Do You Think The New Car Market Will Soften Anytime Soon?

GourmetFoodie on 28/10/2022 - 10:50
Last edited 28/10/2022 - 12:42 by 1 other user

So I’ve been waiting to buy a second car - either brand new or 1-2 years old - since the start of covid. We were literally about to buy in Jan/Feb 2020 and we got busy moving house then Covid hit.

It’s starting to get impractical surviving on one car but I hate buying anything without negotiation power. Does anyone think the market will soften anytime soon? I reckon we could survive 6-12 months more but obviously I know even once you buy there can be 12 month delays for delivery (if new) - though we would certainly consider second-hand options too but that’s just as bad at the moment with respect to pricing.

What’s everyone’s take?

Poll Options

  • 80
    Yes - I expect car prices to fall within 6 months
  • 303
    No - you’re dreaming, prices will stay high
Automotive

Comments

  • geekcohen on 28/10/2022 - 10:55
    +5

    Soften as in prices going down? If anything, prices are going up. I know in this NFY prices went up.

    As for delivery, depends on the make and model. My wife had hers in 3 weeks because the dealer had been allocated what we wanted on a ship that was arriving.

    I know that you could go to my local Ford Dealer and get a new Ford Ranger Bi Turbo no problem. But if you wanted a V6 model, that's a 12 month wait (if not more for a Raptor).

    • Kangal on 30/10/2022 - 00:13
      +2

      With the greed from USA infecting most nations, inflation is going to be a factor moving forward. I would be expecting a +20% price increase in most goods and cost of living. At least for 2023 compared to their 2019 prices. Those figures could steadily keep climbing as (low productivity) GDP continues to suffer, with excess printed cash being abused by the top wealth holders.

    • HeWhoKnows on 30/10/2022 - 20:47
      +6

      Just wait till the RBA drives the country into recession
      Then everything will "soften"

      Even OPs desire for a 2nd car.

  • The Delray Misfits on 28/10/2022 - 10:56
    +29

    interest rates are gonna go up further (at least until march 23')

    i expect the used market to be flooded with cars as the rates start to bite, therefore decreasing the prices

    its already happening to an extent

    • geekcohen on 28/10/2022 - 10:58
      +5

      i expect the used market to be flooded with cars as the rates start to bite, therefore decreasing the prices

      But with so much flooding (water, rain etc) around, people will need replacement carts, so prices might hold high. Whilst there has been a drop because new car supply is getting back to good high availability, used cars are still in demand.

    • Mokr on 28/10/2022 - 13:41
      +8

      The best time to buy used or new was the beginning of covid.

      • Brianqpr on 29/10/2022 - 16:49

        Agreed, picked up a new and second hand car then. Both would cost quite a bit more now.

      • Daddy Chill on 29/10/2022 - 22:02
        +4

        Agreed. Bought a holux for 45K sold it 2 yr for 80k

  • Drakesy on 28/10/2022 - 10:59
    +6

    Yes,
    Same with houses.
    Increased interest rates are there to take heat out of inflation/household expenditure.
    Secondhand car prices are coming back to earth. Before covid new car numbers were tanking and it's going right back there as we approach a recession, as supply comes back the demand and supply curve will normalise again.
    Tesla just dropped its RRP on Model 3's. They milked the pandemic as best they could, now it's time for a reality check.

    • 87percent on 28/10/2022 - 11:15
      +6

      Hope all those people who bought Teslas to flip them, can’t sell them

      • brendanm on 28/10/2022 - 13:38
        +4

        I'll buy one for $40k 😂

    • Geoffreys on 29/10/2022 - 08:40
      +7

      Isn’t that Tesla RRP drop just in China, and just enough to be eligible for the govt rebate that’s about to launch?

      • drprox on 30/10/2022 - 12:38

        Yep you're right

    • t_c on 29/10/2022 - 19:04
      +3

      Still 69k in Aus

    • nephilim on 31/10/2022 - 15:22

      Telsa will drop when Cupra and BYD can actually supply on mass those 50k electric cars they promised. At the moment, there is 12month waiting lists.

      • Drakesy on 31/10/2022 - 15:26

        *It's about 4-5 months on BYD at the moment.

