Are prices due to crash?

[dspuk]

I find the will prices crash vaguely amusing, because they don't and never seem to have had giving this conversation seems to have been running for a decade or more.

Having worked in the car industry for 27 years RV (residual value) was the endless headache but for a Cali they RV's are so strong to be positive - as in you can make money at the best and lose nothing after 2 years at the worst.

Having flicked through AutoTrader for fun I note an FY22 that is almost the same age and spec as ours for 90K (we paid 68 after discount), meaning we could make 12 - 20K MORE than we paid. Better than stocks and shares. Even if that is over priced by 10K we are still in the black.

Hunting for ones the same as we paid ages vary wildly but it's anything from a 18 to 20 reg.

One things for sure - the ones winning the most remain the dealers.

I'm glad we bought when we did and given these prices the savvy move is to order a new one with a DTD discount and wait rather than buy used. Now. 5 years past. 5 years forward. IMHO.

 

[Elmo3]

Yeah, the Rolex guys say the same. Asking price is exactly that.

 

[calibeach76]

I find the will prices crash vaguely amusing, because they don't and never seem to have had giving this conversation seems to have been running for a decade or more.

Having worked in the car industry for 27 years RV (residual value) was the endless headache but for a Cali they RV's are so strong to be positive - as in you can make money at the best and lose nothing after 2 years at the worst.

Having flicked through AutoTrader for fun I note an FY22 that is almost the same age and spec as ours for 90K (we paid 68 after discount), meaning we could make 12 - 20K MORE than we paid. Better than stocks and shares. Even if that is over priced by 10K we are still in the black.

Hunting for ones the same as we paid ages vary wildly but it's anything from a 18 to 20 reg.

One things for sure - the ones winning the most remain the dealers.

I'm glad we bought when we did and given these prices the savvy move is to order a new one with a DTD discount and wait rather than buy used. Now. 5 years past. 5 years forward. IMHO.

Asking price. Anybody spending 65k on a Cali let alone 90k really needs their head examining. Your point is referring to asking prices now but look at supply levels, look at live auction prices and compare with achieved prices and those of 12 months ago.

 

[GrumpyGranddad]

Sounds like a good reason to sell the Cali!
We are in turbulent times. Very cheap money has gone and living costs are rapidly rising. There are people around who don’t think house prices will fall, despite mortgage rates which could easily be 3X come renewal time. I’d put folk who don’t think the price of a van will fall in a similar category.

No , not selling mine whatever happens to prices. Bought it for the versatility it offers, didn’t buy it to make money

 

[reserves]

No , not selling mine whatever happens to prices. Bought it for the versatility it offers, didn’t buy it to make money

But still checking its value on Motorway & WBAC…

 

[GrumpyGranddad]

Asking price. Anybody spending 65k on a Cali let alone 90k really needs their head examining. Your point is referring to asking prices now but look at supply levels, look at live auction prices and compare with achieved prices and those of 12 months ago.

Better than stocks and shares.

That’s for sure. At the moment anyway.

But still checking its value on Motorway & WBAC…

Only out of interest stimulated by discussions on this forum

 

[calibeach76]

No , not selling mine whatever happens to prices. Bought it for the versatility it offers, didn’t buy it to make money

That's great but the point here is be prepared for prices to drop...

 

[GrumpyGranddad]

That's great but the point here is be prepared for prices to drop...

Yes, I get that @calibeach76 but in my situation I don’t need to prepare for prices to drop. People only make a profit or loss at the point of sale and i’m not selling.

After my coffin has been taken to the crematorium in my California my kids might sell it though.

 

[Elmo3]

No , not selling mine whatever happens to prices. Bought it for the versatility it offers, didn’t buy it to make money

You may not be selling, therefore won’t be setting the price. Those who need to sell will be setting the price which is set on the margin. Those whose mortgage doubles and then can’t run to the £500 a month on the Cali and need it to go, they’ll be setting the price.

 

[andyinluton]

Asking price. Anybody spending 65k on a Cali let alone 90k really needs their head examining.

Why? How do you suggest someone buys a new 4motion cali without spending £65k+?

If you need a big comfy car what are the alternatives ?
Range Rover - starts new at £88k , 10 years time worth 2p
BMW X5 - Starts at £55k more like £65 once a few options on it, 10 years time worth 2p
Ford fiesta - starting price £18.5k, a better long term bet but not big enough.

