Is the used car "bubble" about to pop?

[gary1365]

I wonder how many of the EVs on the road are actually bought outright, it couldn’t be many!

Tbf probably about the same amount of any brand new cars.

 

[Coog]

30% on what? New?

Im talking about ones sitting for a few weeks / months at a dealer dropping tens of thousands without even turning a wheel!

Average 30% drop on Taycan, E-Tron and MG. Tesla is 36% drop according to a wee article I read today.

 

[gpaevo]

I wonder how many of the EVs on the road are actually bought outright, it couldn’t be many!

Vast majority are probably NHS lease deals. Anyone I know who has one is NHS.

30% on what? New?

Im talking about ones sitting for a few weeks / months at a dealer dropping tens of thousands without even turning a wheel!

Market price in general it said, an average of new and used price reduction.


This is on new cars:

 

[Chris100]

Yup! BMW are looking 9 a bit % for NEW 3er. I’m sure the support on other models might be a bit better. I remember the good old days of 2.9% of my new M2 in 2020. Sigh.

Just jumped up to 9.9%, I was looking at a new M2 which was half sensible at 8.9% with a £2.5k deposit contribution from BMW.

Porsche rates also jumped up to 13% from 11.9%, frustrating when the actual BoE rate has not been increased.

 

[Burt2000]

Vast majority are probably NHS lease deals. Anyone I know who has one is NHS.

Market price in general it said, an average of new and used price reduction.

Same here, its either an NHS deal or the likes of a company car allowance, DLA or something like that. The market then gets flooded with the ex lease cars and very few are buying them without a manufacturer warranty as they would be very expensive to fix. I sometimes question how sustainable EVs are really and what happens to all of these ones sitting for months and months as nobody seems to want them.

 

[Kerzo]

I don’t think it’s an EV only problem - modern ICE cars are ticking time bombs with expensive issues that will likely be uneconomical to repair in future especially as the independent mechanics to do the work are few and far between and trending the wrong way too.

 

[Burt2000]

It just shows how trends have changed and cars are now seen to be more like white goods for the majority of the population.

 

[gpaevo]

List price for that carbon edition in 2020 was £71k. Prices are still very strong on RS4's.

Carbon Black listed on Autotrader at Carlisle Audi, 10 miles. Was £83,755 now £72,755

 

[Burt2000]

11k reduction? Shows what profit they are potentially making if they can drop that much.

 

[gpaevo]

11k reduction? Shows what profit they are potentially making if they can drop that much.

Yeah, I guess they'll continue to drop as that dealer had at least 5 RS4's with delivery miles.

 

[Graham2]

Carbon Black listed on Autotrader at Carlisle Audi, 10 miles. Was £83,755 now £72,755

Thats the RRP list price you're looking at on that one but yea there are some serious discounts off list on some cars. There are 52 brand new RS4's on Autotrader!

 

[NickR]

To be fair there have always been considerable discounts available on new cars in my experience. I got decent discount on both my F31 330d and Golf R when I bought them new by using a quote from brokers such as Coast2Coast. Just depends on if the dealer your speaking to wants to sell a car for less of a margin to get the sale.

 

[gpaevo]

To be fair there have always been considerable discounts available on new cars in my experience. I got decent discount on both my F31 330d and Golf R when I bought them new by using a quote from brokers such as Coast2Coast. Just depends on if the dealer your speaking to wants to sell a car for less of a margin to get the sale.

True, my buddy bought from Bavarian for years until he started shopping around. Consistently buys from BMW Park Lane or TRL Deals now as they give him considerably better discounts. His current X3M was 12k off list with delivery miles.

 

[KevM]

11k reduction? Shows what profit they are potentially making if they can drop that much.

Wat???

They are losing a fortune of money on the car. Not discounting their profit lol

 

[gpaevo]

Thats the RRP list price you're looking at on that one but yea there are some serious discounts off list on some cars. There are 52 brand new RS4's on Autotrader!

It's was the RRP that shocked me. I remember when RS4 was circa 45k rrp. But then again, new M3 is (was) 90k . Nuts

 

[Graham2]

If a new Golf R is £60k list then I think an RS4 at £70k is a bit of a bargain!

 

[Chris100]

Even Porsche have been discounting, offering contributions or both.

That has never been my experience with them, previously they would give you a price and you could take it or leave it, zero negotiation.

There were some serious discounts on stock panameras and deals on new Taycans.

 

[Burt2000]

Wat???

They are losing a fortune of money on the car. Not discounting their profit lol

How do you know for sure they are losing money or discounting profit

 

[KevM]

Sorry, I re-read that. Its a brand new car, so its not really relevant to the Used car bubble.

A new car can be whatever price the manufacturer decides they want to ask for it! They'll just throw support at the RRP to get it registered

 

[Burt2000]

Explain then
Genuinely interested to know what the cost price is from manufacturer to the dealer on a new car. I doubt anyone who worked for Audi would disclose that information though.

 

[Chris100]

Explain then
Genuinely interested to know what the cost price is from manufacturer to the dealer on a new car. I doubt anyone who worked for Audi would disclose that information though.

The gross margin will likely be different between manufacturers, and new vs used will definitely be different from dealer to dealer.

But I would say, 20 to 25% is fairly likely.

 

[big_pete]

When I was in that line of business our margins were around 10%.

*edit that was used cars up to about 15k.

 

[KevM]

They've reduced the RS4 by 12% off RRP. That's not a huge percentage off a new car.

Back when I did actually sell new cars, we chose what price banding/discount percentage off RRP to operate on annually. The Dealer could either choose to either make money per car, or take an extra percent or two, & undercut local competition to go for volume.

New car margins generally end up slimmer than what you'd think, but dealers will get volume bonus's based on registration targets etc and Customer Satisfaction bonus which can make it worthwhile. The Used car market is what usually makes the most profit.

Last year, when New cars were in short supply, new car dealers probably held onto the standard Manufacturer support, because they could. That certainly wasn't normal circumstances.

 

[Graham2]

The gross margin will likely be different between manufacturers, and new vs used will definitely be different from dealer to dealer.

But I would say, 20 to 25% is fairly likely.

Not on a new car I wouldn't think. A Google search seems to suggest an average of 5-7%.

 

[Chris100]

Not on a new car I wouldn't think. A Google search seems to suggest an average of 5-7%.

Based on what Porsche were offering me as a trade in price, and what other Porsche dealerships had similar cars up at, it was a 20% markup. I appreciate that they would have costs to come out of that, but it wouldn’t be taking them down to 5%