Guys,
I'm in the market for a car. Given the current COVID-19 situation, I was wondering if you guys had any idea when it might be good time to buy within the next 6 months? Will the car prices fall?
Looking at some previous threads, it seems like demand is likely to fall but this might be offset by the weaker AUD. Is there anybody working in the car dealership industry who might have better insight?
I'm thinking Mazda CX-9 or Kia Sorento GT.
Thanks
I have no idea so I will answer first.
I love this.
No it won't fall significantly.
The sale price of a car doesn't have significant margin after factoring cost of manufacture, logistics, distributorship and warranty. The fat is in minimising warranty recalls/claims and in the after sales services. If there is a significant reduction in price, it is done at a loss and is not sustainable.
The market value of a used car is somewhat pegged against the price of its new counterpart. The price of a second hand generally only drops because either the new car price has tanked or the warranty/manufacturer support has ceased.
The price of second hand cars, however, can increase if market supply reduces. This is extremely unlikely again for two reasons, one being that supply of second hand cars is pegged to the supply of new cars and because Australia already has some of the highest value retention of second hand cars.
Why not ring around and see what the prices are; ask for a 20% discount and work upwards.
I expect demand for many non-essentials will be tumble dramatically and 20% reduction to me would be an acceptable level.
IF the government included in their stimulus that individuals can purchase private cars up to $xx,xxx and 100% deduct that off their FY 2019/20 taxable income, that would have increased or at least sustained demand of cars, in this weakened and volatile market. I would probably rush out there and buy a new car is this was the case.
Plenty of cafe/restaurant owners are going to need to sell their mustangs etc. There is a chance that “low end” used cars will hold their price but “toys” will drop in price. And then there’s all the boomers with their caravans and tow “trucks”…
Mustangs being sold?
I'm interested, but only if its never been revved above 3k rpm
Based on the mustang driving cafe owners I’ve met, they’ll have been redlined every time they were sitting at the stop lights and an attractive female walked past.
Only in their private lane.
And then they take off and run over said female
It's all in the upgrades.
Yes….. and also Black.
Holden is on sale
So are cruises from Italy.
I nearly went for a full spec Colorado Extreme for $50k drive away. I reckon if I walked in there today and said $35k, I could win.
Let us know by cob today how you went.
Not in the market. If I buy, it would be for the Mrs. She wants a new SUV. Ute is close enough(?)
(I reckon if I install a colour matched canopy, I could actually go a few months before she realises.)
The question itself assumes you'll have somewhere you're allowed to drive in the near future and that you have a secure job. From your car choices I'm also guessing you have or are planning to have children.
For a single person with uncertain job prospects, a value-added personal asset is the last item you would buy, even if rather than instantly depreciating, they ran out of cars in 6 months and it appreciated in value. You would want something you could live in when lockdown ends and should things return to the old model, government payouts drop.
I can’t see them falling by much. If we all lose our jobs and are relying on welfare they might discount a bit to try to drive sales, but more likely new car supply will reduce as factories close down or reduce production. Less production might increase demand and therefore prices.
Then there is the dollar falling, which will increase the price of imports.
On the good side, finance rates might be lower.
I don’t think many people will be buying a new car right now until things settle down with the virus.
It's strange how car prices stay fairly stable given huge fluctuations in the value of the little Aussie dollar.
Cars won't drop in value as such, but you can strike a bargain:
I have to somewhat disagree with this.
Private seller cars. Top dollar was 2 weeks ago. No one is paying top dollar now. A car is the second last thing people will sell when they run out of money ( house last ). They aren't there yet, they will max out credit cards and redraw on home loans if they have one, once that is exhausted they will sell the car. A few months away yet.
Used cars and new cars from dealers, what is on the yard they have paid for. Sure they don't want to sell for less than they paid but they will when they are desperate. It's called stock liquidation. If you need cash you sell what you can at the best price you can, profit or loss.
New cars. Let's not forget there are cars on ships on there way here, ordered 2 months ago from factory based on pre virus sales volumes, when they land the factory is going to discount them to move them, they too are losing money, better to cash it out than have it sitting in massive yards near the docks. They will take losses if they have to. I also see all manufacturers are still trying to sell 2019 plated vehicles, we are almost 25% into 2020!!
If you need finance, the deals are only going to get better. Anyone willing and able to borrow will have the red carpet rolled out for them.
Hold off Choister May is the time to buy, that's whay I am doing.
Forgot to add, with all these businesses going bust auction houses will be full of fleet cars with no dealers there buying.
Yep agree. Hardly anyone is buying cars right now, and with huge overheads and the cost of holding a car in the showroom, dealers are going to be motivated to sell. Bankruptcy is a real possibility for a lot of dealers in the not too distant future, so I can see some serious discounting or liquidation sales happening. I think this applies to all goods. I think the right time to buy will be in about 2-3 months when the oversupply of stock (all goods) has got off the ships, and people just need to shift items to generate cash flow. The next wave of imports will be affected by the AUD crashing so deals wont be as good, and supply wont be plentiful.
