It is not just finance rates, it is also the insurance premiums which have gone through the roof. Discussing with a couple of dealers the high finance costs are being offset by some manufacturers subsiding rates but the insurance costs are putting a lot of people off and prices have a long way to drop to get back to reality….anyone remember the ‘90s?
Im only 25 but as a car guy even i remember the 50 quid cars that are now asking £2500. I bought a mk5 Fiesta ZS last November for that £2500 price, a car that 3/4 years ago was a couple hundred. No idea whats gunna happen to those cars if prices crash.
Insurance is ridiculous, went up nearly 20% this renewal and that was after hunting down the best price. I do wonder if it is down to the increase in new car costs and the fact that repairs are much more complicated and expensive on new cars.
@@kevdoran9918shop around. My car insurance was 700 then I received automatic renewal of 2500. Needless to say I switched insurers and found one closer to the previous year.
You’re right Sam, new cars have become unaffordable for the majority of people but nobody seems to be asking WHY ??? If people stop paying these ridiculous prices, manufactures would be forced to drop their prices and charge what they are worth- not what they think they can get away with.😡
Manufacturers have started to price cars based on what is an 'affordable' monthly payment (as most people finance new cars these days). Many people don't look at the total cost of a new car as long as the repayments for a few years are affordable. Since interest rates have been increasing repayments have become less affordable, especially while many people are getting squeezed from other payments which are linked to interest rates (credit, debt, mortgage etc) also insurance. I can imagine many car manufacturers are going to find new car sales falling fast.
Don't worry when the Tesla Model 2 (or whatever it's called) reaches the market sometime next year, it'll bankrupt combustion manufactures. It's going to launch at around £22, 000, it'll disrupt the market totally
I was talking to a car dealer at the weekend at a wedding. He point blank refuses to take an electric car as part exchange or buy them used. His take is that no one wants to buy them used and the customers want unrealistic prices to sell them.
I know main dealers that will not take EVs back as well. If you’ve leased on at least you can hand it back at the end of the term. If you bought one you’ve got it for live. There are Zoe’s and leafs that have been on autotrader over a year.
I think Tony is spot on with what’s happening with consumers. As a cash buyer, pre the interest rate hikes, I was prepared to drop £75k on my next car. Now I’m sitting on the money and keeping what I’ve got. Interest I’m getting on capital is one part but the falling prices of cars is another.
Everything to be said for not sinking hard cash when the interest rates are getting better. Better than finance but that’s not the point. I’d you’re not used to finance then it seems a huge rip off.
One gets the sense that Tony is so excited and flattered to be asked about his specialist subject - the new/nearly new car market, that he feels the need to answer every question with something emphatic and interesting, even if either a. He doesn’t know the answer or b. There’s no emphatic or interesting truth to be told. Hence the confusing babble, regular contradictions and meandering, often inconclusive ‘explanations’. Commendable enthusiasm but please, Tony, it’s ok not to impress with every answer
Enjoyed the podcast 👍 Frightens me that the industry seems to have accepted £80k as a vanilla price for a car. Life seems to be getting more and more expensive!
Yes Cars have increased in value but so have running costs while wages have simply not, now you have mortgage / broadband / tv subscription / internet storage / health insurance and food to contend with and wages have not increased in many industries to keep up, simples
There is something Tony misses with the 20% interests on mortgages 60 years ago. Of course 20% is insane, but back then an average house would cost maybe 3 years of an average salary. Now the average house costs what, 20-25 years of an average income? So yeah. The old generations didn't have it more difficult.
So, you basically made a bad financial decision at the time? Firstly, a monthly INTEREST payment of 45% of your pretax salary. Surely that's unwise? And a bank would not allow that now. At least not here in Switzerland. Secondly, 100% mortgage? Again no bank would allow that now. The appreciation of your asset will have made up for it. But damn. I live and work in Zurich. Together with my wife we earn approx 3x the average swiss salary. Yet it's unthinkable to buy a property unless we go way out.
@@Swixperience 100% loan to value mortgages are now readily available in the UK; granted they were not widely advertised since the 2008 crash but they existed. Some lenders pre-crash would allow you to self-certify your earnings on a 110% LTV mortgage, that in a minor part was the advent of toxic debt which lead to the crash. So people spending 40+% of their take home net salary on a 100% mortgage is more common than you would think. Differing generations have differing issues; reality is that for the last 15 years people have become accustomed to ultra low interest rate borrowing which has then been the bedrock of the property prices and general cost of living that we all see today. But no one has budgeted for that period to be over as it is now. UK inflation is stubbornly high in part because plenty out there are still recouping their losses during the pandemic and buffering for a similar event. The pandemic was the reality stress test that most people avoided thinking about when they sign their mortgage and ignore the bit that says 'can you still afford this if interests rates were 3x/4x/5x higher?'. The part that differs now I'd suggest is that in the past it was your problem and yours to sort and if you didn't you were in real trouble with the risk of losing everything; now there is a sense of entitlement that the Government or someone else should step in to solve your problem because it's someone else fault and if not you can write it all off and start again. Same goes with car financing, the harsh reality of a consequence free attitude to debt and credit management that people now have. Sam touched on a point where his father would not borrow because he couldn't afford it, people now borrow to pay off other borrowing without any relation to whether they can afford it, such has been the ease in which credit has been dished out by the banks. Personally I'm now fortunate that I have one debt which is my mortgage yet from a banking / credit perspective I'm seen as a bad customer because I don't have debt! And houses in the UK were built better then than they are now in that there were less issues structural or finish wise but they weren't thermally efficient nor environmentally friendly!
@@v4skunk739 Not true, no insulation or double glazed windows and very few had much of a heating system or anything more than a basic bathroom and kitchen.
I bought my 12yr old car for £3600 cash, 3 yrs ago. There’s nothing wrong with it, and apart from routine maintenance costs me very little. I like it, and now that this particular model has been discontinued don’t really see anything else I like enough to replace it. It’s currently on 120k miles. I’ll keep it going until it’s no longer financially viable, then buy another model for a similar sum. I don’t see the point in splurging £300-£400 on a brand new car lease, especially as I dislike almost everything currently on sale new.
I agree with Sam. I was lucky enough to buy a new E46 M3 Convertible and it was £42,000. I cannot get my head around paying over £100,000 for a new M3/M4. Its gone mad. M2 at £77,000 what!
Blame PCP's for that. Low interest rates/PCP's has encouraged people to buy expensive 'premium product' which in the normal way could never be afforded. This has allowed the manufacturers to add all sorts of pointless crap on their cars and push prices through the roof which no one noticed, because they were paying £299/£399/£499 per month
£42k in 2001 is £75k today. The car has moved upmarket somewhat in that time with the M2 slotting in underneath that. But as has been pointed out, with most people buying cars on finance, the RRP of the car is less relevant because what you are really looking at is the monthly payment, which can be totally detached considering interest rates and depreciation.
@@adogmcdizzle RRP less relevant IF the interest rates are sensible - 10%+ APR changes the ball game considerably though, especially when coupled with a hugely inflated list price... !
@@Auto_Funk yes, you are correct. To add: demand has been part of it as well, since supply chains have been restricted and customer demand has been high, manufacturers want a bit of the action when dealer mark ups become greater.
It’s a very lopsided market for EV’s . Effectively only company car owners are buying them due to the tax incentives ( cheap tax / the ability to offset the car against corporation tax . Hence the large number of Taycans being purchased by powerfully built director types . The issues happen on the second hand market as there is weak demand from private buyers .
Tony has a little bit of a clue. Sam is a clueless posho: "my dad is super against borrowing money" !? Because it's so much easier to just inherit it when you're part of a major landowning family? Sam's Uncle is Anthony Fane, 16th Earl of Westmoreland. Not that he mentions it, for obvious reasons. Heaven help anyone who takes his advice seriously. At least there's one thing money can't buy: a decent head of hair.
@@Miz-ql3ho I'm a long way from broke. But I'll take salty. I watch car channels because I'm a petrolhead. British society is bedevilled by our wretched class system and unearned privilege. Sam Fane is an especially egregious example as he'd pretending to be a normal bloke. And now, back to Harry's Garage and Rory on Autotrader....