  • pegaxs on 28/10/2022 - 11:01
    +14

    This is around for about the next 2~4 years. Manufactures need to cover the current backlog AND make more for the orders that are still coming in since the backlog started.

    Manufacturers also have no incentive to make more when they are making record profits and throwing massive price rises on their cars and people are still saying "shut up and take my money". They are taking the Apple marketing approach of "drip feed drives demand". They release just enough to keep the buyers hopeful and pump the FOMO.

    • Drakesy on 28/10/2022 - 12:18

      Don't forget though that the difference pre pandemic and post pandemic is that China has finally sorted out their production lines creating more competition and bringing down prices.

    • derrida derider on 28/10/2022 - 18:24
      +6

      The trouble is there is this really nasty thing called "competition" which means this strategy cannot be maintained indefiintely for cars, especially at the non-prestige end of the market. There is going to be plenty of production capcity online over the next couple of years - a great deal of it in China.

      To be specific, when the Shanghai lockdown ends we are going to be flooded with a variety of Chinese brands competing against each other as well as with the brands we're accustomed to. Many will be electric.

      I expect car prices in Oz - both ICE and EV - to nosedive sharply within the next couple of years. Trouble is we cannot say exactly WHEN this dive will happen.

      • Mokr on 28/10/2022 - 19:42
        +1

        Yes but I'm wonder when the west goes to war cold or hot against China.

        Lots of commercial partners have already pulled out.

        • derrida derider on 28/10/2022 - 19:55

          But not car companies. The Chinese car market is easily the largest in the world - no way anyone will pull their investments out from there.

      • Franc-T on 01/11/2022 - 11:26

        Im in the same boat as OP, but I WFH so not in a huge hurry. Invested in a solar system instead and will get a car in a few years.

        I reckon most used ICE cars prices will plummet when electrics become more commonplace.

        • Euphemistic on 01/11/2022 - 13:13
          +1

          when you start thinking ahead EV is better value, but at the same time you need to be able to buy a used EV for used car cost plus about 5yrs of fuel. Right now it’s hard to do that.

          • Franc-T on 01/11/2022 - 16:28

            @Euphemistic: I was going to buy a new Stinger GT, then decided on EV6 when released (this was before covid and providing the Cerato were just as decent as the wifes Cerato)….but WFH I cant justify a new car…of any sort

            But I cant justify getting an used for the prices nowdays….and I refuse to buy a shit-tier at my age

            Oh well it could be worse, I could need a car, but I really really really hate not having one

        • hazzad on 02/11/2022 - 17:50

          Except for this :

          https://www.cnbc.com/2022/05/18/ev-battery-costs-set-to-spik…

          Lithium shortages are going to cause prices of EV vehicles to rise over coming years.

  • Montyjpm on 28/10/2022 - 11:01
    +1

    Can someone lend me their crystal ball? Thanks.

    • capslock on 28/10/2022 - 12:56
      +9

      I can lend you mine but it only has an accuracy rate of 50%

      • WhyAmICommenting on 29/10/2022 - 14:33

        Not bad!

        • Euphemistic on 29/10/2022 - 14:52

          My crystal ball does a little better than 50% accurate but you’ll need to give me lots of information first and a payment probably improves the accuracy

      • idonotknowwhy on 30/10/2022 - 09:46

        better than mine

  • FoxJump on 28/10/2022 - 11:10
    -4

    You could tell people on fb marketplace that you'll offer them $price for the car where price is 50% of what theyre asking, and tell them you can pick it up THAT night, and pay in CASH.

    I sold my Prius C for $17k. I wanted $18k but .. meh. I advertised at $20k as thats what others were advertising as.
    i paid $24500 for it brand new in 2014.

    • Morien on 28/10/2022 - 11:17
      +33

      Also indicate that it's for your kid's birthday, and failure to close the deal will leave the seller responsible for ruining it.

      • jedimaster on 31/10/2022 - 08:40

        I am guessing there is a forum post on this I missed out on?

        • Chael Sonnen on 31/10/2022 - 09:24
          +2

          Don't think it's a forum post, but rather just a play on people using ridiculous sympathy pleas to negotiate discounts on Facebook Marketplace.