I also think there is going to be a massive oversupply of tradie favourites. Self employed tradies aren't making anything right now, and the forecourts are brimming with Rangers and Hiluxes. Prices are still high right now, but without a market to buy those cars, the ass is going to fall out. The only thing that's sustaining high prices now is that tax credit, but if these lockdowns continue, there is going to be a big demand problem.
Where are you going to drive that car when we go in full lockdown? 🤔 That money will be better spent on Tps and other essentials rather than a depreciating asset that you will have no use for.
Up and down the driveway OP might actually own a house with a really long driveway
For a while I lived on an outback property that had a driveway that was over 12km long.
Sure but you don't need a 7-seater to do that.you should be going shopping on your own, not dragging the whole fam with you.
Really surprised that the consensus is cars won't be dramatically affected.
I think you will see a flood of used cars enter the market in the next couple of months as people liquidate whatever they can to pay essential bills. I think the leasehold companies will be very concerned as people do whatever they can to reduce regular commitments.
New dealers may choose to go without sales rather than discount, I suppose, but even they will still have to pay salaries and rent so there is a limit to how long they can pause their business.
I'd ask it a different way:
With many people unexpectedly losing their jobs, who will be buying a car at current prices or anything close? Even if you have secure jobs and plenty of savings, surely the current environment will make people consider holding off and keep an older car a little longer, rather than taking on new expenses when plenty of people all around are in massive financial trouble.
a flood of used cars enter the market in the next couple of months as people liquidate whatever they can to pay essential bills
90% of people in Australia are too reliant on their car to do this. There will be no flood, other than perhaps of enthusiast/second vehicles. A car is most people in Australia's greatest tool to getting to and from work, they can't afford to lose that now.
More than half of households have 2 or more cars. That is a lot of cars sitting in the driveway with unemployment ticking up.
I agree few houses with one vehicle will get rid of them, but that is only a third of households.
The same principle applies though. Houses with two cars likely need two cars under current conditions and will again after this crisis.
It would be stupid to liquidate an asset like a car for a period of a few months to a year only to purchase another after that period.
Also, people who might have the need for some quick cash (i.e. lower income people) aren't likely to have expensive cars worth selling.
The only thing I see as likely (other than toys being sold as I said before) is cars that are leased in some way or other possibly coming on to the market as people might relieve themselves of a monthly payment and buy a shit box.
As I mentioned, the car still owes the dealer 'X' amount. Like any business, they'll look to sell them off for minimal profit yes, but they won't suddenly lose massive amount.
Case in point, Holden's fire sale. How many people were disappointed in some of the quoted prices? And there's a brand that really had to shift stock!
That's true for a profitable business. Heaps of dealers will end up in liquidation. The market will decide the price of the stock at that point.
Stupid sockpuppets
If the dollar continues to fall I can see new cars at least costing the same or increasing (I expect that dealers may eat into margins to keep making sales?). I think there will be bargains in used higher spec cars as people will have some trouble paying and may need to offload as others have mentioned. I think cheaper, more reliable seeming cars will hold value better.
Everything…. money is KING
And you're the queen.
Quite simply the price of EVERYTHING will fall.
Forget the Recession which we are already in.
We are heading straight into a DEPRESSION!
Just look at the hundreds of thousands queuing at Centrelink already
Its going to get much worse!
Best advice is to hold onto any cash you have in case you havent figured that out already.
And whatever you do, make sure you pay down any debt FAST!
And definitely do NOT take on any new debt.
And if you havent figuresd this one out, all jobs are on the firing line now (with just a few exceptions)
Job security has just gone out the window.
I can see that the Kia Sorento GT prices falling on carsales, but the Mazda CX-9 Azami hasn't moved so far…
Lol. Give it a few months. Top of the range vehicles will take a big hit in terms of pricing.
Oppose to daily runabouts like corolla/camry should hold value well.
Not all cars, but bargains to be had for new, demo, and used.
New/demo, likely a slightly bigger discount. Due to lower margin to move car. Moving cars will allow the business to breakeven, or minimise loss. Wouldn't be hard to get new car on demo price (not a big diff, $1k to a few k).
Private used. Given the current situation, many are deem to loss their job/business. Reckon more people will be financially stressed in about 6 months. "Luxury" EU car and toy cars are likely the first on the chopping board. In fact, I was going to buy a second toy car this week because the price is a good few $k below normal market price. Didn't proceed as it will just sit in the garage for the next few months.
Dealer used. Similar to private used.
Timing, flexible and cash is your best friend. If you got the 3 prepared, just buy as a bargain pops up.
I am hoping to pick up a bargain new or demo later in the year. I would appreciate some suggestions and buying tips. I usually just browse carsales or call into local dealerships, but I am sure there must be a better way. My ideal car is a Mazda CX30, but I would also love some suggestions on good, cheaper alternatives. Thanks in advance.
I hear that Kia will be releasing new generation Sorento in the middle of the year! Will be on the lookout for this. Unfortunately no hybrid version unlike Korea.
I have no idea so I will answer first.
New car sales were declining before, (Not going say its name) so pool of used cars was also declining.
Perhaps now people will hang on to existing cars until the future is a little clearer.
On the other hand, some people may be forced to sell.
Weaker AUD will see prices increase and not help sales.