In the 9 years I've been on this forum, there's always someone saying you would be mad to pay XXX for a cali, it usually happens every time there's a price increase.

New ones are not going to get cheaper, there may be bigger discounts but chances are they will be offset by price rises / worse exchange rate/ higher finance charges.

If used as a replacement for an expensive car, a Cali works out at good value for money & whatever happens to the market, I would expect a Cali to suffer less from depreciation than an equivalent price car.

 

[dspuk]

Seems to me the conversation is about "prices crashing" from an over inflated base. IMHO a Cali will always hold it's price. Some years a LOT better than others. But always held.

 

[GrumpyGranddad]

You may not be selling, therefore won’t be setting the price. Those who need to sell will be setting the price which is set on the margin. Those whose mortgage doubles and then can’t run to the £500 a month on the Cali and need it to go, they’ll be setting the price.

Possibly but how many people with Cali’s will be in that situation? There would need to be a significant number selling at a bargain basement price to influence the entire market.

BTW I’m not unsympathetic to those who might find their mortgage payments going through the roof. Was there myself way back when rates went north of 15 or 16%.

 

[Elmo3]

Possibly but how many people with Cali’s will be in that situation? There would need to be a significant number selling at a bargain basement price to influence the entire market.

BTW I’m not unsympathetic to those who might find their mortgage payments going through the roof. Was there myself way back when rates went north of 15 or 16%.

A lot have been bought on finance, most without cash cover I suspect. With other costs rapidly rising, it‘s a discretionary financial commitment which some will want or need to go away, particularly as jobs and businesses struggle. You may have seen your mortgage rate double to 15%, this time it could treble and more. Trouble is, many geared up and leveraged to the max at ultra low interest rates...

 

[GrumpyGranddad]

A lot have been bought on finance, most without cash cover I suspect. With other costs rapidly rising, it‘s a discretionary financial commitment which some will want or need to go away, particularly as jobs and businesses struggle. You may have seen your mortgage rate double to 15%, this time it could treble and more. Trouble is, many geared up and leveraged to the max at ultra low interest rates...

Totally understand what you’re saying @Elmo3 . Very difficult times.

 

[Elmo3]

Totally understand what you’re saying @Elmo3 . Very difficult times.

It is, and this time, they can’t slash interest rates due to inflation (largely caused by too much cheap money for too long and bail out after bail out). At some point, you have to pay the piper.

 

[GrumpyGranddad]

It is, and this time, they can’t slash interest rates due to inflation (largely caused by too much cheap money for too long and bail out after bail out). At some point, you have to pay the piper.

Agreed. Surprised how long the era of cheap money lasted.

 

[Borris]

The market is saturated with all leisure vehicles and the market will go pop in a big way. I have two friends in the trade and one who owns a very large specialist dealer supplying top end European models has been drastically reducing their stock over the summer to minimise exposure. They made their money over the last 2 years and are ready to weather the storm. With the affordability crisis leading nobody immune luxury products will be the first to go and as soon as the numbers going through the auctions creep up and dealers don't want to over stock there's only one way prices will go. We bought in April and sold in September for 10% more than we paid and had the use of it for the summer. That is good man maths.... I will wait with cash in the bank to buy when values return to sensible levels but will likely buy another a class as it will suit our family needs better.

"The market is saturated with all leisure vehicles and the market will go pop in a big way".
A bold statement!

I don't know how future values will play out but I am pretty certain that your prediction will not come to pass.

When things get tight, people naturally look to economise. Unless you are forced to sell then any camper van will continue to fulfill the purpose for which it was purchased in the first place. A purpose which should work out considerably cheaper than conventional holidays!

If you purchased as an investment, which IMO was risky, then you may not in future, see the same returns that have been seen in recent months. However that wouldn't be "the market going pop in a big way". For that to happen values would have to crash by tens of thousands per vehicle and it's my guess you will not see that or anywhere near that.

I imagine that most people owning these vehicles are comparitively well off and that in most cases, their main objective when buying would have been to buy into the freedom and lifestyle that comes with ownership and not as an investment. Rather than selling in a falling market I am sure most owners will opt to keep their vehicles regardless of their worth.

The fact that dealers are reducing stock to minimise exposure merely means that the demand for new vehicles is slowing down. I don't have a crystal ball but is it just possible that if a good percentage of owners aren't replacing with new but instead hanging onto their current vans, that second hand values might remain quite firm? Don't assume that just because the economy is going through a sticky patch and money for many people will be very tight that there will be a mass rush to off load leisure vehicles. Yes some will sell but it remains to be seen if it will make that much difference to prices long term.

