr.fuzzenstein

Will all be sorted when insurance companies will refuse anything over 10 years. New car €40k, 8 years old, worthless. 10 years old, scrap.
We will all drive Perodua Nippas, because only very few people would be able to spend €60k on a new Beemer that will be near worthless in less than a decade.

shietpilot

dr.fuzzenstein wrote: »

Will all be sorted when insurance companies will refuse anything over 10 years. New car €40k, 8 years old, worthless. 10 years old, scrap.
We will all drive Perodua Nippas, because only very few people would be able to spend €60k on a new Beemer that will be near worthless in less than a decade.

How many people would buy a new car once it turns 10 years old though? I think everyone would just drive uninsured.

Jakey Rolling

This may well be a problem for those with PCPs (and I include myself).

Now that the new car market is returning to more normal levels, there will be more 2nd hand cars on the market and the currently elevated prices for 2nd hand cars will most likely drop.

My dealer was very optimistic regards the trade in value of my PCP car in 3 years time. According to his reckoning, the equity left in my car (above GMFV) would mean I have the same deposit available for my next purchase.

I'm well aware that as the resale value of my car drops, I could be stuck in a hole, with little or no equity left. I just wonder how many others on PCP deals realise this. Some seem to think that the GMFV is their deposit for the next car, not what you have to pay the dealer!

colm_mcm

Just to do some rough sums.

Say a new diesel mid spec Golf is 27k
GMFV is roughly 9k
Assume a new golf is 27k in 3 years time and that it's 0% interest
Deposit is 9k I assume?
So car would have to be worth €18k in 3 years to keep PCP rate the same (assuming 0% APR on the next one too)

Is that about right?

Atlantic Dawn

colm_mcm wrote: »

Just to do some rough sums.

Say a new diesel mid spec Golf is 27k
GMFV is roughly 9k
Assume a new golf is 27k in 3 years time and that it's 0% interest
Deposit is 9k I assume?
So car would have to be worth €18k in 3 years to keep PCP rate the same (assuming 0% APR on the next one too)

Is that about right?

I think that's about right but if there's thousands of cars hitting the market at the same time at €18k or whatever around that the demand is unlikely to be there to find a standard 2nd hand market for them. I suppose a 2nd tier PCP could work where the next owner gets a PCP deal at say €5/6k deposit, then whatever monthly payments and a GMFV of €5/6k at the end.

bazz26

In 3 years time you will have the Mk8 Golf on the road so that will harm resale values of current models a bit also.

goochy

It will be more worrying for banks if they are left with loads of cars to sell off at much less prices than they predicted when doing Pcp deals

Drummerboy08

The market is sustainable at around 150,000 cars per year.

Remember that there is a huge shortage of used vehicles at the moment also so that market will also even itself out.

But sure a bit of scaremongering never hurt I suppose.

colm_mcm

goochy wrote: »

It will be more worrying for banks if they are left with loads of cars to sell off at much less prices than they predicted when doing Pcp deals

Plenty takers for 3 year old cars at 30% of original price.

OldMrBrennan83

This post has been deleted.

R.O.R

I'm pretty sure there is a fall off of used car values coming, but there's differing views on how severe it will be. Hopefully it's only a slight decline due to higher availability, but with sterling coming back in line with the Euro and more used stock available it could be a severe decline.

It's not going to be a crash like we saw end of 2008 / early 2009, but everything is pointing towards a softening of used values.

Damien360

R.O.R wrote: »

It's not going to be a crash like we saw end of 2008 / early 2009, but everything is pointing towards a softening of used values.

Ah yes, the mythical soft landing........

ShadowHearth

That was already mentioned in pcp thread. And honestly, I think there will ne bubble and crash.