@@johnosullivan2017 no im not saying you are broke, merely suggesting you come across this way. Society may be broken but its upto yourself to pull yourself up, nobody will help you or me but ourselves. God bless and I’ll see you over there 💪
My mk1 Golf isnt compliant with ULEZ but its still totally free, A-reg cars from next year, and so on, the whole thing is a scam leading to road charging for everyone, happy days...
ULEZ is just another form of tax for consumers. Won’t actually help in reality. Short term prices will increase as people use the grant from the mayor to purchase new used cars. But not sure if it’ll be enough to take market back to 2021 levels
Absolutely brilliant podcast chat, both Sam and Tony are bang on, cost of living crisis and interest rate, Ulez changes effecting most people. I am struggling to survive and work full time, would like to change my car, but can't.
PCP/PCH pushed up new car prices, which in turn pushed up second hand prices. With higher interest rates now much higher and harder depreciation impacting guaranteed bond future value, PCP/PCHs will become more expensive and either sales will reduce, list prices may have to drop, or hidden dealer discounts may become more prevalent. Will be interesting to see what happens in reality. However, looks like cheaper cars in the near future 😊
the problem is only, for those of us who are at the lower end of the market, who had not become rich in the last two years; basically, if I could afford a ctr fk8, with all the living cost increases and the price increases, I simply cannot afford the new type R. If one could afford an rs3 4 years ago, if that said person's income is more or less the same, that person will not be able to afford the new rs3. This is true for higher price cars up to a point. So, it is true, if a person that had a new m3 since new, when the m3s were 65k, cannot afford 90-100k on a new one.., there's no problem as, the former client of a brand that had 100k cars a few years ago, which now are 130k, will say, alright.. my favourite brand got up in prices 30%+ so let's see what I can find at 100k? Like I have said, there are options for ppl to lvl down.. and brands can access higher income lvl clients.. so, all good on this part. The only ones who actually are hurt are ppl like me, the regular joe, for which a 30k gti clubsport and a 37k fk8 were pretty good deals but now, at 50k+ golf Rs and 50k+ type Rs, I find myself out priced by everything. Not even the valuable i30n is not that cheap anymore and also, most of the manufacturers have withdrew the affordable performance cars at this price point.. basically, there are no affordable performance cars. I don't feel that confident about the market changing because from a manufacturer perspective, it is really, really, really hard to turn that huge cargo ship on its toes. That's why the prices will not drop as much or as fast as we hope.. and even if they drop, they will drop on large volume cars..., nothing being remotely special or interesting to drive will ever come back down in price... and that's is because, at upper lvls, you can always find new clients(ferrari's tactic!(one of them), let's not forget that a 360 and an f430 were around 150k or less, while the current 296gtb is 250k to 300k)
Sam was correct in the last segment. Its not just about what you can afford, its about the value for money. And that is out of wack right now. A lot of money is sitting on the sidelines because the prices just don't make sense. Sam's example was good: "I want an M5, but now the M3 is priced like an M5. I'll just opt out altogether." In other words, its not that people won't spend £100K. It's that they wont spend it on something they think is actually worth £80K.
First time listener, at first I just thought cheeky cockneys, but I actually enjoyed it, and I learnt something about how dealers operate. I have subscribed for more.
One of your best shows guys, well done.❤ I track and follow cars for months and in recent times years before I pull the pin and haven’t financed a car for 20 plus years.. I always knew the prices would come back… and just ignore the BS and general public behaviour.
There's probably good reason why there are a lot of Taycans, Etrons and Teslas coming onto the market now. They were popular 3 years ago, as they are now. I'm just swapping my etron 55 for a Q8 etron 55 and my 56,000 mile, 3 year old launch edition sportback will be an excellent used buy for its new owner. No battery degradation to date (reliable 230 miles range), cheap to service, no road tax or congestion charge, cheap to "fuel" and a great long distance car.
Said to a few people recently talking about Taycan residuals. People piled into Taycan expecting GT product residuals or through cheap salary sacrifice lease deals and are now getting their fingers burned. The precedent of Range Rover Tony made is something I agree with. Historically if you look at 7 series, S class you used to take a Bath on them. Or even look at Panamera residuals, I have no idea why people expected to flip a big luxury saloon car or at least not loose their shirt. EV or not.
Really interesting episode! EV market crash is because of consumer lack of confidence and fleet dumping just means there will be an established lower price point for the used ev market. I just bought an 18month seat mii electric as a daily for just over 12k (which you couldn't get for less than 20k a year ago), the dealer gave me an insane 11k for my 15 year old edition 30 golf. Costs me 4p a mile to run instead of 22p a mile in the golf. I really don't see it depreciating much further over the next two years. It's become more affordable to buy an EV = more buyers = prices stable
52-53 mins in... Sam completely on the money and Tony either in denial or missing the point entirely... New cars are quite simply far too expensive (EV's being the worst offenders)... It's nothing to do with what people can or can't afford - They are simply way over priced....And I can't see this ever adjusting back down...
Firstly thanks to both for a great POD. I think Sam, Was correct in the last segment. New car prices have lost touch with reality recently, It seems they are trying to follow the housing model of never-ending price increases! The e46 m3 used to be £41k in 2003 twenty years later and m3 touring is £93k.! I always view the M3 a mid-level management car that wants to have some fun (it should be relatively accessible for the modern man) But few salaries have more than doubled in the last 20 years? so are car prices outstripping salaries? Whilst all these amounts are achievable with some healthy "Man Maths". I feel personally that I wouldn't ever want to finance an M3, but there is little to no chance of me ever paying 93k cash for an M3. Tony your point of "there is always someone to buy the car" I mean yes, but your Porsche 911 turbo owner is now going down to an M3 touring. It seems very few people are starting in M135i, progressing to the M2 then the M3 then M8, which we might have seen in the past with more hierarchal price and model ranges. I feel BMW and some in the motor industry is leaving a huge segment of enthusiasts behind. I would love to see the M3 back alongside the 3.0 Supra (60-65k) 335bhp or 5.0 mustand 50k etc etc 😄
It's actually the only one I like too, so many times I considered test driving one but ultimately the world is getting more expensive too quickly and I'm just going to stick with what I have.
I’m a 30 year veteran of the Motor Trade. It is at its worst ever in regards to main dealer retail. New cars are not coming through at all so whatever you say or think about it being better is VERY incorrect. The used car quality is getting worse because your now selling crap you would normally auction. However if you speak to automotive management it’s the SALESPERSONS FAULT because we get punished when sales are down NOBODY ELSE JUST SALESPEOPLE. WE ARE TREATED LIKE SCUM OF THE EARTH AND GET PAID NOTHING FOR TAKING ALL THE CRAP THAT WE DO.
One big thing effecting confidence in buying used EV's, replacing the battery was not mentioned at all. EV batteries can be insanely expensive to replace. By the time an EV is 10 years old and needs a new battery, it could be mechanically totalled.
Be clear, food is absolutely NOT coming back down in price. If anything, it’s getting more expensive. Retailers have been increasing prices above inflation, manufacturers are focused on premiumisation and shrinkflation i.e. making products smaller but comparatively more expensive, or making more premium products to drive growth. Everything is still more expensive and that isn’t changing right now
In the late 70’s when rates were 17% the average house was around £18,000 and the average salary then was around £4,000 meaning that houses were only 4.5x the average salary, a lot of the reason 4.5x were proposed by lenders in the first place. Also the average earner with the average house on a 90% mortgage was paying around 43% of their salary each month on their mortgage. Nowadays it’s 98% of the average earners salary each month and with the cost of living today it’s completely unaffordable because how is anyone on an average salary going to live let alone save for a deposit. Most who bought properties in the last couple of years on a 90% mortgage are very likely to find themselves in negative equity when they come to remortgage. The average house price is around £280,000 in the uk and the average salary is around £28,000. It was so so much easier back then and not to mention pay increases overtaking inflation throughout some of those years too. Government debt and individual debt is far too high I think now for the kind of gains seen previous. I think we are heading for the worst financial crash we have ever seen.
The big difference between then and now is also the affordability. Back then most couples were only one earner with (normally) the wife staying home and looking after the family. Now both adults earn, so the amount that couples can afford is that much greater. Sellers of course have realised this over time and so prices have increased. Obviously this isn’t the only reason, but for a truer comparison of % of income, you need to take the couple’s income, not just a single.
