A warning to buyers - used values have returned to normal.

[kodiaqsportline]

I've been watching and reading a few articles about how the price of EV's have plummeted. Which get's me a little annoyed for three reasons:

 

1: These articles and videos are mostly by armchair expert speculators with no practical experience themselves, and

 

2. Why do people always use extremes as the norm ?

 

3. The forecourt prices certainly haven't reflected these recent drops.

 

For all sorts of reasons, used car prices have been all over the place since Covid struck.  One commentator blamed this, that and t'other for the price of EV's plummeting but really? Are the prices of used ICE and hybrids not plummeting too? Let's find out.

 

So rather than listen to these armchair experts speculate and look at their CAP value books which themselves are just guides, why not use a real world example to see how the market has chaged.  I sold our Karoq in the summer, so lets use that.

 

1. I bought the car Nov 2019 for a fraction under £25k after discount ( the list back then was a few quid under £30k.)

2. I sold the car to a large online retailer back in late summer 2023 for £22500.  That meant the car depreciated £2500 in 3.5yrs.  I of course was very happy,but new that wasn't normal, it was an insane price.  The retailer put the car up for sale at £24k.  That was 5 months ago, almost to the day.

 

3. I've just obtained another quote to sell that car - I added 2000 miles to the mileage as that's all it'd have done in that time. How much do you reckon the same dealer has quoted me online? £13825  😲  So in the past 5 months, our old Karoq has dropped £8675 in value.   Ouch !     These large price drops definitely don't just apply to EVs.

 

4. But it's not a horrendous drop, rather it's just the market returning to normal.  The car originally listed at £30k four years ago, and it's now worth say £14k which represents depreciation of around 45-49% - perfectly normal ( maybe a little better than normal considering it's a Skoda ). So what's all the fuss about used prices 'nose-diving' ?

 

Imagine having budgeted for a new car - you placed your order say 6mths ago, you're about to take delivery, and you find your current car is now worth around £8000 less than you thought it would be.  Ouch !!!

 

What about dealers - do we have sympathy for them, after all they may have stock they bought at a high price and haven't been able to shift. Err, not from me. I've just looked on Autotrader for cars similar to the car I sold and which I would have been offered £13825 if I were to sell it today. The dealers are asking from £20k for it. ( some asking much higher )

 

So one tip for anyone looking to buy a car right now, especially a used car, is know exactly how much it's actually worth. Yes the dealer may have bought it when the prices were high, then again,  they may have bought it recently hence there's a potential huge profit margin you can negotiate with. Some of the prices still being asked are eyewateringly expensive.   

Edited 7 January by kodiaqsportline

[OldKaroq]

15 hours ago, kodiaqsportline said:

I

 

1. I bought the car Nov 2019 for a fraction under £25k after discount ( the list back then was a few quid under £30k.)

2. I sold the car to a large online retailer back in late summer 2023 for £22500.  That meant the car depreciated £2500 in 3.5yrs.  I of course was very happy,but new that wasn't normal, it was an insane price.  The retailer put the car up for sale at £24k.  That was 5 months ago, almost to the day.

 

3. I've just obtained another quote to sell that car - I added 2000 miles to the mileage as that's all it'd have done in that time. How much do you reckon the same dealer has quoted me online? £13825  😲  So in the past 5 months, our old Karoq has dropped £8675 in value.   Ouch !     These large price drops definitely don't just apply to EVs.

 

 

Just to confirm.... the Nov 2019 Karoq price of 25k was the On the Road price that was paid, which includes fitted extras, delivery, car tax, VAT etc?

The "sold" price of £22,500 would be the equivalent of the On the Road price? 

 

If so thats 10% depreciation in 3.5 years - quite incredible! 

 

My 2018 Karoq was £20,840 Basic Price but the on the road cost was £26,170. I lost £7,900 on the trade-in  /  30% over 4.25 years which I thought was very good!

[Choclab]

I think that the reason dealers are still putting high prices on used cars, is because most people will not realise prices are dropping, and are prepared to pay the asking price. A bit like house prices locally to me. Sellers are putting high prices on their houses, “as mine is the same as theirs”, but you need to see the actual selling price. Two on my estate were up for £300k, but sold for £280k, however houses here are still going up for sale at £300k.

[pinkpanther]

19 hours ago, kodiaqsportline said:

I've been watching and reading a few articles about how the price of EV's have plummeted. Which get's me a little annoyed for three reasons:

 

1: These articles and videos are mostly by armchair expert speculators with no practical experience themselves, and

 

2. Why do people always use extremes as the norm ?

 

3. The forecourt prices certainly haven't reflected these recent drops.

 

For all sorts of reasons, used car prices have been all over the place since Covid struck.  One commentator blamed this, that and t'other for the price of EV's plummeting but really? Are the prices of used ICE and hybrids not plummeting too? Let's find out.