          If you're on Reddit, you can see a whole bunch of these examples on /r/choosingbeggars.

  • AndyC1 on 28/10/2022 - 11:13

    Where's the poll for Yes or No?

    • GourmetFoodie on 28/10/2022 - 12:42
      +1

      Poll added solely based on your request :)

  • Cluster on 28/10/2022 - 11:14
    +8

    Yes.

    Interest rates going up. People can borrow less and it costs them more.

    The only way to get inflation to go back to normal (2 to 3%) is to have an RBA induced recession. People will put off buying new cars.

    Supply chain problems are beginning to work themselves out. Some microchip markets are already collapsing in price due to over supply (RAM).

    It's ridiculous paying for a car and expecting delivery in 12 months. The only thing sillier is people paying more for cars with 30k km on the clock than brand new.

    • Mokr on 28/10/2022 - 13:40
      +1

      Yep used car market in USA is dropping in price. Though the aus market is much diff

      • spackbace on 28/10/2022 - 14:30

        Different market. Over there, new cars can be sold for over RRP, which would change how used cars are priced. Their new cars still have wait times

        • wackedupwacko on 31/10/2022 - 21:17

          New cars can be sold above the price you paid the dealer here too. It just depends on what car and the demand. Our wait times are arguably worse than US for a lot of things too. Have you seen the wait time for RAV4? (its 18months and still climbing).

          Its likely the US market will stabilise before we see any stabilisation especially if you're looking for a decent EV.

          • spackbace on 31/10/2022 - 21:38

            @wackedupwacko: Very rarely does dealer delivery get lifted here to pay more. Only for very limited models, but it's not widespread. Most manufacturers here have arrangements that you can't

            In the states even the ravs are sold over sticker

  • spackbace on 28/10/2022 - 11:16
    +12

    So wait, you waited to buy a car in the hope that you could negotiate? 😂 You realise that in the time you've been waiting, that car price has risen more than you could negotiate down?

    Unlikely the delays will change for 1-2 years given parts shortages are still a thing and they're creating a backlog.

    But one thing is for certain, the car prices are only gonna rise for a while

    • pegaxs on 28/10/2022 - 14:40
      +8

      You've logged into the wrong site. This is ozconfirmationbias not ozlogicicalthinking

      • sackrace on 31/10/2022 - 22:25

        Ozechochamber is just next door

    • derrida derider on 28/10/2022 - 18:33

      Wish I could have a little bet on this, because I think yuo are 100% dead wrong. Parts shortages, especially the critical electronic ones, have disappeared - in fact there is now a glut of some chips.

      The thing holding up car prices ATM is the big Shanghai lockdown, which is delaying the flood of cheap Chinese cars that will force other makers to stop dreaming. And that can't persist much longer.

      • spackbace on 28/10/2022 - 18:36
        +3

        Nope, not dead wrong, at least for the brand I work for. I don't need to go into detail to some random on the internet, but some models of cars aren't being produced due to a lack of parts.

        If parts shortage wasn't a thing, vehicle manufacturers wouldn't see their production numbers reducing.

        But hey, that's too many facts for an online forum…

        Thanks for the neg tho, classy

        • t_c on 29/10/2022 - 19:15
          +1

          One thing I find interesting, is pre-covid, Corolla finance was 3%ish, now it's around 10%, when they start delivering in 6-12 months, what's the cancellation rate going to be on the order books when ppl take a reality check, more so if they carrying a huge mortgage as well.

          • spackbace on 29/10/2022 - 20:54

            @t_c: That's already happened like 6 months ago

      • Franc-T on 01/11/2022 - 20:13

        Im not sure that there isnt still shortages (at least with fpga's and the like some of which are used in cars) so I would presume car companies are still running short as well

  • Euphemistic on 28/10/2022 - 11:42
    +4

    Just bite the bullet and buy. Prices are not going down, have you heard about inflation? The only time prices are going to drop is when they struggle to sell ICE vehicles because fuel is too expensive.

    Want to pay less? Get something older/smaller. It is what it is and it’s not going away soon.

