Cars are more expensive, fuel is more expensive, road tax goes up, insurance never seems to get cheaper, houses double at the blink of an eye, barely any fresh fruit in shops... And yet wages don’t go up...
It certainly seems that way doesn't it? Though everything you listed are way more complex. There are bigger reasons why these things happen and honestly, you should learn more about economics and see what you can do for yourself rather than complaint.
I honestly don't think I'll be able to afford a new car when a bottom of the range Fiesta starts at £16,500. Not that long ago a brand new Civic Type R cost £19,000 in 2010. We are getting pushed into leasing.
Why “own” a car anymore anyhow, leasing is safer when governments can’t make their mind up right now on who to punish. If you get caught, you can just walk away from the car at the end. Leasing also doesn’t mean you can’t own the car after if you still love it in 4 years time.
@@samdurling6053 Agreed! I just got into a £43K from new bmw which is 5 months old for 35K with only 4K on the clock so practically new … let dealers take the biggest hit, shop about if specs are what you’re after. Never buy “New New” Optional extras are also a con as come to reselling a car they need to be near the RPI … sure they may increase it by a few 100’s but ain’t going to be by thousands.
Cars are getting replaced too frequently right now, higher prices would mean they are kept longer. Longer first ownership would push car manufactures towards better durability. Would also lower the stress on environment. In low income countries, some cars are in use for 40+ years, while in wealthy countries, 3-year leases are a norm. Doesn't matter how efficient the new car is, manufacturing a new car for one person every 3 years can not make up the difference
I wonder how that'll square with the shorter lives of electric car batteries (i.e. the whole car). The hassles that owners of 7 to 10 year old electric cars with dead batteries are going through, are alarming.
It doesn't matter if you buy a new car every 2 to 3 years so long as you sell it to someone and don't just throw it into the ocean. In the US the average car on the road is over 12 years old, there are many cars over 20 years old, and a fair number of cars are still on the road after 40 years.
I think it's also likely that EVs will last a lot longer (even the batteries, which are only losing an average of 10% range after 200,000 miles!), and with less servicing. "Buy once and forget"..! If this is true, it's a good thing. Very occasional purchase of a really well put together car that will last and doesn't need regular servicing is better for peoples' wallets, and much better for the environment!
Bike lanes don't exist, walking is too slow, public transit is underfunded. It's easy to price gouge when you've got a monopoly. People will pay to get around.
Profit is KIng! Wealth concentrates as the amount of poor increases. Oil is getting depleted, only the wealthy can afford cars and non-manual transport.
The danger of this strategy for manufacturers is that customers will be holding onto vehicles for much longer due to increased pricing. Manufacturers will then start dropping prices and over supplying cars again to undercut each other. As Rory explained, once a single manufacturer is less expensive than another they’ll gain business quickly. I do believe this is what made cars so cheap in the first place. Competition.
Joseph Y I don't think they will the'll be kept artificially high to encourage us to lease it's a more profitable model for them we all know us humans are like sheep .
They won't hold on to the vehicles though because most people can't afford to take ownership of a £30K vehicle, they just trade it in after their 3rd or 4th year PCP
2 года назад
The real danger for them is that Customers will remember brands trying to fuck em up, until Chinese manufacturers arrive with a proper customer service and their cheap
If only manufacturers started bringing some premium quality to their products alongisde the premium pricing. I'm talking about engineering and not the softness of the interior plastics that seems to be what people use to judge quality with these days. Mercedes sort of pulled it off many decades ago but I suppose if you can make £5000 profit on a new car every 3 years you wouldn't choose to make £5000 profit every 20 years... If this were to happen, I could see the move to focussing on more expensive cars as a positive change, though I am sad to see the discontinuation of smaller models as these can often be great fun. As it stands, we just get increasingly complex electronics covering up cheap white goods mechanicals.
Mercedes went into volume sales a couple of years before the new A Class was released. In my view the quality of finish and materials used went downhill. A car salesman lamented, some years ago, the demise of selling cars, his passion, with the advent of short term leasing, saying “People come in and say what they have to pay per month. You fit the payment to a car. No one buys cars anymore. It’s just selling finance.” When you look at the finance interest car manufacturers make more on that than the car given the exorbitant interest rates. When more expensive models are built and sold on leases the interest ramps up. Margins or high interest rates?
It’s well known that car manufacturers and especially the Germans have planned obsolescence. Enter the Japanese! Not many people realise how high the quality of engineering and reliability that likes of Lexus & Toyota have throughout their ranges.
@@kdcyp totally agreed. Too many people are too busy fanboying over the German brands rather than admitting the strengths of other manufacturers. For example if you ask the average German brand buyer he still thinks VW is a reliable brand and Peugeot are unreliable, even though Peugeot has been rated Europe's most reliable brand in 2018 and VW has consistently been below average in the past decade. They'll also diss Ford as unreliable crap, even though they consistently rank above VW. Cars have become nothing more than a status symbol rather than a functional purchase, and people are emotional as hell about them.