@@taylor01932 I understand but when you look at the last couple of decades of average inflation vs average pay increase, households have had little choice but to have other people working within that household to bring in extra money to afford to live.
@@taylor01932 House prices are through the roof solely because of immigration. Supply and demand. No supply and high demand. Go look up who owns most properties in London, it isn't us British.
Car market pricing effects everyone based on individual circumstances. I spent 3 months looking at the Golf TCR market before I pulled the trigger. I had my budget in mind, and got the exact car I wanted for the price I wanted, despite them going up. It didn’t bother me because I was quite happy already sat in a mk7.5 GTI, but I am lucky to have been in that position where I didn’t HAVE to get rid of my car, I chose to and so had the luxury of time.
Excellent Podcast. Tony is spot on with the bigger picture perspective and Sam's more personal perspective will strike a cord with many listeners/viewers. Loved it.
Also worth mentioning that more UK manufacturers are moving towards a direct sales model. I.e. selling new and young used cars directly to the consumer, and using the their existing main dealer network as the ‘agent’ who are paid a commission for selling on their behalf. This will eliminate dealer contributions etc and prices will be fixed and the customer will pay the same price at a dealer in North Ireland and Central London…
Good job Tony. Rate’s aren’t coming back down any time soon. The labour market especially in the UK is too tight so inflation will be stubborn. Would be great if you can pick out some super value deals on new cars. In the meantime will be looking out for manufacturers contributions!
On interest rates, I find it quite interesting how un competitive used car finance seems to be. Interest is now to high. I just got a car for £15k, on a bank loan at 6.7% its monthly repayment is £357 with no deposit for 48 months. The same car on a pcp for 48 months at 10.9% with 0 deposit is £303 a month but with a 5k balloon at the end. The total interest cost of the PCP is £2400 more on a 15k car. that's 15-20% extra. Or pay £43 a month more and own the thing outright at the end! or have the equity in the end to swap to another car.
Taxi driver here Pre covid I was looking at 2 year old E classes (E220D AMG line and SE) I was looking around £20k - £23k with under 30k on the clock Now they are more like £28k-33k Massive jump
I bought an i3 in late March, as my first ev experience right before ev market tanked. Cost me 13750, 2015 59k the car had lost about 5-8% battery. It is well known that most battery loss happens with first 18 months then stabalises. My car costs peanuts to run and its also has a range extender, so no real range anxiety. It is the perfect run around for probably 80% of the population who have 2 kids and a place to charge at home. I now want to sell as i am a petrol head miss the noise. Be lucky to get 10k more like 9k private 6-8 trade in. 😅
EV prices will crash further as BIK benefits are removed for company car drivers and the >£40K luxury tax for first five years is introduced and starts to bite. Without the current tax breaks EVs don’t make quite the same financial argument to own. But I agree with Tony that they’ll find their second hand price point in the market (and I think it’s still quite a bit lower than it is even now!)
Agree with Sam. I have a budget and to be able to keep to this the price of the car now has to be lower. Double whammy. Prices are higher and cost of pcp much higher. Agree £100k on M3 touring way too much. Not so long ago new M5s were less. Would buy at lower price. First world problems, but instead of say C63 it’s a C43. Fewer cars that interest me at this price point now, or feel worth it! a hell of a lot of cash! Getting to the point where I will buy at a much lower price point as the value proposition is much better. Manufacturers and dealers loose out. Sometimes feel you are out of touch guys
Next year 190,000 BEVs or Remote polluting Vehicles as I prefer to call them) will be released to the market. This year 60,000 released and the market is -27% and there are currently 15,000 BEVs/RPC available.
Here in central Europe car prices are out of hand. I’m (or was) on the market to buy a sports car in the 40-60k range and prices ate way higher than 2 years ago. Everything is overpriced. I am keeping the money.
What’s happened is we’ve gone back to people only being able to drive what they can afford. Not people overextending on low PCP deals. You either have the money to buy a car, or you don’t. Answer is to work harder and earn more to pay for the things you want. Prior to CZcams how many 30 somethings were driving round in Lambo’s / Ferraris / GT3’s. Pretty much none.
There will be a return of discounts (you used to be able to get nearly 20k off an RS6), plus they'll use the margin to subsidize rates. M5 Touring at 0% APR when bank rates are still 5% etc.
Tony - "the demand has really dropped off for them (EV's)" Sam - "New EV sales up 32% on year to date", Tony - ill-informed opinion, Sam reading facts (from Autocar again)
Tony's opinion wasn't ill informed because he was talking about used EV's as opposed to new EV's. I think it's common knowledge there are great tax incentives on new EV's, hence the new EV sales increase, however, it's also common knowledge there is great reluctance from joe public to buy used EV's hence the used car dealers reluctance to buy and stock them. I'm probably one of those people Tony is talking about in regards sitting back and watching the market. I'm a lifelong petrolhead and as such have more cars than I really need, but as I've generally bought the right model at the right time, I suffer little to no depreciation. However, like Sam, I've been thinking of dipping my toe into the EV market and buying a small cheap EV simply as a short journey run around/shopping car. I most certainly wouldn't be looking at anything like a Taycan for that role though, I was thinking more along the lines of a cheap BMW i3S may be the way to go, but following this video, I now think it would be prudent to wait and watch a little longer.
Used car dealers such as Tony don't know what to do with the pricing of used EVs at the moment, that is why they stay clear. The used EV market is relatively young (compared with ICE) and the non EV dealers inexperienced in this market. They (used car dealers) have considerable knowledge over many years of used ICE car values and that knowledge helps the make their money (and that is what they are about after all). Their lack of knowledge of used EVs, at this time, means that they don't want to take the risk. Used car dealers are in business of making money on purchase and sale of cars, which is a different motivation to that of car purchasers who are more interested in the vehicle, the quality, the ride, the cost etc.That doesn't mean to say that used EVs are not a worthwhile option, we just need more out there being used regularly to show that they are not the problem that the fossil fuel lobby says they are. I agree that it was rather nonsensical for Sam to be so keen on a used Taycan when he had just said he wanted a city run around EV. I have considered an i3 as a 2nd EV city runaround, wish they hadn't stopped making them.@@graemep7791
First time listener here and I thoroughly enjoyed it. Used car prices need to go down a lot more. . Depending where you are on the uk, what's the point in parting with 15-20+K for a car we might only get 7yrs use out of. (Net Zero) That is another scam btw. How will money save the planet?? Agree with the 10yr thing, cars are only built to last about 10yrs these days.
Not to mention that demand for wants in goods generally has regularized. The production has caught back up to the consumers spending. That’s why you see the dip compared to the covid years. It’s bound to happen like all things some point post surging demand in the market
I've just bought my wife a new hybrid Renault (boring I know but I have a 911 and a motorbike so it's fine). I didn't want that car but the deal was ridiculous. 0% no deposit and nearly half the monthlys I was paying on her ford puma. Manufacturers are definitely subsidising new cars, which will hit the used market. I think the bracket that is gonna suffer the most is £50k-120k heavily financed cars.
I know you enjoyed the Aston Vantage V12S manual. I’m holding onto a couple of these. Adrian Newey described them as the finest road going car ever produced as commented in Ben Collins book. Yes they will appreciate and I spend time enjoying them. Once you sell where do you find another one. Their are cars that will increase in value. Good luck on your future car hunts.
@@SH7SH7SH7 I took the Type-R pill. Way better at everything outside of launching vs a RS. Rolling from 20-30mph a Type-R smokes a Focus RS and even last gen Audi RS3.
@@v4skunk739 Yea I looked at the CTR but I'd already had a Clio 200 and Megane 275 previous so had kinda done the front drive thing to death. Glad I did just for the change in experience and all weather traction. Still on the original tyres (just) after 26k so savings there too! Rear drive next time I can be bothered to change
I have to agree with Sam, from my perspective new car prices are mental and have been for quite some time. What you would have spent X amount of time ago to get a performance car, you are now expecting to pay super car prices to get...or thats how it feels.
