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Used car bubble?

  • 03-11-2021 5:12am
    Registered Users Posts: 3,028 ✭✭✭ Lantus

    Used car prices are up a staggering 50pc since a year ago. These kinds of rapid market changes generally will correct so should we hold off buying unless absolutely necessary?

    In as little as a year supply of new cars could be flowing strongly and leave a lot of people with a lot of negative equity in their once overpriced cars.

    Coupled with this we are moving closer to the likley pivot point around 2025 or 2026 where ev sales globally will likley match ice sales and then rapidly surpass them in the next few years.

    A good time to limit risk exposure and save like crazy for 3 to 4 years before moving to ev when cheaper and wider models will be available.

    What are other people's thoughts?



  • Registered Users Posts: 578 ✭✭✭ eusap

    As with always buying a car its not the price of the car its the cost to change that you should look at. If you dont have a car today and want to buy one you are going to pay a premium and be left in negative equity. If you have a car to trade the value of this car has increased so the cost to change to a next car should be equal.

    My example i bought a 2014 Passat for 12k 4 years ago, on Saturday got offered 10k as a trade in, the price of the 2016 one has gone up but the gap is still only 4-5k

  • Registered Users Posts: 3,028 ✭✭✭ Lantus

    I think the demand is there but it doesn't have depth. Once the initial wave is satisfied it could quickly drop away. Fizzle out effect.

    I would also have bought another ice. I still might but it would be a much cheaper no frills car by necessity only now before ev transition which I am saving for in 3 to 4 years time. I am holding off.

    Chinese EVs are coming. 3rd gen, highly developed and good quality cars for very competitive prices and profitable. Tesla also in this bracket. Versus the 1st gen prototypes of the legacy car makers. The gap is quite staggering. Some like vw should turn it around to compete if they can modernise and shed staff but many are very late to the party and I can see some household names like ford becoming tiny players or disappearing.

    The current bubble in prices has the potential to exaggerate the losses to individuals in coming years.

    And are fuel prices going to stabilise. Every few days the price changes up again. 1.71 for unl. And 1.65 diesel. It's unreal. 70 vs 48 now to fill the octavia!! And I'm lucky I don't need to commute after changing jobs. Heart goes out to those trekking 100km a day there and back.

  • Registered Users Posts: 1,349 ✭✭✭ traco

    Its interesting to watch. I take a position with my daily and thats drive it till it dies. Currently 340k kms ish om it and plan to carry on as is. Hopefully it will keep going until their is a used EV that will meet my needs and be in budget. My next daily could even be a van as its only me in it 98% of the time and as its an estate I treat it as a van but a van would offer even more flexibility for biking, hiking and other such lifestyle activities.

    I have two "toy cars" and would watch that sector a little more closely. Some things are moving very quick and other stuff is hanging around. Its very hard to asses as with the UK closed off as a supply for second hand options it seems like the current stock is all thats available and when the right car appears its snapped up.

    I see no shortage of used cars on forecourts around the country and windsor auctions has a load in the yard in Naas. There is a shortage of new cars to be fair but a car is easily a purchase that can be deferred so I can't see the logic behind the price madness of what I would consider daily drivers?

  • Registered Users Posts: 50,203 ✭✭✭✭ bazz26

    There certainly is a shortage of good used stock out there in my observation. I've seen a good few large dealer forecourts down my way that would normally be full of trade ins, noticeably emptier now. I've also seen used cars selling before the dealer even has a chance to take photos and post them online. People buying without even seeing the car too. Prices have certainly increased a lot in the last 12 months too, people selling their existing cars for more than they paid for them, of course this is offset by the increased price of the car that replaces it.

    There is certainly a bubble at the moment and nobody knows how long it will last but like the property market during the celtic tiger we know it will burst and I have a feeling people paying over the top for cars now may get a nasty shock when it does burst.

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  • Registered Users Posts: 2,297 ✭✭✭ sk8board

    its just that a lack of supply is pushing up prices. I’ve heard just last week that the prices are already starting to come back - most 12month old cars are selling above the list price of a new one, and that won’t happen for long.

    its not a good time to be buying a nearly new car.

    carzone listings are down around 27k, when the normal market would be over 40-42k.

    it’ll all reset in the next 12 months, simply because cars aren’t an appreciating asset, and that will right itself soon :)

  • Registered Users Posts: 522 ✭✭✭ Squeaksoutloud

    Whatever about the short term supply chain issues, Brexit will still restrict supply and keep second hand values at a higher level than we have been used to. New cars kept for a long time will be the order of the day.

  • Registered Users Posts: 1,349 ✭✭✭ traco

    I regularly see a car transporter on the M50 on a Thursday or Friday morning with UK cars.

    If you are buying fresh and its ex lease then its VAT qualifying so should be export ex the UK VAT element. Granted you may still have the duty depending on the model and you pay the 23% vat here. Granted its a lot more hassle but still doable and I would say there are still savings to be had but you are at the upper end of the market to justify the effort.

