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Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 10:57 am
by Mike Nel
By now we all know that fuel is going up by a truckload next month.
I also heard a rumor that interest rates will increase by 50 basis points very soon.
Inflation will also increase.
So. With all these increases, will second hand car prices drop, especially gas guzzlers, as many people will seek cheaper alternatives to drive with.
I made a rough calculation. FJ vs Corolla.
15000km per year @ R20 per liter petrol
FJ would have used 2500 liters of petrol which is R50000
Corolla would use 715 liter of petrol which is R14500
I am sure many other people are doing the exact same math and will be offloading their gas guzzlers soon leaving the second hand market potentially flooded
What do you think?
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 11:05 am
by Mad Manny
Using the example above, the FJ owner needs to decide whether selling his FJ and buying a more economical vehicle is worth the R35 000 saving per year.
If he sells and buys for roughly the same price, it's a good idea, financially. (Providing the insurance costs the same or less).
If he sells the FJ and has to put money in for the Corolla, then probably not....
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 11:31 am
by AndreasR
But. Who would like to drive a Corolla.
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 11:58 am
by Mike Nel
Mad Manny wrote: ↑Wed May 18, 2022 11:05 am
Using the example above, the FJ owner needs to decide whether selling his FJ and buying a more economical vehicle is worth the R35 000 saving per year.
If he sells and buys for roughly the same price, it's a good idea, financially. (Providing the insurance costs the same or less).
If he sells the FJ and has to put money in for the Corolla, then probably not....
It was a good idea. But let's focus on the Question at hand.
Will we see a drop in 2nd hand vehicle prices with all the mentioned costs that we will soon see?
I think we will
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 12:01 pm
by AndreasR
No we won’t because there is still a huge shortage of new cars in the market therefore a shortage of stock therefore high prices.
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 12:13 pm
by Ricof4e
Mike, I had this very same discussion with an actuary friend of mine. In the short to medium term (next 9 to 18 months), not really.
In any event, it also depends on your current financial position. If you have a FJ which is fully paid or will be paid in full the next 18 months, it would make little sense to sell it and take out a loan for a new vehicle, however frugal it may be.
In short, don't make debt for the next 2-3 years.
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 1:51 pm
by jakeslouw
I doubt it. Prices hardly ever go down.
5 years ago I could pick a Nissan Patrol up for peanuts. Now you can't find one for a decent price. And as the EV vehicles start dominating the market, ICE vehicles with some class will just get more scarce and hence more expensive.
If you sell a decent Patrol or even LC now you're a fool. Try find an Old Defender for any price.
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 3:29 pm
by grips
Mike Nel wrote: ↑Wed May 18, 2022 10:57 am
By now we all know that fuel is going up by a truckload next month.
I also heard a rumor that interest rates will increase by 50 basis points very soon.
Inflation will also increase.
So. With all these increases, will second hand car prices drop, especially gas guzzlers, as many people will seek cheaper alternatives to drive with.
I made a rough calculation. FJ vs Corolla.
15000km per year @ R20 per liter petrol
FJ would have used 2500 liters of petrol which is R50000
Corolla would use 715 liter of petrol which is R14500
I am sure many other people are doing the exact same math and will be offloading their gas guzzlers soon leaving the second hand market potentially flooded
What do you think?
Yes I do think many is going to sell fuel guzzlers vehicles. It happened during the 70`s with the fuel rationing.
However I think that most will cling to their purpose use 4x4`s,
I am thinking in buying something better on fuel as a third vehicle for Karin. My greatest concern is road conditions. Small tyers and potholes does not go down well.
I can remember that V8`s almost became absolute during late 70`s. The likes of the Ford Fairmont GT`s, Holden Monaro`s and Chevy SS all saw end of production in favor of smaller more economic models.
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 4:23 pm
by jakeslouw
grips wrote: ↑Wed May 18, 2022 3:29 pm
I can remember that V8`s almost became absolute during late 70`s. The likes of the Ford Fairmont GT`s, Holden Monaro`s and Chevy SS all saw end of production in favor of smaller more economic models.
And we should have bought them all and warehoused them...........
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 4:58 pm
by BushWacker
… I think there will be an ongoing increase and price escalation of ‘ after costs’ to owning a car. Ie essential/prescribed service and replacement parts at increasing frequency.
eg this weekend we had some discussion on DPFs
that have / will increasingly replace catalytic converters.
DPFs evidently will need replacing everyy 3-5 years depending on usage etc and depending, may cost R 15000+
Manufacturers will increasingly sell cars that ensure increasing and ongoing annuity income for themselves…
(… notionally increasing their Embedded Value !?)
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 5:12 pm
by Ricof4e
grips wrote: ↑Wed May 18, 2022 3:29 pm
Mike Nel wrote: ↑Wed May 18, 2022 10:57 am
By now we all know that fuel is going up by a truckload next month.
I also heard a rumor that interest rates will increase by 50 basis points very soon.
Inflation will also increase.
So. With all these increases, will second hand car prices drop, especially gas guzzlers, as many people will seek cheaper alternatives to drive with.
I made a rough calculation. FJ vs Corolla.
15000km per year @ R20 per liter petrol
FJ would have used 2500 liters of petrol which is R50000
Corolla would use 715 liter of petrol which is R14500
I am sure many other people are doing the exact same math and will be offloading their gas guzzlers soon leaving the second hand market potentially flooded
What do you think?
Yes I do think many is going to sell fuel guzzlers vehicles. It happened during the 70`s with the fuel rationing.
However I think that most will cling to their purpose use 4x4`s,
I am thinking in buying something better on fuel as a third vehicle for Karin. My greatest concern is road conditions. Small tyers and potholes does not go down well.
I can remember that V8`s almost became absolute during late 70`s. The likes of the Ford Fairmont GT`s, Holden Monaro`s and Chevy SS all saw end of production in favor of smaller more economic models.
12-13km/l
Re: Will we see a drop in over inflated 2nd hand car prices?
Posted: Wed May 18, 2022 5:29 pm
by BushWacker
Overseas , namely Nthn Hemi countries are and will
dump their litre-eaters and even slightly aged vehicles and many of such will no doubt be increasingly routed to the developing world / Sthn Hemi etc eg Zim, Bots & Moz etc but not to SA where our Govt shelter our protected, uncompetitive and border-line car industry and market.
… so even Wessel might sell his 200 Series for the same price even though his fuel tank will assuredly be completely empty.