Cars are still way over the pre-covid prices, no question. The fleets are not changing vehicles as often or in the numbers and there are not fields of 1000s of new cars unsold. Pre-covid a 1 yr old Astra was half new list price, now costs 75% of list. Re M3, relative bought a pre-reg at 3 mth old in 2019 for £37k.
I have bought 3 new BMWs in the U.K. with BMW finance follows: 2013 M135i @ 5.9% APR 2016 M2 @ 4.9% APR 2019 M2 Competition @ 2.9% APR I’ve sold the last one and am waiting to buy my next car in cash. Won’t consider wasting enough money to buy an extra motorbike just on car finance!
Are Porsche an outlier with regards to new car prices being high when compared to used? I have been speccing a couple of new options and on the face of it they seem cheaper than equivalent nearly new comparisons. Possibly people not wanting to wait the longer delivery times?
I have family in Australia and work for a Canadian company car market in North America both all Australia America & Canada have returned to precovid prices there car prices went mad I've been told that G-wagons were going for double what they were and a lot of Americans are really out of pocket, regardless you would think we would have got back to what they were it's now over 3 years since first lockdown when prices started going through the roof.
21:27 yeah, interest rates were high in the 80s; however, the average joe could handle it, because houses were so cheap. Average people now can’t afford overinflated housing prices coupled with 7-8% interest on a mortgage. The purchase price of a house plays a big role in that equation.
A lot of people couldn’t and there was a significant dip in the market as a result. Each percentage increase obviously equates to far more money when the house prices are ten time higher or more, plus the cost of living is out of control. When my Mum bought her house when I was young her mortgage and bills were one third of her net salary.
I know you are only talking about high priced cars but my diesel Peugeot Partner Teepee cost me 14 and a half thousand nine years ago and is now worth only 3 thousand against the only relatively similar vehicle which is a Rifter or Berlingo Multispace priced in the mid 20s or higher and I'm told will come with a rear cargo net fitted meaning it will be classed as an LGV and have its speed restricted to 50 and 60 mph ! Who thought that one up ? I walked out of the dealership with my money still in my pocket !
Adjusted for inflation, new cars are no more expensive than they’ve ever been. A new M3/4 is 80 odd grand, before options. When the E46 M3 released it was just over 40k base price, before options, which surprise surprise, is the equivalent of about 78k in today’s money. This trend tracks across most cars when inflation is taken into account. Part of the issue though, is that salaries in many professions, haven’t kept pace with inflation. Especially in the last 12 months.
Interesting discussion , I follow the US guys who talk about cars and they seem to think that it is even at the high prices of new cars better to buy than used. They believe this because the prices of used are still high, mileage on them is much higher and the quality of used cars are lower than normal. Another guy belives that used car prices will begin to fall, because the wholesale values have fallen so much
10% plus on new car pcp currently. There are some deals around but not seen many. Mercedes have 0% on EV and 3.7% on C43 etc. double my last car rate, and it does make a significant difference to the monthly cost. To stay the same, having to reduce the price of the car significantly. but new car prices are up! Not seeing much of discount at the moment, but may come in the later negotiations. Not paying more in deposit.
Thank goodness for the people who buy new cars on borrowed money - otherwise I won't be able to buy them when they're a year or two old and have lost a massive amount of money!
As a Private Buyer if New Prices Come Down and Used Prices Come Down Then That Means Nothing has Realy Changed As The Gap To Buy A New Car With Selling You Old One Will Possibly Be Similar,Only Things That Have Effect is the Higher interest Rate Now,But That Is Less As Well As You Say. I Think When EVs Get More Mainstreem Prices For All Petrol And Deisel Cars Will Fall A Massive Amount As With Less Fuel Sales The Forcourt Price of Fuel Will Have to Go up To Compensate and Then Demand Will Fall of a Cliff for Cars With Engines. Synthetic Fuel Will Never Be made in Enough Quantity to Make it Affodable and Also The Fuel might be Carbon Neutral But the Car Will still Be Putting out Pollution That Our Goverment Hate.
Car finance is far to high now. I was looking at cars at the weekend and was being told 10 to 12.5% interest and I refuse to pay that much so decided to just not bother. Also insurance companies are taking the absolute Micky with insurance rates as well.
Not too sure I agree with Tony that people just aren’t spending their money, obviously a lot of people are in that boat, but to say that new cars aren’t inherently expensive in general is delusion, especially with the point being somebody else can buy it. If that’s the case were do we stop? Because people could pay 200k for a but it doesn’t make it right or acceptable
Good podcast. I would add that EVs depreciation is high because new EVs are overpriced and in many cases under-speced like mini EV or Honda -e with 80-100miles ranges. Manufacturers on average overprice new EVs by £10k with a view on government incentives and EV leasing schemes. Used car market just corrects it. ICE cars are mostly private buy hence priced to sell.
![Garage Update! What Cars We Have/What We Are Selling? [S6, E43]](http://i.ytimg.com/vi/eSl5YwZAuLc/mqdefault.jpg)
![Garage Update! What Cars We Have/What We Are Selling? [S6, E43]](/img/tr.png)
![What EV Should A 'Petrolhead' Buy? [S6, E55]](http://i.ytimg.com/vi/bicHoLPSvdE/mqdefault.jpg)
It is not just finance rates, it is also the insurance premiums which have gone through the roof. Discussing with a couple of dealers the high finance costs are being offset by some manufacturers subsiding rates but the insurance costs are putting a lot of people off and prices have a long way to drop to get back to reality….anyone remember the ‘90s?
Im only 25 but as a car guy even i remember the 50 quid cars that are now asking £2500.
I bought a mk5 Fiesta ZS last November for that £2500 price, a car that 3/4 years ago was a couple hundred. No idea whats gunna happen to those cars if prices crash.
Insurance is ridiculous, went up nearly 20% this renewal and that was after hunting down the best price.
I do wonder if it is down to the increase in new car costs and the fact that repairs are much more complicated and expensive on new cars.
My insurance went up from £1100 to £3400 without any change to my circumstances, appalling.
Insurance is the biggest scam going. They made billions during lockdowns.
@@kevdoran9918shop around. My car insurance was 700 then I received automatic renewal of 2500. Needless to say I switched insurers and found one closer to the previous year.
You’re right Sam, new cars have become unaffordable for the majority of people but nobody seems to be asking WHY ???
If people stop paying these ridiculous prices, manufactures would be forced to drop their prices and charge what they are worth- not what they think they can get away with.😡
Totally agree - The values of new cars seem to be just bonkers nowadays... ! I don't understand it at all...
Manufacturers have started to price cars based on what is an 'affordable' monthly payment (as most people finance new cars these days). Many people don't look at the total cost of a new car as long as the repayments for a few years are affordable.
Since interest rates have been increasing repayments have become less affordable, especially while many people are getting squeezed from other payments which are linked to interest rates (credit, debt, mortgage etc) also insurance.
I can imagine many car manufacturers are going to find new car sales falling fast.
Don't worry when the Tesla Model 2 (or whatever it's called) reaches the market sometime next year, it'll bankrupt combustion manufactures. It's going to launch at around £22, 000, it'll disrupt the market totally
I was talking to a car dealer at the weekend at a wedding. He point blank refuses to take an electric car as part exchange or buy them used. His take is that no one wants to buy them used and the customers want unrealistic prices to sell them.
I know main dealers that will not take EVs back as well. If you’ve leased on at least you can hand it back at the end of the term. If you bought one you’ve got it for live. There are Zoe’s and leafs that have been on autotrader over a year.
I think Tony is spot on with what’s happening with consumers.
As a cash buyer, pre the interest rate hikes, I was prepared to drop £75k on my next car. Now I’m sitting on the money and keeping what I’ve got.
Interest I’m getting on capital is one part but the falling prices of cars is another.
I think what you meant to say was conchumers.
No idea what conchumers are, but Tony seems to know a lot about them.
@@barbarusbloodshed6347 your attempt at some sort of humour at Tony's expense is very childish
Buy a 1 year old Ariel atom!!
Everything to be said for not sinking hard cash when the interest rates are getting better. Better than finance but that’s not the point. I’d you’re not used to finance then it seems a huge rip off.