  • Registered Users Posts: 2,297 ✭✭✭ sk8board

    UK used cars are getting priced closer to what we’re paying here, so importing to Ireland is doubly more expensive since the brexit rule changes. They have a lot of control over their new car supply, with domestic manufacturing, so It’ll be interesting to see medium term what happens - will it stay down because of brexit, or bounce back when supply chain issues are rectified

  • Registered Users Posts: 19,231 ✭✭✭✭ Muahahaha

     I've also seen used cars selling before the dealer even has a chance to take photos and post them online. People buying without even seeing the car too.

    Anecdotal I know but Im in the market for a winter runaround and was hoping to get a 2007/8 Yaris in the private market. In the last two weeks Ive missed out on four of them that all sold in less than 48 hours. The latest being today was the most frantic where the seller put the ad up on DD at 10am and it was sold when I rang at 3pm, people are just snapping them up ASAP. Also since that article in the OP was published saying prices have risen 50% in the last 12 months Ive noticed dealers that were asking 2,500 for a 2007/8 Yaris are now asking 2,950 just in the last two weeks. I still cant get my head around paying 3k for a 14 year old car but that is the current market.

    Thinking of looking for a 2008 1.2 Skoda Fabia now instead, anyone know if they are considered reliable and have longevity? Will probably be buying it with around 150,000kms on it

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  • Registered Users Posts: 2,574 ✭✭✭ HBC08

    Not one Skoda Fabia on DD meets that criteria.Theres 4 or 5 under that milage but are 2009s and 2010 ranging from €3500 to €4900.

    Matches your criteria the best,I don't know anything about them in general.

  • Registered Users Posts: 3,028 ✭✭✭ Lantus

    Yeah the nearly new cars are a real issue as you are overpaying when it should be the biggest drop in price after 1 to 2 years depreciation.

    I can't say if it will correct after 12 months. My feeling is the growth in EVs over the next 4 to 8 years will just devalue ice cars as sales drop off.

  • Registered Users Posts: 19,231 ✭✭✭✭ Muahahaha

    What about Japanese supply or is the typical Irish car buyer turned off by Jap imports?

    Also is it still the case that you can import from Northern Ireland and only be liable for VRT but not VAT given they are still in the single market?

  • Registered Users Posts: 2,574 ✭✭✭ HBC08

    Yes you can but high demand from down south means any value in doing this is practically gone.

  • Registered Users Posts: 19,231 ✭✭✭✭ Muahahaha

    Do you know have prices in the north risen substantially as well due to the extra demand? I presume they have, we have basically gone from a used car supply market of 60m people in the UK down to just 1.7m in Northern Ireland.

    But also wouldnt it mean that dealers in NI can massively expand their operations now given that it is a back door to get cars from the UK without VAT being slapped on them? Or maybe it is the case that the average buyer just cant be bothered to go through the VRT hoops and will gladly pay more for cars in the market here.

  • Registered Users Posts: 6,156 ✭✭✭ ebbsy

    Kildare has gone mad.

    I get my cars in Wicklow now, esp. Bray

  • Registered Users Posts: 5,005 ✭✭✭ ofcork

    New car prices are nuts,toyota sent me a brochure over 29k otr for a corolla now!!!

  • Registered Users Posts: 13,508 ✭✭✭✭ Fr Tod Umptious

    I have an 2004 Fiesta that I bought for €800 in July 2019 (taxed and new NCT at the time) sitting outside since March 2020, since I have been WFH.

    Out of tax, out of NCT, flat battery, same half tank of petrol in it since March 2020.

    Has it gone up in value ?

  • Registered Users Posts: 2,500 ✭✭✭ Car99

  • Posts: 8,860 ✭✭✭ Harper Unsightly Mullet

    I think the “bubble” will last a while longer for the following reasons:

    1. more people now either WFH full time or a blended approach of reduced office hours- mileage greatly reduced - whether this remains a permanent option long term remains to be seeing but in the short term people are hanging on to cars they would normally have sold/traded in for new/newer cars - if you’re unsure of future annual mileage why would you buy a new car right now if you’re current one meets your needs- especially in this over inflated price market
    2. I imagine there’s a huge hesitancy for many who might normally be buying new, to buy an ICE- especially in the 26k - 36k category - EVs don’t yet have the range required for many at this price point - but with fuel on the increase and a tipping point not far away which should bring better offerings of EVs in this price range, maybe they’re playing a waiting game

    Personally I think you’d be fine still buying an ICE today and getting normal resale values or even higher than normal resale values in 3 years time- the supply challenges would still only be settling down at that stage.

    If I were considering an EV it would only be a new EV- 2nd hand EVs scare me from a guarantee perspective especially if approaching the end of their battery guarantee - I’m sure that will change in years to come but that’s the way I feel right now. Range Vs price is definitely stopping me purchasing an EV- they’re just too expensive but absolutely they’re the way to go if you can afford them.

