New Vs Used Cars Is The Balance Shifting?

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  pao2x on 09/12/2020 - 00:08

  +6

  Yes used cars have caught up but it is kind of skewed data at the moment, because of covid. Covid also means you can't haggle much on popular models. No one smart enough with cars will buy a 4 year old car with 80k on it with only 30% depreciation

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  mskeggs on 09/12/2020 - 01:08

  +1

  Note new car dealers are much less open to discounts at the moment too, as production has been reduced due to COVID and demand to avoid public transport has risen.
  I think it is coming off a bit. Maybe after Xmas we’ll see prices moderate a bit.

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  AustriaBargain on 09/12/2020 - 04:51

  New cars are more likely to come with stuff like the latest Carplay and Android Auto features as stock, or wireless phone charging, etc. These may be stuff you can add yourself but I think people appreciate it built in because they've been building it into cheaper and cheaper cars. And when electric starts becoming the norm there will be no used market for them, everyone will have to get one new at first.

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  Euphemistic on 09/12/2020 - 05:12

  +1

  There have always been two types of buyers. Those that update regularly and feel they have he need for the latest and greatest tech. This doesn’t always mean new car, just newer. They will turn over cars every 2-4 years to update or so they don’t cop extra depreciation.

  Then there are those that buy a car to suit a purpose and only change when it dies, or when their circumstances change. Ie need extra tow capacity, or downsizing etc.

  The new car market plays on the minds of the new tech people who will pay more. The used market suits those just wanting suitable transport. The early adopters make it easy for others to get cheaper transport.

  No idea if this market is changing, but I suspect the marketing works and that there is an increasing market for newer is better. Then again, even a 20yo car will have ABS, airbags and air con pretty much standard. Add in a new head unit for Bluetooth and other tricks and you’ve got most of the tech that really makes a difference.

  • 

    bobkin on 09/12/2020 - 06:31

    While 20 year old cars might list some of the same safety features as newer cars, the safety is nowhere near comparable. If you haven’t seen it before, see this ANCAP video of a 1998 vs 2015 corolla

    • 

      Euphemistic on 09/12/2020 - 08:46

      Safety isn’t just crash safety. Avoidance is far more important, handling, braking and visibility contribute more to avoidance than safety cells and airbags. The single biggest safety feature in any car is a driver with proper attention.

      Of course safety has improved over the decades but seatbelts, ABS and airbags provided a big step in safety, other stuff has been incremental and as such, a car one or two years newer isn’t a massive increase in safety rating.

      • 

        chartparker on 09/12/2020 - 09:46

        I've mentioned this in the past, but a lot of the improvements in crash performance have been done under the skin (passive safety improvements), and the advancement in tools such as Finite Element Modelling and virtual crash modelling is light years of anything we had 20 years ago. Even if you disabled ALL the active safety tech and pitted a current day Camry against one from 20 years ago (or even an old "tank" from the 70s), you'll find the occupants are much better protected in the newer shell.

        The old thinking used to be that solid = safe when the opposite is true. In a crash, you want to convert as much of that kinetic energy into heat and sound and divert it around the cabin and away from the occupants, which is what modern cars achieve with crumple zones and strategic strengthening. Getting into a crash in an older car is like running head first into a brick wall - all the energy goes through the car body straight into the passengers.

        It's such a hard thing to market though because your average punter doesn't understand or care about the months some determined engineer sat behind a simulation to reduce the crash energy by x percent. Plus it all depends on the manufacturer actually putting in the effort though - some models like Wrangler and Jimny perform exceptionally poorly in a crash because off road performance was a higher priority than crash safety, and why we have ANCAP ratings to point this performance out.

        • 

          Euphemistic on 09/12/2020 - 11:29

          +1

          @chartparker:

          It's such a hard thing to market though because your average punter

          … doesn’t ever imagine them self crashing. The marketers all prioritise fancy features and enjoying the open road. The freedom, the wind in your hair (despite 90% keeping windows closed), speed etc. not the reality of traffic queues and stopping for fuel.

  • 

    Diji1 on 09/12/2020 - 08:50

    I suspect the marketing works

    The country is literally controlled by advertising. You have brainwashed idiots losing over 600% more for power bills claiming they're paying less because "the private sector is cheaper than government".

    It causes a sort of stupor where people cannot connect basic logical things together such as advertising controlling them or losing money when power bills are cheaper.

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  AngusD on 09/12/2020 - 08:55

  I recall reading a while ago that the price of used cars has shot up because of COVID limiting the supply of new cars. Which, presumably, is also propping up the price of new cars so you might not be able to haggle the same kind of discount off RRP on a new car that you used to be able to. But yeah, fewer new cars available means fewer cars getting traded in, which is limiting the supply of used cars.

  I wonder if the welcome trend towards longer warranties on new cars (now 5-7 years for most except for a few Euro brands still desperately clinging to their 3 years) is also starting to have an impact? I know some people keep their car for the duration of the warranty so they've got peace of mind it won't cost them anything beyond regular servicing etc. Once the warranty is up, they trade in for another new one with a new warranty. If that last changeover suddenly had 5 or 7 years warranty instead of 3 years, then they may be holding onto it for a couple years longer than previously. So those cars that might have been getting traded in now will instead be showing up on the used car market in a couple of years when those warranties run out.

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  Bid Sniper on 09/12/2020 - 08:57

  used market is bananas now, ex demo or new the way to go if you can get one. Prices of used way too high

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  SF3 on 09/12/2020 - 09:21

  I think it depends on where you live, are new cars (statistics) concentrated around certain post codes, at least that's how I felt depending on the suburb you drive through.

  5-7 year warrant reduce the risk of having issues with the car (for at least the life of the warranty) and you get the ‘latest features’ and tech and safety for that vehicle.

  Personally - I like to buy new with the mindset of what you mentioned.

  high end car brands like Mercedes

  haha… when you see some of the (signaling) posts on OzB forums on this… :D

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  FrugalDealHunter on 09/12/2020 - 09:46

  +1

  Some used vehicles are MORE than brand new (e.g Toyota RAV4) due to supply shortages.

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  StickMan on 09/12/2020 - 12:47

  +2

  Well just like we went from flagship phones being $800 to now $1500, it's the people who keep paying the money that allow the prices to creep up.

  Even outside corona, the list prices on 2nd hand car market have been totally insane. Sure, list isn't sale price, but when you have insane prices floating around people keep thinking that this is reality. Then when they sell their car, they also price it similarly. End result - slowly inflating insane prices.

  New car market is also $5-15K overpriced. The insatiable SUV craze, along with "huge car, huge engine, OK price" commy and falcoms leaving the market means the market has no 'baseline' to work off. Everyone is paying extra for a mildly lifted tiny hatchback with a tiny engine and is OK with it.

  That's how capitalism works - just keep increasing the price if everyone is okay with it.

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  netjock on 09/12/2020 - 13:25

  2019 cars are like $2k - $3k price difference from new. I'd buy new.

  It is going to be hilarious if things go back to normal and everyone finds out they are overstocked on cars. I'm actually worried about pets that have been bought as COVID19 exercise excuses.