One gets the sense that Tony is so excited and flattered to be asked about his specialist subject - the new/nearly new car market, that he feels the need to answer every question with something emphatic and interesting, even if either a. He doesn’t know the answer or b. There’s no emphatic or interesting truth to be told. Hence the confusing babble, regular contradictions and meandering, often inconclusive ‘explanations’. Commendable enthusiasm but please, Tony, it’s ok not to impress with every answer
Enjoyed the podcast 👍
Frightens me that the industry seems to have accepted £80k as a vanilla price for a car. Life seems to be getting more and more expensive!
A regular car (Golf GTI) was only £4k in the 80s. 😅
I can easily go out and find a decent car for £5K .
An inflation calculator provides perspective on car prices.
Yes Cars have increased in value but so have running costs while wages have simply not, now you have mortgage / broadband / tv subscription / internet storage / health insurance and food to contend with and wages have not increased in many industries to keep up, simples
£30K for an electric Corsa, £40K for an electric Astra.
That is absolute insanity.
Tony made a lot (more) sense in this episode! Bloody time 😉 Well done 👍
There is something Tony misses with the 20% interests on mortgages 60 years ago.
Of course 20% is insane, but back then an average house would cost maybe 3 years of an average salary.
Now the average house costs what, 20-25 years of an average income?
So yeah. The old generations didn't have it more difficult.
@@borjastickHouses were better made 60 years ago. Any one in the building trade will agree too. 90% of new builds are built with cost cutting in mind.
So, you basically made a bad financial decision at the time?
Firstly, a monthly INTEREST payment of 45% of your pretax salary. Surely that's unwise? And a bank would not allow that now. At least not here in Switzerland.
Secondly, 100% mortgage? Again no bank would allow that now.
The appreciation of your asset will have made up for it. But damn.
I live and work in Zurich. Together with my wife we earn approx 3x the average swiss salary. Yet it's unthinkable to buy a property unless we go way out.
@@Swixperience 100% loan to value mortgages are now readily available in the UK; granted they were not widely advertised since the 2008 crash but they existed. Some lenders pre-crash would allow you to self-certify your earnings on a 110% LTV mortgage, that in a minor part was the advent of toxic debt which lead to the crash. So people spending 40+% of their take home net salary on a 100% mortgage is more common than you would think. Differing generations have differing issues; reality is that for the last 15 years people have become accustomed to ultra low interest rate borrowing which has then been the bedrock of the property prices and general cost of living that we all see today. But no one has budgeted for that period to be over as it is now.
UK inflation is stubbornly high in part because plenty out there are still recouping their losses during the pandemic and buffering for a similar event. The pandemic was the reality stress test that most people avoided thinking about when they sign their mortgage and ignore the bit that says 'can you still afford this if interests rates were 3x/4x/5x higher?'. The part that differs now I'd suggest is that in the past it was your problem and yours to sort and if you didn't you were in real trouble with the risk of losing everything; now there is a sense of entitlement that the Government or someone else should step in to solve your problem because it's someone else fault and if not you can write it all off and start again. Same goes with car financing, the harsh reality of a consequence free attitude to debt and credit management that people now have.
Sam touched on a point where his father would not borrow because he couldn't afford it, people now borrow to pay off other borrowing without any relation to whether they can afford it, such has been the ease in which credit has been dished out by the banks. Personally I'm now fortunate that I have one debt which is my mortgage yet from a banking / credit perspective I'm seen as a bad customer because I don't have debt!
And houses in the UK were built better then than they are now in that there were less issues structural or finish wise but they weren't thermally efficient nor environmentally friendly!
@@v4skunk739 Not true, no insulation or double glazed windows and very few had much of a heating system or anything more than a basic bathroom and kitchen.
@@borjastickyou are wrong about the quality of houses. New builds are appealing, mould covered messed where every corner that can be cut gets cut.
I bought my 12yr old car for £3600 cash, 3 yrs ago. There’s nothing wrong with it, and apart from routine maintenance costs me very little. I like it, and now that this particular model has been discontinued don’t really see anything else I like enough to replace it. It’s currently on 120k miles. I’ll keep it going until it’s no longer financially viable, then buy another model for a similar sum. I don’t see the point in splurging £300-£400 on a brand new car lease, especially as I dislike almost everything currently on sale new.
Used car prices are way too high, they need to come back down to reality.
Doesn't help when the new cars are priced nearly 1/3 more than in 2018-2020... Another reason used are holding value.
I don't think they are that high anymore tbh. Value of money has changed, everything costs more now, £1 4 years ago is not £1 today
When peoples mortgages start going up by £1-2k a month then the new/used car market will take a reset
I agree with Sam. I was lucky enough to buy a new E46 M3 Convertible and it was £42,000. I cannot get my head around paying over £100,000 for a new M3/M4. Its gone mad. M2 at £77,000 what!
Blame PCP's for that. Low interest rates/PCP's has encouraged people to buy expensive 'premium product' which in the normal way could never be afforded.
This has allowed the manufacturers to add all sorts of pointless crap on their cars and push prices through the roof which no one noticed, because they were paying £299/£399/£499 per month
£42k in 2001 is £75k today. The car has moved upmarket somewhat in that time with the M2 slotting in underneath that. But as has been pointed out, with most people buying cars on finance, the RRP of the car is less relevant because what you are really looking at is the monthly payment, which can be totally detached considering interest rates and depreciation.
@@adogmcdizzle RRP less relevant IF the interest rates are sensible - 10%+ APR changes the ball game considerably though, especially when coupled with a hugely inflated list price... !
@@Auto_Funk yes, you are correct. To add: demand has been part of it as well, since supply chains have been restricted and customer demand has been high, manufacturers want a bit of the action when dealer mark ups become greater.
It’s a very lopsided market for EV’s . Effectively only company car owners are buying them due to the tax incentives ( cheap tax / the ability to offset the car against corporation tax . Hence the large number of Taycans being purchased by powerfully built director types . The issues happen on the second hand market as there is weak demand from private buyers .
When are we getting another “Stars and their cars chat”? The first one was absolutely amazing, cannot wait for the next one!
Wasn’t for me personally, subscribed for Sam and Tony’s discussion, felt like it took away from that
It was crap go watch top gear if you want that rubbish
Couldn’t agree more👍
I quite enjoyed it but it's one of their least viewed episode recently
As a financial advisor I usually cringe when people talk about interest rates etc but Tony’s thoughts/ comments are actually incredibly accurate 👏🏼
Tony has a little bit of a clue. Sam is a clueless posho: "my dad is super against borrowing money" !? Because it's so much easier to just inherit it when you're part of a major landowning family? Sam's Uncle is Anthony Fane, 16th Earl of Westmoreland. Not that he mentions it, for obvious reasons. Heaven help anyone who takes his advice seriously. At least there's one thing money can't buy: a decent head of hair.
@@johnosullivan2017 Elon Musk bought a very good head of hair!
@@johnosullivan2017but you just sound salty & broke. If you dont like him just dont watch his videos…
@@Miz-ql3ho I'm a long way from broke. But I'll take salty. I watch car channels because I'm a petrolhead. British society is bedevilled by our wretched class system and unearned privilege. Sam Fane is an especially egregious example as he'd pretending to be a normal bloke. And now, back to Harry's Garage and Rory on Autotrader....
@@johnosullivan2017 no im not saying you are broke, merely suggesting you come across this way. Society may be broken but its upto yourself to pull yourself up, nobody will help you or me but ourselves. God bless and I’ll see you over there 💪
Been looking to get a new car for ages but 10%+ APR making everything far too much, flat out refuse to pay that much in interest.
Couldn't agree more, wonder how long it'll take but the interest rate is way too high
My mk1 Golf isnt compliant with ULEZ but its still totally free, A-reg cars from next year, and so on, the whole thing is a scam leading to road charging for everyone, happy days...
8:35 Sam, the most harmful emission is NOx, which is high on Diesel engines but low in gasoline engines. That’s why your 360 Modena is ULEZ compliant.
And the government actively pushed us to buy diesels not that long ago with cheap road tax.
I feel like used car prices have come down close to Covid but OEM's are still taking the mic with new car prices!
ULEZ is just another form of tax for consumers. Won’t actually help in reality. Short term prices will increase as people use the grant from the mayor to purchase new used cars. But not sure if it’ll be enough to take market back to 2021 levels
Exactly. Emissions are the biggest fooking scam since the last one.