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  • Registered Users Posts: 2,147 ✭✭✭ koutoubia

    Dealers are starting to take the pis.s

    Spotted a car in a dealer in June for 10k.Not the most common of yokes and bordering on Luxobarge type territory.

    Did a cartell and the dealer has had it a few years.

    It dissappeared from the forecourt for a few weeks and has now reappeared with an extra two grand on the price.

    I mean they coudnt sell at a lower price ...what makes them think they will sell at a higher price.

  • Registered Users Posts: 1,358 ✭✭✭ rodge123

    If only everyone that doesn’t need to replace or buy used car could just hold on and not purchas, then prices would start coming down. Surely dealers would start to have cash flow issues if people refused to pay way over he odds.

    Wishfull thinking on my behalf as was hoping to replace the 22 year old focus soon!

    Looking at maybe a 3 year old e class coupe that I’d have expected to be around 35-40k but are around 50-55k!

  • Registered Users Posts: 2,574 ✭✭✭ HBC08

  • Registered Users Posts: 194 ✭✭ Zylias

    This is my thoughts regarding the used car bubble, particularly in 2021 having been in the industry for years and friends and family in the industry years, there is still massive value to be had but it seems to be moving to the main dealers and private market. A lot of buyers in this country have been used to going to any independent garage in the country who could get you virtually anything you wanted from the north for cheaper than main dealers could offer for similar spec, age and miles and them days are gone. Also, a lot of car rental companies return their leased cars at the start of spring and the end of autumn which causes a high supply to the market for you cars such as Clios/Meganes/Golfs/Focus/Qashqai/Tucson/i40/320D/A4 etc and due to shortage of supply they've kept their cars so your seeing prices staying the same rather than drop.

    2 instances of value with main dealers I can offer is helping someone buy a 2016 Citigo from main dealer was listed for 9500 got it for 8500 with no trade in and a bank draft as payment up front because I shopped around and the main dealer was confident enough in their pricing and they can offer you a good value back on a trade in 2/3 years down the line, I could have probably got a similar price from the private market but at that price point you should be going main dealer. All of the independent dealers we priced were north of the 10k mark for the same car with similar miles and offering no reduction in price. The value comes in extras you can get with the car i.e rubber floor mats/boot protectors and a free service etc.

    Also a friend bought a luxury brand car 55k+ and managed to get 2k off the list price with a great service pack and a few extra bits i.e mats and the like and that was with a trade in again at a main dealer.

    I found buying privately for the car I wanted this year and the spec I wanted to be very rewarding, it took a bit of time and patience and negiotating with the buyer to bring it to a main dealer for a full service and health check prior to sale and a fresh NCT for a 2014 car and I tried nearly every independent dealer I could find that had the car and they wouldn't budge on price, offered mapfre warranty (joke) and all had lower spec than what I was after. Main dealer were lower miles than I wanted initially but the price was far too high in my opinion.

    If someone is buying a car the only advice I can offer is shop around main dealers and get a feel for the market in terms of the car you want and actually be prepared to buy the car there and then. Gone are the days going into a dealer and starting your offer for a 25k car at 22k but you might get it for 24k with some servicing etc.

    Just my own two cents for what it's worth, people may disagree with me and that's fair enough

  • Registered Users Posts: 2,051 ✭✭✭ wassie

    Given the high prices for used cars at the moment, the real value to be had is selling privately resulting and buying new. A larger deposit can be acheived now than before Brexit & the Pandemic. Whilst new car prices have risen (along with little or no discounting), this is generally more than compensated for by the price obtained for a used car in reasonable condition.

  • Registered Users Posts: 2,574 ✭✭✭ HBC08

    If you're saying "there's still massive value to be had" then yes I think a lot of people will disagree with you.

  • Registered Users Posts: 2,574 ✭✭✭ HBC08

    Nearly 3 year old Mx5 ,31k

    Same spec brand new ,33k

    I know this is only one example (and that seller will get the 31k) but there's similar cases across the market.

  • Registered Users Posts: 29,972 ✭✭✭✭ NIMAN

    I was thinking of changing my 2014 EV, to another EV maybe up around the 2018 age group.

    But I got a shock when I seen the prices they were going for. As the current EV still satisfies my motoring needs, I think I'm going to hold off for a while.

  • Registered Users Posts: 411 ✭✭ ec_pc

    I also think the increased prices of new cars is reflected by greater trade in values for used cars and therefore a higher price for second hand cars on the forecourt. For example, the price of a new Sportage is creeping towards 40k, so therefore the Sorento takes a leap to well over 50k. Therefore much better value in a Sorento trade in. I have seen first hand a 2019 Sorento for sale for 43k, this car only cost 48K brand new, but I guess this used price can be charged as it's still 10k cheaper than a new Sorento. Is there logic there?

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  • Registered Users Posts: 2,297 ✭✭✭ sk8board

    there’s better value in brand new cars right now than in 1-3yo - and that’s saying something. a 1yo car is still barely below list.

    bear in mind that a garage making double or triple the margin on half the volume is probably not too fussed about the market right now.