    We’ve just been conditioned to get a discount on cars - meaning that they’ve always priced them too high. That’s the only thing ‘getting a discount’ means. It doesn’t mean you’re awesome at negotiating, it doesn’t mean they really want your sale it just means the price was set too high.

    No discount now means the market has decided the RRP is (almost) acceptable but everyone is butt hurt because ‘YoU’Re SuPpOsEd to GeT 15% oFf’

  • apple2016 on 28/10/2022 - 11:45

    More car manufacturers are moving to fixed price/ online shopping these days. Probably not a good idea to wait.

  • Benoffie on 28/10/2022 - 11:47

    Hopefully but realistically?

    Saw a 2017 Honda Jazz 17k granny owner go at auction yesterday for $18500 (before 16.5% premium). Watching the RAV4 market, 22 AWD Cruiser Hybrids with under 10k hitting 70k.

    Bargains are relative. Buy what you can afford.

    • SBOB on 28/10/2022 - 11:54
      +7

      22 AWD Cruiser Hybrids with under 10k hitting 70k.

      what insane person is paying that :/

      • Fredfloresjr on 28/10/2022 - 14:17

        That includes extra ps5 controller at the boot. So yeah.

      • Maxxjet on 29/10/2022 - 14:48

        The guy won the Powerball yesterday, only he can afford lolz

    • Euphemistic on 28/10/2022 - 12:30

      Saw a 2017 Honda Jazz 17k granny owner go at auction yesterday for $18500 (before 16.5% premium

      Is it really a bargain if you have to pay $3k in fees? There’s a few listed on carsales cheaper.

      • Benoffie on 28/10/2022 - 15:24
        +2

        Thats my point, the market is running stupid hot. OP waiting for a market decline or negotiation power wont happen anytime soon.

        Meanwhile, new car prices are increasing and the secondhand market is taking advantage.

        • Euphemistic on 28/10/2022 - 19:26

          Thought you meant that was a hopeful bargain, not a realistic high price.

          • Benoffie on 28/10/2022 - 20:02
            +1

            @Euphemistic: Nah, bargain would have been sub $10k given past markets. But thats just it, doesnt exist anymore.

            Certainly had to readjust my own expectations buying a new car recently 🙃

    • [Deactivated] on 04/12/2022 - 11:49

      My 2006 suzuki swift is a surprisingly incredibly nice car, for it's age. Drives amazingly well.

      Pre pandemic you could also get one for $4.5k, ~150,000km. I got it for $7,500. They were going for $11k for a spell, back down to ~8/9k.

      Could you even (profanity) imagine being a year 12 kid the last few years. Fresh out of locked down year 12 uni, no parties, no summer of festivals, no face to face uni, and absolutely no chance of buying a car. Even a 15+ year old beater.

  • Seraphin7 on 28/10/2022 - 12:52

    Unlikely to see significant softening in the next 6 to 12 months. If that is genuinely your timeframe, the probabilities are that general market conditions will be similar to those currently existent.

    Prices will soften only with resolution to supply side issues and/or major macroeconomic difficulty totally depressing demand.

  • [Deactivated] on 28/10/2022 - 13:17
    +2

    Purchase something thats either in stock or maybe even a demo vehicle.

    Theres 2 things that are guaranteed to happen (unless you buy a scummy Toyota or Hyundai cause it's already happened). The contract price is not the contract price until final payment, and there will be an 'adjustment fee' or some other weasel worded charge just so they can charge you more ($1500-3000) when their new widget cost 20c more from the supplier.

  • Mokr on 28/10/2022 - 13:37
    +1

    Cars will increase in price. New ones. Due to having to comply with euro regulation on polution. Aus doesn't have this.

    But will probably introduce it soon.

    In Europe the standard was not increased so cars won't rise as much.

    • 1st-Amendment on 28/10/2022 - 14:32
      +2

      Cars will increase in price. New ones. Due to having to comply with euro regulation on polution.

      More regulations means higher prices for everything, and you get what you vote for…

      Aus doesn't have this.

      But manufacturers won't be making higher polluting engines just for the Australian market so the rules in Europe mean more expensive things for us too.

    • Emerald Owl on 30/10/2022 - 13:55

      The regulations on pollution are way stricter in Europe

  • casho on 28/10/2022 - 13:42
    +1

    So you can last 12 months without the car? Sure you need it?