Tony is spot on with his view on the car market except for one thing Covid was not and will never be 'The Good Old Days'
Absolutely brilliant podcast chat, both Sam and Tony are bang on, cost of living crisis and interest rate, Ulez changes effecting most people. I am struggling to survive and work full time, would like to change my car, but can't.
Changing your car for anything more expensive will only burn money on a larger scale. Run it till it drops
Further to your conversation 4 tycans for sale in auto trader at less than 60k with OK mileage
PCP/PCH pushed up new car prices, which in turn pushed up second hand prices. With higher interest rates now much higher and harder depreciation impacting guaranteed bond future value, PCP/PCHs will become more expensive and either sales will reduce, list prices may have to drop, or hidden dealer discounts may become more prevalent. Will be interesting to see what happens in reality. However, looks like cheaper cars in the near future 😊
tony talks some right old bollox... be it mortgage rates, strength of the pound or the cost of shipping containers, take your pick!
the problem is only, for those of us who are at the lower end of the market, who had not become rich in the last two years; basically, if I could afford a ctr fk8, with all the living cost increases and the price increases, I simply cannot afford the new type R.
If one could afford an rs3 4 years ago, if that said person's income is more or less the same, that person will not be able to afford the new rs3.
This is true for higher price cars up to a point.
So, it is true, if a person that had a new m3 since new, when the m3s were 65k, cannot afford 90-100k on a new one.., there's no problem as, the former client of a brand that had 100k cars a few years ago, which now are 130k, will say, alright.. my favourite brand got up in prices 30%+ so let's see what I can find at 100k?
Like I have said, there are options for ppl to lvl down.. and brands can access higher income lvl clients.. so, all good on this part.
The only ones who actually are hurt are ppl like me, the regular joe, for which a 30k gti clubsport and a 37k fk8 were pretty good deals but now, at 50k+ golf Rs and 50k+ type Rs, I find myself out priced by everything. Not even the valuable i30n is not that cheap anymore and also, most of the manufacturers have withdrew the affordable performance cars at this price point.. basically, there are no affordable performance cars.
I don't feel that confident about the market changing because from a manufacturer perspective, it is really, really, really hard to turn that huge cargo ship on its toes. That's why the prices will not drop as much or as fast as we hope.. and even if they drop, they will drop on large volume cars..., nothing being remotely special or interesting to drive will ever come back down in price... and that's is because, at upper lvls, you can always find new clients(ferrari's tactic!(one of them), let's not forget that a 360 and an f430 were around 150k or less, while the current 296gtb is 250k to 300k)
Sam was correct in the last segment. Its not just about what you can afford, its about the value for money. And that is out of wack right now.
A lot of money is sitting on the sidelines because the prices just don't make sense. Sam's example was good: "I want an M5, but now the M3 is priced like an M5. I'll just opt out altogether."
In other words, its not that people won't spend £100K. It's that they wont spend it on something they think is actually worth £80K.
First time listener, at first I just thought cheeky cockneys, but I actually enjoyed it, and I learnt something about how dealers operate. I have subscribed for more.
One of your best shows guys, well done.❤ I track and follow cars for months and in recent times years before I pull the pin and haven’t financed a car for 20 plus years.. I always knew the prices would come back… and just ignore the BS and general public behaviour.
We enjoyed this pod cast
There's probably good reason why there are a lot of Taycans, Etrons and Teslas coming onto the market now. They were popular 3 years ago, as they are now. I'm just swapping my etron 55 for a Q8 etron 55 and my 56,000 mile, 3 year old launch edition sportback will be an excellent used buy for its new owner. No battery degradation to date (reliable 230 miles range), cheap to service, no road tax or congestion charge, cheap to "fuel" and a great long distance car.
How’s that M3 Touring going? At 90 days and problematic yet? That sitting around says everything you need to know about the market.
Its "sitting around" because Tony loves it and he's (over) priced it accordingly - there's list price delivery miles ones on AT for £97K
Really enjoyed hearing Tony’s perspective in this episode.
Said to a few people recently talking about Taycan residuals. People piled into Taycan expecting GT product residuals or through cheap salary sacrifice lease deals and are now getting their fingers burned. The precedent of Range Rover Tony made is something I agree with. Historically if you look at 7 series, S class you used to take a Bath on them. Or even look at Panamera residuals, I have no idea why people expected to flip a big luxury saloon car or at least not loose their shirt. EV or not.
Really interesting episode!
EV market crash is because of consumer lack of confidence and fleet dumping just means there will be an established lower price point for the used ev market.
I just bought an 18month seat mii electric as a daily for just over 12k (which you couldn't get for less than 20k a year ago), the dealer gave me an insane 11k for my 15 year old edition 30 golf. Costs me 4p a mile to run instead of 22p a mile in the golf.
I really don't see it depreciating much further over the next two years. It's become more affordable to buy an EV = more buyers = prices stable
52-53 mins in... Sam completely on the money and Tony either in denial or missing the point entirely...
New cars are quite simply far too expensive (EV's being the worst offenders)... It's nothing to do with what people can or can't afford - They are simply way over priced....And I can't see this ever adjusting back down...
Firstly thanks to both for a great POD.
I think Sam, Was correct in the last segment.
New car prices have lost touch with reality recently, It seems they are trying to follow the housing model of never-ending price increases!
The e46 m3 used to be £41k in 2003 twenty years later and m3 touring is £93k.!
I always view the M3 a mid-level management car that wants to have some fun (it should be relatively accessible for the modern man)
But few salaries have more than doubled in the last 20 years? so are car prices outstripping salaries? Whilst all these amounts are achievable with some healthy "Man Maths". I feel personally that I wouldn't ever want to finance an M3, but there is little to no chance of me ever paying 93k cash for an M3.
Tony your point of "there is always someone to buy the car" I mean yes, but your Porsche 911 turbo owner is now going down to an M3 touring. It seems very few people are starting in M135i, progressing to the M2 then the M3 then M8, which we might have seen in the past with more hierarchal price and model ranges.
I feel BMW and some in the motor industry is leaving a huge segment of enthusiasts behind. I would love to see the M3 back alongside the 3.0 Supra (60-65k) 335bhp or 5.0 mustand 50k etc etc
😄
Heard the revuelto is 500k pounds base . Can we put a stop to this madness
Most brutal EV depreciation is the Jaguar I-Pace, used prices are really in the gutter!
Same with Tesla Model 3's as well i reckon, they're mental cheap now lol
Not surprised nobody want the Jaguar ipace, that thing is a crime against car design...
It's actually the only one I like too, so many times I considered test driving one but ultimately the world is getting more expensive too quickly and I'm just going to stick with what I have.
I’m a 30 year veteran of the Motor Trade. It is at its worst ever in regards to main dealer retail. New cars are not coming through at all so whatever you say or think about it being better is VERY incorrect. The used car quality is getting worse because your now selling crap you would normally auction. However if you speak to automotive management it’s the SALESPERSONS FAULT because we get punished when sales are down NOBODY ELSE JUST SALESPEOPLE. WE ARE TREATED LIKE SCUM OF THE EARTH AND GET PAID NOTHING FOR TAKING ALL THE CRAP THAT WE DO.
One big thing effecting confidence in buying used EV's, replacing the battery was not mentioned at all. EV batteries can be insanely expensive to replace. By the time an EV is 10 years old and needs a new battery, it could be mechanically totalled.
you cannot find a buyer for these EVs over three years old forget 10 years
I love listening & learning from Tony. Absolute gold. Big love Sam with the questions. Kindest regards, Richard U.K
My Evo 8 is ULEZ compliant yet it probably pumps out more CO2 than a jumbo jet.
C02 is plant food bro.
I've got a Suzuki Cappuccino 660cc 3 cylinder turbo which is not ULEZ compliant. ULEZ is utter bullshit.
Be clear, food is absolutely NOT coming back down in price. If anything, it’s getting more expensive. Retailers have been increasing prices above inflation, manufacturers are focused on premiumisation and shrinkflation i.e. making products smaller but comparatively more expensive, or making more premium products to drive growth. Everything is still more expensive and that isn’t changing right now
This is monetary policy in action. Higher interest rates -> more expensive to borrow -> lower demand -> prices must come down -> less inflation
Ulez is not on engine size, it's more on NOX levels. Which older diesel cars kick out a lot of.