Right now all 1-3 year old cars are artificially kept on high price to make pcp look a lot better. For God sakes all dealers are saying to people who come to look at them to go with brand new pcp. The value of pcp is good now, but not because it's good deal, but because second hand car prices are terrible in comparison.
It's house mortgage 101 again. They giving pcp to everyone. Specially to those who have their own cars to trade in now with very little money go with it. On top with no savings put away for the time when you will need to give that car back and take new one.
In 3 years there won't be any value left for new cars trade in and nothing to trade in this time, no savings too.
I can already see in next few years threads popping up " those evil dealer bastards! They lied to me!!"

inforfun

I am more concerned about getting my hands on a 7 or 8 year old car at one point that isnt a ****ing diesel.
Car sales collapsed when the economy took a nose dive and whatever was sold, was diesel.

NIMAN

inforfun wrote: »

I am more concerned about getting my hands on a 7 or 8 year old car at one point that isnt a ****ing diesel.
Car sales collapsed when the economy took a nose dive and whatever was sold, was diesel.

Import might be the better option?

inforfun

NIMAN wrote: »

Import might be the better option?

Maybe.
Just too lazy for that much hassle.

I consider waking up already a lot of hassle on weekdays so be careful with "it isnt that much hassle"

John T Carroll

shietpilot wrote: »

How many people would buy a new car once it turns 10 years old though? I think everyone would just drive uninsured.

Its a disgrace in my opinion that a > 10 year old car should be refused insurance, any car even built well over 15 years ago has ABS brakes etc, all cars > 10 old years are required have a yearly NCT. Statacians claim that old cars are involved in more accidents which seems a bit strange, if so then the NCT must be a waste of time?, I have always found the NCT to be pretty thorough. I also wonder why would manufacturers build cars with bodies that can and do last for +20 years with no rust problems, maybe we should return to the "Tinworm" days when it was quite common to see holes appearing in the body work after only 3 or 4 years. I regularly drive a car thats is in its 17th year and it only failed the NCT for the first time last November on a high lambda reading, I know I'm probably biased but this car drives as good as any 5 year old, obviously it has been well maintained, shocks, tyres, track rod ends etc which will show up in the NCT anyway even if one wasnt inclined to change them.

smash

smash wrote: »

Won't do any harm considering it looks like there's a brexit on the cards so people won't be importing from the uk again.

Doubt the brexit will materialise

Nody

John T Carroll wrote: »

Its a disgrace in my opinion that a > 10 year old car should be refused insurance, any car even built well over 15 years ago has ABS brakes etc, all cars > 10 old years are required have a yearly NCT. Statacians claim that old cars are involved in more accidents which seems a bit strange, if so then the NCT must be a waste of time?

Only if you assume there is a correlation between NCT and insurance claims.

I have always found the NCT to be pretty thorough.

It's been shown several times how NCT means pretty much nothing in reality from a group of people having one set of tyres shared all around to bring into NCT for testing to cars sold with NCT having complete engine failures.

I regularly drive a car thats is in its 17th year and it only failed the NCT for the first time last November on a high lambda reading, I know I'm probably biased but this car drives as good as any 5 year old, obviously it has been well maintained, shocks, tyres, track rod ends etc which will show up in the NCT anyway even if one wasnt inclined to change them.

No probably about it; the simple fact is your average car owner does not take really take good care of their cars (see the discussion on always buying cheapest tires, no oil changes etc.). Even so the point of the cut off being 50% of accidents (great majority probably faked) involve older cars because they cost next to nothing to buy and crash with and since the Irish legal system is tilted in favour of the people having an "accident" even if caught lying this is the insurance companies attempt to at least limit the faked up claims losses (it is at best a temporary stop gap for obvious reasons but I guess it's a case of better something than nothing).

carsfan

The price of nearly new, one or two year old cars is crazy here at the moment in my opinion.
Some of this is supply but I think some of it is designed to move you into the new car. Why buy the one year old car when the brand new one is 4 grand more and available at much more attractive finance rates?
In the past, I would always have looked to buy cars that were a year to eighteen months old and would typically save about twenty to thirty percent of the new price. This is impossible now.
I would like to think Irish people are not gullible enough to be thinking that pcp is more than what it is, however I can predict Joe Duffy listening to the moanings of some who will feel they were duped and didn't realise they wouldn't own the car or now have to put more money in to roll over their pcp because their car has lost so much value due to a glut in the market.
The bright side of it is that good three year old cars should be more readily available.