 

So rather than listen to these armchair experts speculate and look at their CAP value books which themselves are just guides, why not use a real world example to see how the market has chaged.  I sold our Karoq in the summer, so lets use that.

 

1. I bought the car Nov 2019 for a fraction under £25k after discount ( the list back then was a few quid under £30k.)

2. I sold the car to a large online retailer back in late summer 2023 for £22500.  That meant the car depreciated £2500 in 3.5yrs.  I of course was very happy,but new that wasn't normal, it was an insane price.  The retailer put the car up for sale at £24k.  That was 5 months ago, almost to the day.

 

3. I've just obtained another quote to sell that car - I added 2000 miles to the mileage as that's all it'd have done in that time. How much do you reckon the same dealer has quoted me online? £13825  😲  So in the past 5 months, our old Karoq has dropped £8675 in value.   Ouch !     These large price drops definitely don't just apply to EVs.

 

4. But it's not a horrendous drop, rather it's just the market returning to normal.  The car originally listed at £30k four years ago, and it's now worth say £14k which represents depreciation of around 45-49% - perfectly normal ( maybe a little better than normal considering it's a Skoda ). So what's all the fuss about used prices 'nose-diving' ?

 

Imagine having budgeted for a new car - you placed your order say 6mths ago, you're about to take delivery, and you find your current car is now worth around £8000 less than you thought it would be.  Ouch !!!

 

What about dealers - do we have sympathy for them, after all they may have stock they bought at a high price and haven't been able to shift. Err, not from me. I've just looked on Autotrader for cars similar to the car I sold and which I would have been offered £13825 if I were to sell it today. The dealers are asking from £20k for it. ( some asking much higher )

 

So one tip for anyone looking to buy a car right now, especially a used car, is know exactly how much it's actually worth. Yes the dealer may have bought it when the prices were high, then again,  they may have bought it recently hence there's a potential huge profit margin you can negotiate with. Some of the prices still being asked are eyewateringly expensive.   

This echoes my recent experience

 

My 2023 Karoq 1.5 TSi SE L has not met expectations,  so I was looking to move it on and just a few months back it was valued at circa £24k, whereas it's current valuation is just over £18k.

 

The car was £29.5k when new, so at 3 months old the quoted P Ex / value offered as a straight sale was effectively purchase price minus VAT. 

 

This correction applies across the board and will eventually trickle down to the prices asked for used cars,  but given how many dealers are financed they simply cannot slash many thousands of their used stock and hope to stay in business. 

 

I noticed the new price of the same model has risen considerably,  which combined with rising finance interest rates will no doubt impact new car sales ?

[BoxerBoy]

I’m one who’s moved to PCH deals for the third car in a row.

 

I decided that however you look at it, I seem to be “renting” a car.

 

So once I decided to settle on renting a car I don’t have to think about residual value. I just hand the car back.

 

VWFS always offer you the car at the end of the deal, because it saves them collecting it.

[kodiaqsportline]

6 hours ago, OldKaroq said:

Just to confirm.... the Nov 2019 Karoq price of 25k was the On the Road price that was paid, which includes fitted extras, delivery, car tax, VAT etc?

The "sold" price of £22,500 would be the equivalent of the On the Road price? 

 

If so thats 10% depreciation in 3.5 years - quite incredible!

 

Yes, quite incredible.  And add to that we wanted a small car just to run around town in so bought a little Toyota hybrid which mirrored the Karoq in price - listed at £30k and I ended up paying £25600 after discount ( was supposed to be £25k but there was a £600 hidden cost ).  £30k for that car was IMO ridiculous but even more ridiculous, used examples were being advertised in the mid 30's because it was difficult to get a new one. The market was bonkers.

Anyway, collected it in August so it cost me all of £3100 to change.  Fast forward to today. Toyota have reduced their PCP incentive from £1800 to £600  ( a long sotry but this makes settling a Toyota financial services PCP early, completely pointless ), and there's not as much of a discount on the car.  The best deal I can see that car for now is £27k, so with the Karoq being worth £12825, the changeover today would be £14175 😲

 

It's unbe-bloody-levable....  £14175 to change over today and it cost £3100 to change over just 5 months ago !

 

My Kodiaq was 3yr old in November and I had a quick look around to see if it was worth changing. I couldn't find anything suitable - I'm glad I didn't because the prices being asked for new / delivery miles cars was crazy. The Kodiaq has now come back to to 'normal' prices to now.  There would be absolutley zero chance of me changing that car now, or at least not unless I needed to.