In the late 70’s when rates were 17% the average house was around £18,000 and the average salary then was around £4,000 meaning that houses were only 4.5x the average salary, a lot of the reason 4.5x were proposed by lenders in the first place.
Also the average earner with the average house on a 90% mortgage was paying around 43% of their salary each month on their mortgage.
Nowadays it’s 98% of the average earners salary each month and with the cost of living today it’s completely unaffordable because how is anyone on an average salary going to live let alone save for a deposit. Most who bought properties in the last couple of years on a 90% mortgage are very likely to find themselves in negative equity when they come to remortgage.
The average house price is around £280,000 in the uk and the average salary is around £28,000.
It was so so much easier back then and not to mention pay increases overtaking inflation throughout some of those years too. Government debt and individual debt is far too high I think now for the kind of gains seen previous.
I think we are heading for the worst financial crash we have ever seen.
The financial crash is all part of their plan to implement the great reset communism. It's all to do with our usury based cancerous banking system.
The big difference between then and now is also the affordability. Back then most couples were only one earner with (normally) the wife staying home and looking after the family. Now both adults earn, so the amount that couples can afford is that much greater. Sellers of course have realised this over time and so prices have increased. Obviously this isn’t the only reason, but for a truer comparison of % of income, you need to take the couple’s income, not just a single.
@@taylor01932 I understand but when you look at the last couple of decades of average inflation vs average pay increase, households have had little choice but to have other people working within that household to bring in extra money to afford to live.
@@taylor01932 House prices are through the roof solely because of immigration.
Supply and demand. No supply and high demand.
Go look up who owns most properties in London, it isn't us British.
You all need to stop letting foreigners in and letting foreign buyers buy properties they don't even live in and jacking your prices sky high.
Car market pricing effects everyone based on individual circumstances. I spent 3 months looking at the Golf TCR market before I pulled the trigger. I had my budget in mind, and got the exact car I wanted for the price I wanted, despite them going up. It didn’t bother me because I was quite happy already sat in a mk7.5 GTI, but I am lucky to have been in that position where I didn’t HAVE to get rid of my car, I chose to and so had the luxury of time.
Excellent Podcast. Tony is spot on with the bigger picture perspective and Sam's more personal perspective will strike a cord with many listeners/viewers. Loved it.
Also worth mentioning that more UK manufacturers are moving towards a direct sales model. I.e. selling new and young used cars directly to the consumer, and using the their existing main dealer network as the ‘agent’ who are paid a commission for selling on their behalf. This will eliminate dealer contributions etc and prices will be fixed and the customer will pay the same price at a dealer in North Ireland and Central London…
Good job Tony. Rate’s aren’t coming back down any time soon. The labour market especially in the UK is too tight so inflation will be stubborn. Would be great if you can pick out some super value deals on new cars. In the meantime will be looking out for manufacturers contributions!
No such thing as super deal on a new car.
On interest rates, I find it quite interesting how un competitive used car finance seems to be. Interest is now to high. I just got a car for £15k, on a bank loan at 6.7% its monthly repayment is £357 with no deposit for 48 months.
The same car on a pcp for 48 months at 10.9% with 0 deposit is £303 a month but with a 5k balloon at the end.
The total interest cost of the PCP is £2400 more on a 15k car. that's 15-20% extra. Or pay £43 a month more and own the thing outright at the end! or have the equity in the end to swap to another car.
This is why I bought a brand new GT86 back in 2013 and haven’t bothered to upgrade it.
Fascinating insight into used car market dynamics Tony, thanks
It was the New Zealand central bank that created the 2% inflation target not Australia :)
Taxi driver here
Pre covid I was looking at 2 year old E classes (E220D AMG line and SE)
I was looking around £20k - £23k with under 30k on the clock
Now they are more like £28k-33k
Massive jump
Everything the whole charade is all by design!
I bought an i3 in late March, as my first ev experience right before ev market tanked. Cost me 13750, 2015 59k the car had lost about 5-8% battery. It is well known that most battery loss happens with first 18 months then stabalises.
My car costs peanuts to run and its also has a range extender, so no real range anxiety. It is the perfect run around for probably 80% of the population who have 2 kids and a place to charge at home.
I now want to sell as i am a petrol head miss the noise. Be lucky to get 10k more like 9k private 6-8 trade in. 😅
EV prices will crash further as BIK benefits are removed for company car drivers and the >£40K luxury tax for first five years is introduced and starts to bite. Without the current tax breaks EVs don’t make quite the same financial argument to own. But I agree with Tony that they’ll find their second hand price point in the market (and I think it’s still quite a bit lower than it is even now!)
Given prices for normal cars that 40k "luxury" band is a joke.
Agree with Sam. I have a budget and to be able to keep to this the price of the car now has to be lower. Double whammy. Prices are higher and cost of pcp much higher. Agree £100k on M3 touring way too much. Not so long ago new M5s were less. Would buy at lower price. First world problems, but instead of say C63 it’s a C43. Fewer cars that interest me at this price point now, or feel worth it! a hell of a lot of cash! Getting to the point where I will buy at a much lower price point as the value proposition is much better. Manufacturers and dealers loose out. Sometimes feel you are out of touch guys
The EV will crash when they need battery replacement 7 to 8 years old cars car hit the market.
Big time, so many people brainwashed on EV's. Nothing about them is sustainable.
Next year 190,000 BEVs or Remote polluting Vehicles as I prefer to call them) will be released to the market. This year 60,000 released and the market is -27% and there are currently 15,000 BEVs/RPC available.
Here in central Europe car prices are out of hand. I’m (or was) on the market to buy a sports car in the 40-60k range and prices ate way higher than 2 years ago. Everything is overpriced. I am keeping the money.
please let Tony dip into the STG production budget for a bloody manicure!
What’s happened is we’ve gone back to people only being able to drive what they can afford. Not people overextending on low PCP deals. You either have the money to buy a car, or you don’t. Answer is to work harder and earn more to pay for the things you want. Prior to CZcams how many 30 somethings were driving round in Lambo’s / Ferraris / GT3’s. Pretty much none.
There will be a return of discounts (you used to be able to get nearly 20k off an RS6), plus they'll use the margin to subsidize rates. M5 Touring at 0% APR when bank rates are still 5% etc.
Tony was really well prepared on the finacial topics 👍🏼
Tony is a used car dealer!
Tony - "the demand has really dropped off for them (EV's)" Sam - "New EV sales up 32% on year to date", Tony - ill-informed opinion, Sam reading facts (from Autocar again)
Tony's opinion wasn't ill informed because he was talking about used EV's as opposed to new EV's. I think it's common knowledge there are great tax incentives on new EV's, hence the new EV sales increase, however, it's also common knowledge there is great reluctance from joe public to buy used EV's hence the used car dealers reluctance to buy and stock them.
I'm probably one of those people Tony is talking about in regards sitting back and watching the market. I'm a lifelong petrolhead and as such have more cars than I really need, but as I've generally bought the right model at the right time, I suffer little to no depreciation.
However, like Sam, I've been thinking of dipping my toe into the EV market and buying a small cheap EV simply as a short journey run around/shopping car. I most certainly wouldn't be looking at anything like a Taycan for that role though, I was thinking more along the lines of a cheap BMW i3S may be the way to go, but following this video, I now think it would be prudent to wait and watch a little longer.
At that point, I don't believe he was talking about used cars. The subject changed to used later in the conversation@@graemep7791
Used car dealers such as Tony don't know what to do with the pricing of used EVs at the moment, that is why they stay clear. The used EV market is relatively young (compared with ICE) and the non EV dealers inexperienced in this market. They (used car dealers) have considerable knowledge over many years of used ICE car values and that knowledge helps the make their money (and that is what they are about after all). Their lack of knowledge of used EVs, at this time, means that they don't want to take the risk. Used car dealers are in business of making money on purchase and sale of cars, which is a different motivation to that of car purchasers who are more interested in the vehicle, the quality, the ride, the cost etc.That doesn't mean to say that used EVs are not a worthwhile option, we just need more out there being used regularly to show that they are not the problem that the fossil fuel lobby says they are. I agree that it was rather nonsensical for Sam to be so keen on a used Taycan when he had just said he wanted a city run around EV. I have considered an i3 as a 2nd EV city runaround, wish they hadn't stopped making them.@@graemep7791
First time listener here and I thoroughly enjoyed it.
