Used Car Price Crash - Bad news for my Porsche or an opportunity for us all ?

What are the reasons for the used car price crash and what does that mean for my Porsche. Is it bad news or could it be an opportunity ? After several year of inflated values the used car market seems to be adjusting back to normal. In this video I take a look at what that means for Porsche and some other manufacturers that traditionally have had strong residual values.

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Video Contents
00:00 - Reasons for the Price Crash
06:10 - Impact on my Porsche
10:53 - Trade up to a Spyder or GT4 ?!
14:15 - EVs are in freefall !
17:17 - A good time to buy an M2
19:26 - MC20...OUCH !
21:23 - Ferrari aren't immune !
22:38 - My 2 dream Porsches !

#PetrolPed #Automotive #PriceCrash

[N.Wesselmann]

Car prices, in my opinion, are still excessively high. Reductions from previously inflated prices, like £200k for a used GT3, don’t necessarily equate to good deals. It merely indicates a shift from their once exorbitant prices. Even now, they’re more expensive than they were before the pandemic. A genuinely good deal would be something like a 2017 Audi R8, priced at its pre-pandemic rate, plus the normal depreciation rate over the past 3-4 years, and an extra discount for the current high interest rates.

Regarding new cars, it’s crucial to note that significant discounts were the norm in the past, barring the last few years. The return to such discounting isn’t extraordinary, particularly as these discounts aren’t much higher than pre-pandemic levels. What’s often missed is the excessive increase in new car prices over recent years, which appears to be more about exploiting consumer spending power than anything else. As a result, many cars are still priced much higher than their 2020 list prices or those of their predecessors, even after accounting for discounts.

I’m certainly pleased to see car prices beginning to fall, but I’d hesitate to call them bargains. The economic reality is that most people aren’t financially better off than pre-pandemic, especially considering the current recession, inflation, and high interest rates. For car prices to be truly attractive or indicative of a market crash, they’d need to drop well below pre-pandemic levels.

Furthermore, I suggest potential buyers wait a bit longer before making a purchase. A decrease in demand will inevitably lead to lower prices. It’s the basic principle of supply and demand that dictates pricing, not the actual value of the car. High-end models like Porsches, despite their premium price tags, are not overly costly to produce and are assembled relatively quickly. The market prices are still inflated, reflecting what consumers once were willing to pay monthly rather than the actual „worth“. With patience and strategic purchasing decisions, we might see more reasonable and affordable prices in the car market soon that might be real dealzz

[marks]

When I collected my GTS 4.0 in feb 2022, my salesman in Stuttgart said that I could
sell it right now for way more than I paid. ( I got a 6% discount back in 2020 )
After driving it through swiss and Italy it was so much fun that I didn't care about the figures.
The depreciation fact flew out of the roof, if there is any.
You can't beat smiles per miles 👍

[stevebatt]

It would be really interesting to compare used car prices with the pre-Covid prices. And surely the correct benchmark for prices would be to use pre-Covid prices less 4 years of normal depreciation. That might be an indicator of how much the current prices still need to fall to be realistic.

[harrysamwel]

I bought a demo (new) Focus ST in august 2023. Got a 21.5% discount on the car. Got it for about £29000. The car I traded in was Focus ST-line X estate 182ps almost fully loaded bought may 2022 new. It was originally priced just sniff under £30000 (todays currency), after discount I payed about £27500 for it. At the trade I had driven it 17200km. I got a fantastic price for it, £25950. The dealer put it for sale at about £28200.. Nothing happened for al most two months. Then in november they started to cut the price. First to £27000, then after just a week to the amount they payed me. Two more weeks and they made a huge cut to £22900. I was shocked.. What the hell where they doing! This wasn’t the end. Late december they cut the price yet again to £20600. Incredible! Now a week ago they removed the car. I was certain it had been sold. But the car has not changed owner. The market is just bonkers! I got my deal just at right time.

[jpscity]

It's basically prices recorecting...The whole PCP model was built on ultra low interest rates, the bubble has burst.

[philiphawkins]

Since 99% of cars are bought on borrowed money, as soon as interest rates go up the price must come down.

[mfordy]

New cars have just got ridiculously expensive but it all seems to have got to the point of how much per month someone can afford on pcp rather than the total cost. I get it, but for someone like me, I like to own my cars so call me old fashioned. Hopefully the prices will stabilise.

[robmayo]

It’s good to see a correction in the market. Flippers took the mick for so long it’s about time they took the hit 👍🏼

[Bazr]

My 911 turbo S cost 127k in 2019. Was 18 months old. In covid, it was worth 120k. Needed to sell last November 2023. Got 77k for it. Absolutely gutted. Will never purchase an expensive car again. Had sports cars since I was 18 years old. Finally, I learnt my lesson at 45 years of age

[CASFAN]

To be fair though, it’s always been the case that you get around a 20-30% depreciation hit as soon as you drive a new car off the forecourt. I do feel that there’s certainly been a resetting of the car market however, from the crazy prices we saw a year or two ago.

[classlessbozo]

Dealers must be panicking, their stock is depreciating at an alarming rate.

[andrewhurstcars]

Used buyers are the real judge of what a car is really worth - which can go either way. When manufacturers overprice a car, the used market isn’t pretty. Don’t forget Pete the online for sale prices you’re seeing are retail prices, so the actual loss to the car owner selling is much higher, as they will only be getting the trade value from the dealer - save for the instances where the dealer bought the car a long time ago, and is now making a loss. In a falling market their margins will be even larger to hedge against falling prices. For your estimated value of your car you mention, you probably need to knock off another chunk if you were to sell to a dealer.

[stephenlansley]

So new Audi RS3's seem to be depreciating slower than BMW M2's which suprises me.

[ChallengeStradalenf]

Good video Pete👍 remember the prices you looked at for the Boxster mostly retail, realistically your car will be late £40’s as a trade in they need a good margin to warrant car etc. Even if you get £48k, £14k depreciation in 2 years is good at this level. See how many 911 Turbo S are at main dealers and for how long! They have much further to come down to shift them. So many more S than non S turbos for sale, over supply.

[garethedwards]

I think another issue affecting the prices is the very big margin car dealers are making between the p/ex price and sale price

[ATPriceTracker]

Someone just showed us this video... that £90k drop on the Ferrari is a bloody good find! But there are even bigger drops to be found ;-)
Great vid.

[SY]

When a C63 with a 2litre engine is more than a £100k you know the world has gone mad. Buy a car and keep it for 10 years min is my motto. PS, shmee's Senna has reduced by £65k and still no takers. It is tainted history wise though.

[greatwhite]

When new cars were almost impossible to get people turned to used and sadly greed pushed all the prices of used cars through the roof and now the bubble has burst.

[nickhill]

The prices were artificially high owing to the factors you mentioned and really are only returning to where they should be.
Interest rates are causing savers to hang onto their capital and borrowers to not bother….both are impacting the car market massively

[stu]

I still think that there is further to drop, as nobody has confidence in the market at the moment and things are only worth what people think they are worth.

The prices were so over inflated by the waiting lists and the lockdown cash people had burning a hole in their banks. As a lot had worked from home and had nothing to spend money on, coupled with historically low interest rates a bubble began to grow.

Now rates have gone up along with cost of basic utilities, coupled with the fact that nobody has any money lying around there is a long way to fall.

Certain models such as the Porsche GT products have been produced in much greater numbers than previously so there are loads of cars about to ensure supply while demand falls.