 

[Looseboy]

I am a newbie and taking a huge jump in terms of spend on our first Cali. The economic environment is a worry but I did my research in Covid and planned for the purchase.

Having waited another year for arrival I dont plan to turn back now because prices may drop in the future.

I am buying a depreciating asset and had already made the decison that the cost was worthwile for a new lifestyle.

We are all in for a rough ride financially but whatever happens to the overall value I will be happy everytime I am in it and making use of it.

 

[reserves]

For context, this is the reality sometimes in these kind of markets.

I'm looking to buy a specific used car, I found someone who's looking to sell the car I'm after but they are not sure where to sell it etc.

He tells me he wants to get a little more than WeBuyAnyCar are offering

£63k - new price in 2021

£43k - WeBuyAnyCar price

He tells me he'll take no less than £59k

My point being that despite whatever the market is saying, people will always think about the price they paid for something, or what it was worth 6 months ago and will hold on desperately not to lose money.

A price shift will only come if people can no longer physically afford to keep their car / cali / house

 

[Corradobrit]

A lot have been bought on finance, most without cash cover I suspect. With other costs rapidly rising, it‘s a discretionary financial commitment which some will want or need to go away, particularly as jobs and businesses struggle. You may have seen your mortgage rate double to 15%, this time it could treble and more. Trouble is, many geared up and leveraged to the max at ultra low interest rates...

For some their Cali is their primary means of transport so hardly discretionary for those folks (me included). I don't see any potential downward price pressures being as precipitous as most other high end vehicles of a similar value.

 

[calibeach76]

A lot have been bought on finance, most without cash cover I suspect. With other costs rapidly rising, it‘s a discretionary financial commitment which some will want or need to go away, particularly as jobs and businesses struggle. You may have seen your mortgage rate double to 15%, this time it could treble and more. Trouble is, many geared up and leveraged to the max at ultra low interest rates...

This is my point exactly.

 

[calibeach76]

For context, this is the reality sometimes in these kind of markets.

I'm looking to buy a specific used car, I found someone who's looking to sell the car I'm after but they are not sure where to sell it etc.

He tells me he wants to get a little more than WeBuyAnyCar are offering

£63k - new price in 2021

£43k - WeBuyAnyCar price

He tells me he'll take no less than £59k

My point being that despite whatever the market is saying, people will always think about the price they paid for something, or what it was worth 6 months ago and will hold on desperately not to lose money.

A price shift will only come if people can no longer physically afford to keep their car / cali / house

Which is exactly my point and where I believe we are heading.

 

[calibeach76]

For some their Cali is their primary means of transport so hardly discretionary for those folks (me included). I don't see any potential downward price pressures being as precipitous as most other high end vehicles of a similar value.

It is discretionary at the price point it is because you could get something that does the same for a lot less...

 

[calibeach76]

Why? How do you suggest someone buys a new 4motion cali without spending £65k+?

If you need a big comfy car what are the alternatives ?
Range Rover - starts new at £88k , 10 years time worth 2p
BMW X5 - Starts at £55k more like £65 once a few options on it, 10 years time worth 2p
Ford fiesta - starting price £18.5k, a better long term bet but not big enough.

In the 9 years I've been on this forum, there's always someone saying you would be mad to pay XXX for a cali, it usually happens every time there's a price increase.

New ones are not going to get cheaper, there may be bigger discounts but chances are they will be offset by price rises / worse exchange rate/ higher finance charges.

If used as a replacement for an expensive car, a Cali works out at good value for money & whatever happens to the market, I would expect a Cali to suffer less from depreciation than an equivalent price car.

I standby my point that it is stupid money for a van. Comparing it to a range rover etc us ludicrous. Yes the Cali will serve as day to day vehicle and a cramped means for a holiday but thinking you've bought an equivalent is ludicrous. You've still bought an expensive builder's van.

 

[andyinluton]

I standby my point that it is stupid money for a van. Comparing it to a range rover etc us ludicrous. .

Why is it ludicrous? - its a means of getting from A-B in comfort with a big boot, whilst I understand that the Range -Rover has a number of shortcomings & doesn't come out too well in the comparison but what does compare to a Cali?