NIMAN

carsfan wrote: »

The price of nearly new, one or two year old cars is crazy here at the moment in my opinion.
Some of this is supply but I think some of it is designed to move you into the new car. Why buy the one year old car when the brand new one is 4 grand more and available at much more attractive finance rates?
In the past, I would always have looked to buy cars that were a year to eighteen months old and would typically save about twenty to thirty percent of the new price. This is impossible now.
I would like to think Irish people are not gullible enough to be thinking that pcp is more than what it is, however I can predict Joe Duffy listening to the moanings of some who will feel they were duped and didn't realise they wouldn't own the car or now have to put more money in to roll over their pcp because their car has lost so much value due to a glut in the market.
The bright side of it is that good three year old cars should be more readily available.

There are a lot of stupid people out there, who simply think "give me the dotted line to sign on ...".

The very same type of people who signed for a mortgage and were told their house would be in danger if they did not keep up repayments on it.

screamer

There will be a glut of cars because the amount of 161 cars on the road and people cannot afford them is staggering. PCP repayments are artificially low, and I think a lot of people will give them up at the end of the 3 years as they won't be able to keep up the finance on them.

TBH, I think that a case needs to be taken against insurance companies.
Cars in Ireland cost too much to have 0 residual value after 10 years.
They are already refusing to insure 10 year old cars. This will have a huge knock on effect on all cars, as who is going to pay 20K for a 5 year old car to have 5 years use out of it, pay all that money back with interest and have something sitting in the yard they have to pay to get rid of.

I predict that Ireland will turn into a nation of car renters via HP/ PCP instead of car owners. In the long run, you'd be as well off, with no NCT to pay for, maintenance costs reduced, and with no chance of getting your money back out of a car you buy, it's the only option that makes sense. HP/ PCP a car and give it back under the half way or 3 year rule. You'll have no residual value anyways, or indeed, if you do it'll be a lot less as the useable lifespan of the car is reduced, a buyer won't be willing to give big money for second hand cars.
Either that, or we'll all be driving Dacias.

This is a complete disgrace, but in the long run it'll bite the dealers in the ass.

John T Carroll

screamer wrote: »

There will be a glut of cars because the amount of 161 cars on the road and people cannot afford them is staggering. PCP repayments are artificially low, and I think a lot of people will give them up at the end of the 3 years as they won't be able to keep up the finance on them.

TBH, I think that a case needs to be taken against insurance companies.
Cars in Ireland cost too much to have 0 residual value after 10 years.
They are already refusing to insure 10 year old cars. This will have a huge knock on effect on all cars, as who is going to pay 20K for a 5 year old car to have 5 years use out of it, pay all that money back with interest and have something sitting in the yard they have to pay to get rid of.

I predict that Ireland will turn into a nation of car renters via HP/ PCP instead of car owners. In the long run, you'd be as well off, with no NCT to pay for, maintenance costs reduced, and with no chance of getting your money back out of a car you buy, it's the only option that makes sense. HP/ PCP a car and give it back under the half way or 3 year rule. You'll have no residual value anyways, or indeed, if you do it'll be a lot less as the useable lifespan of the car is reduced, a buyer won't be willing to give big money for second hand cars.
Either that, or we'll all be driving Dacias.

This is a complete disgrace, but in the long run it'll bite the dealers in the ass.

A car is possibly the second most expensive item that people buy after a house, I don't think people would be too happy if their house became obsolete after 10 years.

Alanstrainor

The Tuscon will end up being a very cheap car in a few years seeing the amount of new ones about at the moment...

bazz26

I don't know about that, the Tucson is where the Qashqai used to be a year or two ago. Used prices are still pretty strong.

ongarite

Anyone have a breakdown of Q1 sales by car make?
They released today the total Q1 sales with a breakdown by manufacturer with VW top.
http://www.rte.ie/news/business/2016/0408/780389-cso-car-sales/

colm_mcm

Toyota were saying they were number 1 for the quarter.
Wonder if that includes commercials too?

Eric Cartman

Gluts of 2nd hand golfs, passats, dustpans and similar poverty spec cars , most likely in silver for years to come.

