I dont know about others, but I am cost conscious when changing the family car every three years.I dont have pots of dosh to spend, have domestic commitments as priority, and buy a reliable saloon thats in good condition and three years old from new.
With petrol £1 per litre, there is a possibility that it could go to £1.50 ( so I am told in motoring mags).
Surely new car prices of expensive cars should theoretically tumble,(as well as second hand values) since who will afford to pay the capital cost, petrol/diesel, insurance, repairs of expensive vehicles? I am excluding Lottery winners, very rich, and adventurous who can afford to buy top range motors.
So would the sale of new 1.2 to 1.8 cc cars increase or decrease, and would the resale values between that range hold steady?
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>>since who will afford to pay the capital cost, petrol/diesel, insurance, repairs of expensive vehicles? >>
What makes you think that the vast majority of such people actually pay such costs themselves (apart from tax liabilities)?
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What makes you think that the vast majority of such people actually pay such costs themselves (apart from tax liabilities)? - - - - - - - - - - -
That's probably true but, even though it's still a very good deal, it doesn't half hurt when you see how big the tax bill is. I could have had a 'prestige' car as a company car but I opted out and bought it myself. I didn't really want to do this, but I'd have been paying £500/mth in tax, and I need a car for my job - it's not a perk car (OK, the 'prestige' bit is a perk, but I'd have to have a car of some sort, suitable for 30000 miles per year). I bought a similar level of car, but many of my colleagues downsized quite dramatically. That's a lot of Audi and BMW sales lost, especially if our experience is repeated elsewhere.
More generally, I think car sales are teetering on a knife edge anyway. There's so much choice now, and so much over capacity.
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There are still an awful lot of people who don't have company cars (or cars subidised by their employer), the vast number of retired people in this country being one such group.
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>>since who will afford to pay the capital cost, petrol/diesel, insurance, repairs of expensive vehicles? >>
I was talking about a private buyer who doesnt have use of a company car, but pays cash saved from his/her wages for a reliable vehicle for domestic non-business usage.
I dont see the point of a private buyer paying 30 grand for a 3 litre depreciating piece of metal when operating costs are so high. Some will pay,(like the groups I mentioned + fleet buyers), most private buyers wont.
My question was whether new car prices of expensive vehicles will fall due to fuel prices, and whether lower cc vehicels will hold steady.
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"My question was whether new car prices of expensive vehicles will fall due to fuel prices, and whether lower cc vehicels will hold steady."
With energy and steel (India and China again) prices rising, the costs of manufacture and transportation of new cars are going one way only. And plastics as well.
madf
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I had a colleague who always ran a large older car. He replaced it every time there was one of these fuel panics, when prices tumbled.
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All those lease and company car drivers won't be too bothered about the price of fuel. I don't suppose the list prices of new cars will drop but there are bound to be more and better deals as both private buyers and companies become more circumspect about replacing their vehicles.
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Whilst no one likes increasing fuel prices it's depeciation that is the hidden killer. Hidden that is until you come to change! For example I have looked at the figures for a 2003 Volvo S 80 2.4T SE with 50K miles. For Volvos these tend to have higher than usual Volvo depreciation and when new cost £25840. However these are, in my opinion desirable cars. Trade in value now is stated at £8057! meaning after 2 yrs or so a loss of nearly £18000!!. Don't Know how accurate the publication is but at these figures -- Wow!
The problem with depreciation against cost of fuel is simply that it's hidden and silent all the time you keep the car.
At 30K miles PA at say 30MPG with fuel at £4 per gallon(I like gallons) fuel would cost £4000 PA. At £5 per gallon (a substantial increase, fuel would cost £5000 PA or £1000 more. Now £1000 is alot but against the huge cost of depreciation looks small.
I think the moral of this must be if you are a private buyer and buy a large 'luxury' car new you must be mad! Buy a two year old one in good nick, now thats a bargain!!
Sorry - perhaps gone off the thread a bit!
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>>Sorry - perhaps gone off the thread a bit! >>
No, you are quite correct.
Fuel costs are smaller over the year than most people realise compared to other motoring expenses and outgoings.
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>>Sorry - perhaps gone off the thread a bit! >>
I'll second that. You are very correct. People appear to be overly fixated with fuel costs.
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Prices for luxobarges will fall from their already low levels to virtually being given away.
As there will be effectively be no deprecation these things make a lot of sense.
Incidentally what we have with the crude price is a capacity squeeze plus about a 20% premium due to speculation by the hedge funds.
Prices will drop to 'only' $35-40 next year and stay there.
I remember when crude was $12 a barrel and not that long ago...
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