Used car prices need to go down a lot more. . Depending where you are on the uk, what's the point in parting with 15-20+K for a car we might only get 7yrs use out of. (Net Zero) That is another scam btw. How will money save the planet??
Agree with the 10yr thing, cars are only built to last about 10yrs these days.
Not to mention that demand for wants in goods generally has regularized. The production has caught back up to the consumers spending. That’s why you see the dip compared to the covid years. It’s bound to happen like all things some point post surging demand in the market
I've just bought my wife a new hybrid Renault (boring I know but I have a 911 and a motorbike so it's fine). I didn't want that car but the deal was ridiculous. 0% no deposit and nearly half the monthlys I was paying on her ford puma. Manufacturers are definitely subsidising new cars, which will hit the used market. I think the bracket that is gonna suffer the most is £50k-120k heavily financed cars.
Glad you got your priorities right 🤣👍
@@brentpowell7889 haha yep!!
I know you enjoyed the Aston Vantage V12S manual. I’m holding onto a couple of these. Adrian Newey described them as the finest road going car ever produced as commented in Ben Collins book. Yes they will appreciate and I spend time enjoying them. Once you sell where do you find another one. Their are cars that will increase in value. Good luck on your future car hunts.
Bought my Focus RS brand new 2017 32k, cheapest on autotrader now same spec/miles £26,985. Pretty content with that
They’ve held their value well to be fair. Shame about the reliability of the engines though. Otherwise great car
@@SH7SH7SH7 I took the Type-R pill. Way better at everything outside of launching vs a RS. Rolling from 20-30mph a Type-R smokes a Focus RS and even last gen Audi RS3.
Focus RS is doing really well on the used market, same for the Megane RS and Civic Type R. Anyone who bought them new is laughing.
@@v4skunk739 how is the type r doing in terms of value?
@@v4skunk739 Yea I looked at the CTR but I'd already had a Clio 200 and Megane 275 previous so had kinda done the front drive thing to death. Glad I did just for the change in experience and all weather traction. Still on the original tyres (just) after 26k so savings there too! Rear drive next time I can be bothered to change
Agree new prices of cars are crazy now..
This is so insightful, I'm washing it again!
I have to agree with Sam, from my perspective new car prices are mental and have been for quite some time. What you would have spent X amount of time ago to get a performance car, you are now expecting to pay super car prices to get...or thats how it feels.
Excellent vid guys...well done! Really informative and straight forward.
Cars are still way over the pre-covid prices, no question.
The fleets are not changing vehicles as often or in the numbers and there are not fields of 1000s of new cars unsold.
Pre-covid a 1 yr old Astra was half new list price, now costs 75% of list. Re M3, relative bought a pre-reg at 3 mth old in 2019 for £37k.
I have bought 3 new BMWs in the U.K. with BMW finance follows:
2013 M135i @ 5.9% APR
2016 M2 @ 4.9% APR
2019 M2 Competition @ 2.9% APR
I’ve sold the last one and am waiting to buy my next car in cash. Won’t consider wasting enough money to buy an extra motorbike just on car finance!
Are Porsche an outlier with regards to new car prices being high when compared to used? I have been speccing a couple of new options and on the face of it they seem cheaper than equivalent nearly new comparisons. Possibly people not wanting to wait the longer delivery times?
Interesting discussion, around the current market situation.
Being honest first time I’ve taken Tony seriously 😆
Good consumer advice. Cheers boys 👍🏽
I have family in Australia and work for a Canadian company car market in North America both all Australia America & Canada have returned to precovid prices there car prices went mad I've been told that G-wagons were going for double what they were and a lot of Americans are really out of pocket, regardless you would think we would have got back to what they were it's now over 3 years since first lockdown when prices started going through the roof.
21:27 yeah, interest rates were high in the 80s; however, the average joe could handle it, because houses were so cheap. Average people now can’t afford overinflated housing prices coupled with 7-8% interest on a mortgage. The purchase price of a house plays a big role in that equation.
A lot of people couldn’t and there was a significant dip in the market as a result. Each percentage increase obviously equates to far more money when the house prices are ten time higher or more, plus the cost of living is out of control. When my Mum bought her house when I was young her mortgage and bills were one third of her net salary.
Can you please do a segment on how modifications on your car can affect the value
I know you are only talking about high priced cars but my diesel Peugeot Partner Teepee cost me 14 and a half thousand nine years ago and is now worth only 3 thousand against the only relatively similar vehicle which is a Rifter or Berlingo Multispace priced in the mid 20s or higher and I'm told will come with a rear cargo net fitted meaning it will be classed as an LGV and have its speed restricted to 50 and 60 mph ! Who thought that one up ? I walked out of the dealership with my money still in my pocket !
38:06
Ive been waiting for 7 months to buy.
Think im gonna go in January
Yes very interesting that up until recently the majority of Merc’s were almost all diesels in London? 🤔
As a portuguese is astonishing the difenrece between our car market and yours.
Interesting. Can you explain in more detail? Thanks.
Adjusted for inflation, new cars are no more expensive than they’ve ever been. A new M3/4 is 80 odd grand, before options. When the E46 M3 released it was just over 40k base price, before options, which surprise surprise, is the equivalent of about 78k in today’s money. This trend tracks across most cars when inflation is taken into account.
Part of the issue though, is that salaries in many professions, haven’t kept pace with inflation. Especially in the last 12 months.
Is it just me or do these two talk about this every other week?
Interesting discussion , I follow the US guys who talk about cars and they seem to think that it is even at the high prices of new cars better to buy than used.
They believe this because the prices of used are still high, mileage on them is much higher and the quality of used cars are lower than normal.
Another guy belives that used car prices will begin to fall, because the wholesale values have fallen so much
10% plus on new car pcp currently. There are some deals around but not seen many. Mercedes have 0% on EV and 3.7% on C43 etc. double my last car rate, and it does make a significant difference to the monthly cost. To stay the same, having to reduce the price of the car significantly. but new car prices are up! Not seeing much of discount at the moment, but may come in the later negotiations. Not paying more in deposit.
Thank goodness for the people who buy new cars on borrowed money - otherwise I won't be able to buy them when they're a year or two old and have lost a massive amount of money!
After next Tuesday when ULEZ starts (29/8/23), prices will calm down a bit for used EU6 stuff, prices will continue to drop as demand decreases
As a Private Buyer if New Prices Come Down and Used Prices Come Down Then That Means Nothing has Realy Changed As The Gap To Buy A New Car With Selling You Old One Will Possibly Be Similar,Only Things That Have Effect is the Higher interest Rate Now,But That Is Less As Well As You Say.
I Think When EVs Get More Mainstreem Prices For All Petrol And Deisel Cars Will Fall A Massive Amount As With Less Fuel Sales The Forcourt Price of Fuel Will Have to Go up To Compensate and Then Demand Will Fall of a Cliff for Cars With Engines.
Synthetic Fuel Will Never Be made in Enough Quantity to Make it Affodable and Also The Fuel might be Carbon Neutral But the Car Will still Be Putting out Pollution That Our Goverment Hate.
Great show, really interesting perspective. Thanks
Car finance is far to high now. I was looking at cars at the weekend and was being told 10 to 12.5% interest and I refuse to pay that much so decided to just not bother. Also insurance companies are taking the absolute Micky with insurance rates as well.
Really enjoyed the podcast guys
Not too sure I agree with Tony that people just aren’t spending their money, obviously a lot of people are in that boat, but to say that new cars aren’t inherently expensive in general is delusion, especially with the point being somebody else can buy it. If that’s the case were do we stop? Because people could pay 200k for a but it doesn’t make it right or acceptable
When tony says he knows a bit about import and export, he knows a shit tonne 😂
Good podcast.
I would add that EVs depreciation is high because new EVs are overpriced and in many cases under-speced like mini EV or Honda -e with 80-100miles ranges.
Manufacturers on average overprice new EVs by £10k with a view on government incentives and EV leasing schemes. Used car market just corrects it.
ICE cars are mostly private buy hence priced to sell.