 

I'm sure there are lots and lots of people that have been caught out buying when prices were inflated. And with new cars going up in price, depreciation is going to be eyewatering.

 

Everyone is in a different position and for me I've never seen the benefit of PCP, but I'll say one thing for it - at least you know how much is going out each month and the min the car will be worth at the end of term.

Edited 7 January by kodiaqsportline

[kodiaqsportline]

1 hour ago, BoxerBoy said:

I’m one who’s moved to PCH deals for the third car in a row.

 

I decided that however you look at it, I seem to be “renting” a car.

 

So once I decided to settle on renting a car I don’t have to think about residual value. I just hand the car back.

 

VWFS always offer you the car at the end of the deal, because it saves them collecting it.

 

You hit the nail on the head. As long as you look at it as a rental, then it makes sense.

 

However there's a caveat to that. I haven't a clue how PCH works, but lets say it would have cost me £300 per month for the karoq.  I had the car for 44 months so would  have forked out  £13200.  Buying it outright cost me £2500.

 

I wish there was one hard and fast rule we could all follow to find out what's best, but whatever way you look at it, it's a gamble.  I don't think I'd ever buy a Merc outright agan - I defo made a mistake there. I should have done as you say, and effectively rented.

Edited 7 January by kodiaqsportline

[Rory]

Dealers are making a lot of money at the moment from people who are forced, or are daft enough, to change their car.

 

I commented in another recent thread about "cancelling" our new Karoq order - what happened was we changed wife's old Diesel Tiguan for a nearly-new Karoq in the summer, paying, what I knew to be, a high price.  

 

At the same the dealer put an order for a new one so as to grab the hefty PCP incentive that was available back then.  Lead-time was 9mths.   Cost to change was estimated at £6K.  

 

They called just before Xmas as car was on its way (so months early) and cost to change is now £13K.  😕  (and that includes a couple of £K PCP contribution).

 

They indicated £18K for our Karoq - yet have a higher mileage, but othewrise identical, Karoq on the forecourt at £25,495 and Autotrader indicates that's a "fair" price.

 

 

And you mention EVs - Skoda dealers are lucky that they don't have to contend with many EVs, they only have Enyaq.   I've been told loads are being shifted on Motability, (although I can't say I'm seeing many around) but if it's true then the market will be swamped with them in 3yrs time -  big risk if buying with your own money.

Edited 8 January by Rory

[Rory]

19 hours ago, OldKaroq said:

Just to confirm.... the Nov 2019 Karoq price of 25k was the On the Road price that was paid, which includes fitted extras, delivery, car tax, VAT etc?

The "sold" price of £22,500 would be the equivalent of the On the Road price? 

 

If so thats 10% depreciation in 3.5 years - quite incredible! 

 

My 2018 Karoq was £20,840 Basic Price but the on the road cost was £26,170. I lost £7,900 on the trade-in  /  30% over 4.25 years which I thought was very good!

 

In looking to change our car, I considered a neighbours 2019 Tiguan 1.5TSi DSG that he'd paid £23,500 for by buying it through DrivetheDeal - he sold it to a trader for £22,500 in Aug 23.  He'd ordered a new Tiguan in mid-2021 for £30K and that was only delivered a few mths ago, but they held the price.  List on delivery was nudging £40K - he was nervous it would go over as it would bump up the VED.

[OldKaroq]

£23,500 for a 2019 Tiguan seems a good price - maybe a basic model, manual gearbox? We are unlikely to see depreciation of that level ever again!

 

I think I loaded the price I paid for mine with heated windscreen, heated steering wheel, 5 year warranty, spare wheel, metallic paint and some other extras. 

 

Holding the 2021 price was a decent and honourable thing to do! He did well.

[Rory]

1 hour ago, OldKaroq said:

£23,500 for a 2019 Tiguan seems a good price - maybe a basic model, manual gearbox? We are unlikely to see depreciation of that level ever again!

 

I think I loaded the price I paid for mine with heated windscreen, heated steering wheel, 5 year warranty, spare wheel, metallic paint and some other extras. 

 

Holding the 2021 price was a decent and honourable thing to do! He did well.

 

The 2019 Tiguan was a 1.5TSi DSG Match, I think the only options were metallic and power boot (although they would have added a grand to the list price).  Don't know what list would have been, but there was the DtD discount and a hefty deposit contribution at the time.   In 4 yrs it'd  only done 12K miles, and people do seem keen on  low mileage in the UK so that would have helped the value it sold for.

 

I bought the late 2015 (so last of the mk1's) Tiguan we had through CarWow for £24K and that would have listed at £30K with its options inc DSG & 4Motion.   DtD were cheaper, but wouldn't tell me who the dealer was and wanted me to wait factory lead-time.  As it was, we got the car in 8 days.