  • CurlCurl on 28/10/2022 - 14:19

    I know that you could go to my local Ford Dealer and get a new Ford Ranger Bi Turbo no problem.

    That could be no one wants them. A two litre milk bottle size engine!

    • Euphemistic on 28/10/2022 - 19:29

      People been buying plenty of Amoroks. Their base engine is a 2l twin turbo.

    • happydude on 29/10/2022 - 17:09
      -1

      I did see someone tracking second hand Rangers as they believed there was a correlation to tradie financial stress.

      The number listed for sale used is going up.

      • SBOB on 29/10/2022 - 17:49
        +1

        I did see someone tracking second hand Rangers as they believed there was a correlation to tradie financial stress.
        The number listed for sale used is going up.

        Could also correlate to cashed up tradies just upgrading to the new model and offloading their old ones (that they already wrote off due to instant asset write off for example)

  • Fredfloresjr on 28/10/2022 - 14:23
    +1

    Nah, bought my brandnew 2019 2.5l forester for 43k 3 years ago, and just renewed my insurance last week with AV of 51k lol.

    • mandelbrot on 29/10/2022 - 11:13

      Bro. 3 years ago is different to today.

      • Fredfloresjr on 01/11/2022 - 09:02

        Obviously, what I am saying is, I can fetch another $8k after using the car for three years. But anyway.

  • payless69 on 28/10/2022 - 14:42
    -6

    Globally the change towards EV's is faster than the makers were prepared to. Will Toyota ever wake up? Albanese is probably going to follow sleepy Joe and throw money towards fancy Mary B.
    Slow adopting countries also have to pay for their procrastination.
    Just like TV's, in so many years nobody even will know where their cars are made.
    Buy a diesel now and expect to pay over $3 a litre next year just to satisfy the greenies.

    • Drakesy on 28/10/2022 - 14:49
      +1

      Agree in that the lethargic European companies are rapidly losing pace with the Asians, be it Korea, Japan (maybe not Toyota or Subaru) or China. In 10 years time a Mercedes/BMW/Audi badge won't be worth anywhere near what it is such is the proliferation of decent cars coming out of China now.

      It was the coalition that hamstrung Australia lets not forget by claiming "EV's will ruin the Australian Weekend"

      Labor and Albanese have been pushing a pro EV stance for a while.

      • payless69 on 28/10/2022 - 17:06

        Yeah Coal Malcolm was a dirty fool to even bring that to parliament. Scotty was not even thinking anything at all!
        Still hardly any choice on the EV market. Europe has the Fiat e-500 bringing numbers. Merc is as usual dabbling at the top end. VW has to sort out what to do with all the ICE production lines. Plagued with endless software issues even die-hards give up their loyalty. Korea does ok and immigrant Musk is having a bit of a culture conflict with union plagued fancy rules. None of the rust belt states and Texas allow him direct sales. Everybody in the traditional media is jealous that he does not need them to advertise unwanted junk. So they take every chance to rubbish him.
        So what is your ev pick? A Chinese Volvo, a half baked German, a direct made in China, a Korean or something from the Musk think tank?

        • derrida derider on 28/10/2022 - 19:03

          China is gonna win this one. Even Elon Musk says they are the big threat to Tesla.

          Already they are selling as many EVs as the rest of the world combined. They're selling 6 million EVs a year in China alone (bearing in mind Australians buy about 0.9 million new cars a year of all types). And domestic competition in a massive market has very quickly driven those cars up the quality and innovation ladder - they're nothing like the crap they tried to sell us a couple of decades ago.

          Given they can't make enough for their home market yet it may be a couple more years until they get around to flooding backwaters like Australia with product. But flood us they will.

    • SBOB on 28/10/2022 - 14:52
      +5

      expect to pay over $3 a litre next year just to satisfy the greenies.

      wait.. greenies run oil refineries now? or greenies set oil companies pricings?
      Run me through this thought train….