Anything a bit special, petrol or loaded with options will still be rare.

colm_mcm

colm_mcm

colm_mcm

Atlantic Dawn

The Tucson figures are incredible.

drunkmonkey

UK top 10 for comparison:
http://www.carbuyer.co.uk/reviews/recommended/best-selling-cars

Germany by Brand, you can tell they've more money
http://www.best-selling-cars.com/germany/2016-q1-germany-best-selling-car-brands-models/

colm_mcm

Atlantic Dawn wrote: »

The Tucson figures are incredible.

They were giving them away sure.

Alanstrainor

drunkmonkey wrote: »

UK top 10 for comparison:
http://www.carbuyer.co.uk/reviews/recommended/best-selling-cars

Germany by Brand, you can tell they've more money
http://www.best-selling-cars.com/germany/2016-q1-germany-best-selling-car-brands-models/

I wonder how much brand loyalty is playing into this... VW, Mercedes, BMW and Audi, Opel all in top five in Germany (All originally German marques). And Vauxhall making up a big share of the UK.

veetwin

drunkmonkey wrote: »

Germany by Brand, you can tell they've more money
http://www.best-selling-cars.com/germany/2016-q1-germany-best-selling-car-brands-models/

Or they pay way less vehicle/registration taxes meaning cars are much cheaper.

R.O.R

colm_mcm wrote: »

Toyota were saying they were number 1 for the quarter.
Wonder if that includes commercials too?

Ford were claiming they were number 1 overall for March and Q1, in their newsletter this week.

Special Circumstances

Huraw for instantaneous statistics. .. someone was hitting f5 way too often somewhere in ballinascarty.

jimgoose

But... but... isn't d'Economy recovering, so everyone buys new cars wth wheelbarrows full of money? Don't tell me it's yet another Ponzi scheme, only with number-plate-carriers instead of semi-Ds in Mullingar??

colm_mcm

jimgoose wrote: »

But... but... isn't d'Economy recovering, so everyone buys new cars wth wheelbarrows full of money? Don't tell me it's yet another Ponzi scheme, only with number-plate-carriers instead of semi-Ds in Mullingar??

My favourite was the buy a house in borris on ossory and get a free Volvo S40 1.6d deal

My favourite was the buy a house in alderwood and get a free Volvo C30 deal

jimgoose

colm_mcm wrote: »

My favourite was the buy a house in borris on ossory and get a free Volvo S40 1.6d deal

Put de bob in me fisht, Sergeant!

colm_mcm

Had to google it, turns out I had the details a little wrong!


Google street view shows no Volvo C30s there lately!

jimgoose

colm_mcm wrote: »

Had to google it, turns out I had the details a little wrong!


Google street view shows no Volvo C30s there lately!

Indeed. It's Borris-In-Ossory, BTW, not "on". For bonus points, name the other three Borrises, and the five places in Dublin ending with "O"!

monkeysnapper

I know a feller that couldn't,t get a 10 k loan to buy a car, he's unemployed and wife works part time, they have a loan already on a 131 car . They are expecting their 2nd child so he goes to skoda dealer and they throw a 161 brand new yolk at him .

I asked him how the hell did you get loan for it , he couldn't believe it either , they told me it's simple, if I don,t keep up repayments they will just come and collect it . He said I can just hand it back in 3 years .

I'm staggered by it . It all sounds depressing to me .

My little 2006 car I bought is like brand new, show room condition , drives like a dream, picked it up for 2k . Or maybe I'm just full of Sh1te myself

Captain Chaos

The problem I see is with all the diesels, 7 out of 10 new cars sold this year were diesels. The second hand market is flooded with them too. Depressing, and even more so in a few years when they are all being flogged off, I wouldn't touch a diesel with a barge pole.

colm_mcm

jimgoose wrote: »

Indeed. It's Borris-In-Ossory, BTW, not "on". For bonus points, name the other three Borrises, and the five places in Dublin ending with "O"!

well there's borrisoleigh and borrisokane and does twomile borris count?

er. Marino Pimlico phibsboro
er

monto?


wait. rialto