Questions we are being asked on a daily basis. We have some answers but I sense the questions people are really asking are, should I be buying cars at the moment, is it right to buy cars at the moment and is now a good time to buy?
In the early stages of lockdown, we experienced high levels of equity release as people wanted to have a cash contingency for the unknown months ahead. As the weeks have passed, we have seen less of this as the roadmap for the year has a little more clarity. Many saw an opening, as trading softened there was a distinct wave of opportunistic buying from those who may be able to now afford a car that was previously out of reach or those looking to capitalise on destressed or fire sellers. We are still being asked if there are buying opportunities out there and we have been encouraged by the number of cars being sold albeit in the sub £100k sector.
So, where is it all going?
As an indicator, UK car production has fallen by 38%. When compared to a 3% drop during the Brexit uncertainty, you can make no mistake that the current crisis has severely damaged new car sales, now and probably for some time to come as part supply chains are disrupted and ordering a new car far from the top of consumer’s to do list. How will this affect the used car and collector car markets when forecourts across the UK are as packed as the proverbial can of fish. With little to zero supply of pre-registered, ex-demo, and 12-month-old cars, demand could outstrip supply later in the year as buying confidence returns, therefore strengthening prices across the board.
How does this impact classic or collector car sales where models are no longer being made? More than you may think. When a two-year-old 911 is seemingly expensive, buyers make the natural comparison of what else they can get for their money and when faced with a depreciating newer car or perhaps an appreciating older car, the smart money would say the latter. So, will we be seeing an increase in prices in months to come as consumers pile cash into collectable cars? Yes, perhaps. What does this mean now? Well, right now it is clear there is no shortage of supply, and sellers are keen to liquidate and move on making hay while the sun shines!
As we have previously reported, dealers are open for business and of course are keen to keep trading. While many have closed their showrooms to visitors, many have adopted innovative solutions to ensure they can keep trading. For those with workshop facilities, collection and delivery is being offered to keep servicing work busy and those selling cars are offering video calling to view cars and even delivering cars via a transporter for viewing. Dealers of course want your support and rely on it and with workshops and showrooms quieter than normal, I am sure you will receive the very best service and probably a good deal while ensuring you and their employees are safe.
Is it a good time to buy? One message we have never deviated from is the right car, at the right price from the right people – take a look at our trusted network of dealer partners. This remains true today and given the reduced level of trading, you may just find the price element is more favorable than ever. There are both dealers and private individuals who may not be classed a ‘distressed seller’ but releasing any capital they have tied up in cars may be a financial relief for sure.
Constant remains, as always, our business philosophy, with dedication to the needs of our clients. Through this pandemic we have remained open for business supporting your many questions and worries about how to manage your current and future agreements. We’re devoted and passionate about what we do and we are always here to support. As the longest established classic and collector car finance specialist we intend on being be the last one standing.