      • payless69 on 28/10/2022 - 17:21
        -2

        In my neck of the woods the amount of diesel smoke is just crazy. If you can see it, have to breathe it in then yes it does get public attention.
        Just been to Europe and smoke over there is a no no. I must say: Never had a blocked nose, their air is spotless clean.
        Germans went over the top. You need to buy an environment badge even on a Tesla for the sake of it. France is talking about same work creation rubbish. They punish every diesel above 1.6l . They openly admit that raising diesel pricing has to do with unwanted pollution.
        Italians do buy every single Fiat e500 they can get their hands on. Even the Croats have an EV factory. Norway is super rich because of oil and has the highest number of ev's per head. In fact 9 out of the 10 top sold cars in Europe are electric.Models change every quarter, depending on availability. BP has sold every single one of their service stations. Shell is following suit.
        There are suddenly express movements to install wind turbines to avoid an energy crisis because of a conflict.

        • [Deactivated] on 28/10/2022 - 17:23

          Just like old times

    • derrida derider on 28/10/2022 - 18:47
      +5

      Na, $3 a litre diesel is not to satisfy the greenies. Its to satisfy the Arabs and Russians.

      • payless69 on 28/10/2022 - 22:16

        Some traders are concealing their religion. Sometimes petroleum products have for the sake of it trades or ridiculous transactions. Indirectly we are paying for war mongers so buying an ev can bypass some of it!

    • nobro25 on 29/10/2022 - 16:51
      +2

      I'm totally in for a EV if the starting prices are 20k not 50k for and EV.

      • Euphemistic on 29/10/2022 - 17:49
        +2

        Can you even get an ICE car for $20k

        • payless69 on 31/10/2022 - 04:18

          People buy the MG made by SAIC in China. Spends around 60% of its time at the service centre…..

    • [Deactivated] on 04/12/2022 - 11:53

      The immediate future isn't EV, it's "serial hybrids", and only nissan is going in on it big. The formula's already a winner in Asia.

      It's got a tank of petrol, with a petrol engine, but the engine is not connected to the wheels at all. It's purely a generator, running at a perfectly efficient, constant RPM as a generator for a mid sized battery. All the torque and maintenance benefits of proper EV motors, but a range of 1500km on a tank.

      This is the only practical near term option for Australian driving conditions/size/space between cities / total lack of private charging infrastructure. Mostly because the BMW i3 attempt at the concept is a) (profanity) ugly and b) Has a range "extender" motor, but still needs to plug in soon enough.

      The Nissan Note E-power is already out there as private imports, can't wait for the 2x new epower models coming in 2023.

  • tanksinatra on 28/10/2022 - 15:15
    +2

    With inflation as it is I suspect cars will get more expensive before they get cheaper.

    • ProlapsedHeinous on 30/10/2022 - 19:30

      They can only price their cars based on supply and demand. If/when demand goes down the gurgler, the money train is over.

  • fredz0r on 28/10/2022 - 16:08
    +1

    I hope not, I need to put food on the table. I can't see it slowing until the semiconductor/transport issues are sorted. Manufacture that I work for said this won't happen for at least 18 months and continue to raise prices. Orders have slowed this month but are still more than what we have arriving. The order bank keeps growing and growing.

    • spackbace on 28/10/2022 - 17:06

      Mits?

      • fredz0r on 28/10/2022 - 17:31
        +1

        Yer mate.

  • Bristhrifty on 28/10/2022 - 16:20

    I haven't done a ton of research about it yet but there was an interesting article in The Australian today titled "To optimise tax breaks on motor vehicles, the clear choice is EV" that includes "Best of all the soon-to-be passed Electric Car Discount Bill will provide employees with salary sacrifice, GST and tariff waivers on EVs up to $84,916 at a cost to the budget of $345m over the four-year forward estimates period. Under the terms of the bill, leasing an EV will be 100 per cent tax deductible, while petrol and diesel cars will remain only partially deductible."

    The tax deductibility sounds interesting - any tax agents that can confirm that this applies for personal use? This would help make a new car cheaper (if buying electric obviously).

    • derrida derider on 28/10/2022 - 18:50

      There's a long Whirlpool thread on this. The way to make it work for personal use is to have a novated lease from your employer, which most permanent employees can easily arrange these days.

    • OzFrugie on 29/10/2022 - 01:41

      Does it include PHEV?

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