Edited 8 January by Rory

[Dazm]

I did my new order in march last year and they gave me a part ex of 24500 on a 2021 low mileage 1.5 sportline.  We buy any car were offering 25k so I felt OK with it.  By the time it arrived in September they honoured that with no query but we buy any car now were only offering 21k and today just over 19k. 

[Rory]

18 hours ago, Dazm said:

I did my new order in march last year and they gave me a part ex of 24500 on a 2021 low mileage 1.5 sportline.  We buy any car were offering 25k so I felt OK with it.  By the time it arrived in September they honoured that with no query but we buy any car now were only offering 21k and today just over 19k. 

 

I guess it's an unanswerable question whether the dealer would eventually find the deal unsupportable, but you might have been lucky your new car didn't slip out much further - as it was, I guess it came in earlier than expected?

 

Having said that, and I realise WBAC is just a reference point, but they've been noteably giving very low offers for some months now.   It's very much a worst case price from them - people are getting significantly higher prices from places like Motorway, and retail prices on forecourts are still pretty high.

[SurreyJohn]

On 07/01/2024 at 22:24, kodiaqsportline said:

 

You hit the nail on the head. As long as you look at it as a rental, then it makes sense.

 

However there's a caveat to that. I haven't a clue how PCH works, but lets say it would have cost me £300 per month for the karoq.  I had the car for 44 months so would  have forked out  £13200.  Buying it outright cost me £2500.

PCH is basically rental (lease).  However the monthly is often distorted by initial and final payments.  You have to add up all of them and divide by number of months to get true monthly

 

eg deal might be £1500 then 36 months at £400 then hand back add ons (excess mileage, damage to repair).  If you need to spend £300 on tyres and £350 to local chips away mobile to remove scratches, have to factor that in.

 

In this example total cost is £16,550 or nearer £460/month for 36 months.

 

Of course some (not very astute) people will only see £400/month, not realise they are spending £5500 per year or whopping £50k every 9 years.

 

 

[NottsIan]

The other issue with PCH (Personal Contract Hire) is that you don't own the vehicle or have the V5C. So if you want to take it out of the UK then you need a Vehicle-on-Hire certificate VE103B

Quote

If you want to take your car in another country, alongside your full, valid UK driving licence, you will need to fill in a Vehicle-on-Hire-Certificate (VE103B) form. 

The VE103B replaces the vehicle logbook, proving that the driver has permission to drive the car. This is a legal document which acts as an alternative to the V5C log book and gives authorisation from the finance provider (the owner and keeper of the vehicle) for the driver (you) to take the vehicle lease hire abroad. The VE103B contains the details of the vehicle such as registration number, make and model and etc. The form will also confirm the name and address of the person leasing the vehicle as well as the length of the contract.

To acquire your VE103B, contact your finance provider at least two weeks before you leave. 

 

I've never had a personal vehicle on contract hire but I've had company cars on it, and had to request a VE103B. It's not difficult and IIRC it lasts for a year but it's something to be aware of if you were thinking , I'll just pop over to France for a few days. Get stopped by the gendarmarie without it and you could be in deep do-do's

Edited 10 January by NottsIan

[BoxerBoy]

22 hours ago, NottsIan said:

The other issue with PCH (Personal Contract Hire) is that you don't own the vehicle or have the V5C. So if you want to take it out of the UK then you need a Vehicle-on-Hire certificate VE103B

 

I've never had a personal vehicle on contract hire but I've had company cars on it, and had to request a VE103B. It's not difficult and IIRC it lasts for a year but it's something to be aware of if you were thinking , I'll just pop over to France for a few days. Get stopped by the gendarmarie without it and you could be in deep do-do's

It’s certainly not an “issue”. Unless one is unaware of such a requirement.

 

I took my first Kodiaq to Europe after acquiring said document quite easily from VWFS.

 

Business as usual. 

[BoxerBoy]

As one who is both astute and numerate I’m very much in tune with the true annual cost of enjoying a car on my doorstep.

It comes down to what I deem “an acceptable portion of my monthly income”. Always has been.

 

A Kodiaq with extras certainly adds up to a big monthly number.

 

But, for me the advantage of PCH over both PCP and outright purchase is the absence of a whopping deposit that has to be found from somewhere. 
 

Like many of us here, I’ve experienced every mode of purchase over many years.

 

Who can remember when we saved up from our meagre income to buy that dream used car outright? 🙂

 

ps - having returned 4 lease cars between me and my wife I’ve never encountered any charges as I keep the cars in A1 condition. Though I have indeed enjoyed a CHIPSAWAY fix on a front apron gouge on last one. That made it A1 again.