I think I might just move to Aruba and become a simple boat repairman and drive a 40 year old pick up truck. This country be getting too expensive for me :(
@@sakhawatrahman4961 Yes, but Tesla's strategy is to produce cheaper cars as soon as they have enough factory capacity. And they are building factories like crazy. Once Tesla has enough factories, prices will drop. Or smaller/cheaper models will be introduced into Tesla range. Tesla Berlin should come online by the end of 2021 flooding Europe with Model 3s and Model Ys. Once demand is lower than production capacity, expect price reductions or a cheaper hatchback Tesla.
I never read replies Always stupid virtue signallers needing to exhibit their superiority to drive the EV market. When a Peugeot is priced at over £30k it’s hitting Mercedes money which makes no brand sense. Tesla are trading in a crazy market under the illusion they’ll use their lease returns as driverless taxis. Let’s see if that happens. I’m doubtful the driverless car is going to be permitted given the rate of accidents. The business plan looks doomed.
He didn't even mention the inflation, which is actually responsible for majority of the price increase. The thumbnail has 2005 Golf GTI £20k (in reality 20,635) and 2021 GTI £34k (in reality 33,460), but £20,635 in 2005 adjusted for inflation is £31,606 in 2021. So that's just
@@brynleytalbot778 Wages also increased. Actually wage increase rate is higher than inflation rate. I don't know where you got the information of wage decrease...
The best car is a paid off car with no mechanical issues. My 2012 Mazda 3 will be paid off by the end of 2022 and I can't wait to save that money for better things like vacations, home theater upgrades, gifts, etc...
Make sure your timing belt, water pump, cam chain and tensioner plus oil pick up pipe are all in good shape and your mk6 will serve you well for years to come. Preventative maintenance is key for those engines
Pah, we'll just keep our old cars going longer. Pay some money to independent mechanics who live in our own towns and contribute to the circular economy where we live.
Mercedes give a thirty year warranty if serviced at a dealer. Expensive but cheaper than annual depreciation on a new car or monthly leasing. And, for me, I feel the eleven year old car I drive is better built and more economical than the new ones with poor materials and dubious consumption tests.
The trend to extended car ownership isn't new... and from a certain point, repairs are not economically viable any more. So while an individual may be lucky and avoid buying new cars for a while, a country as a whole cannot do so (unless it wants to end up like Cuba).
@@brynleytalbot778 ...trouble is that you can hardly predict if you can keep a car on the road for so long. What's a 30 year warranty worth if your country, county or town bans ICE engines or imposes ever higher restrictions? In my current home town, many Mercedes diesels less than ten years old were forbidden to enter the "Umweltzone", a very large chunk of the city where roughly half its residents live. That meant they had to be sold out of town at hugely discounted prices. So far, mainly Diesels were hit by that sledge hammer... but who'll be next? Frankly, it taught me to be wary about ever spending too much on buying a car.
@@brynleytalbot778 I hope it's not an 11 year old merc as I had one from new back then and it was the worst car i've ever had and that bad that I would never have one again
i needed to switch jobs due to an injury, i went from (after taxes) €2500 down to €1700 and then throw in rent €440 etc etc 😅 i will never be able to buy a car again, only lease.
Without consumers much of the false economy built since the fifties goes into reverse. The illusion is to create more Chiefs than Indians to maintain the consumption. But in the end companies will have no one to do the work that makes the goods. Wages at the bottom will have to increase whilst wages above are frozen. Or the imbalance in society will increase to a breaking point.
I just recently got a 2006 Scion tC from a Genuine company in UAE which is giving out 200 cars to 200 lucky people for free as a courtesy of Celebrating their 10 years anniversary and it's amazing honestly, I've already started modifying it and it's so easy to work on, intake and exhaust is a dream on these. Btw if you're talking first gen, they're actually good for 161 hp, not 180.
Not really. He didn't even mention the inflation, which is actually responsible for majority of the price increase. The thumbnail has 2005 Golf GTI £20k (in reality 20,635) and 2021 GTI £34k (in reality 33,460), but £20,635 in 2005 adjusted for inflation is £31,606 in 2021. So that's just
@@janbartos3020 I admit, the thumbnail was kinda poorly chosen. It gave the impression of covering inflation, which the video did not actually cover. However, seeing as the actual video mostly covered the current crazy situation, I won’t take my words back. 😊
@ Ján Bartoš But the video also showed an example of one car costing ~30% of an annual salary in 2000(whatever the year I can’t remember) and now in 2021 the same car costs 67% of yearly salary. Sure we might be getting more tech in the our cars, and the video didn’t cover inflation but cars now are more expensive compared to annual salaries than ever before.
@@holahovito11 In a nut shell; 1) Start your own RU-vid channel 2) Invest every penny and spare minute of your time into it for the next 7-8 years (helps if you're single). 3) Build your audience on RU-vid and Instagram by responding to every single comment and DM, post multiple things daily. 4) Purchase roughly 7 new BMW's of your own to feature on the channel. If this all goes to plan, you can ask the BMW Press department for a "free" BMW, but they will expect a load of coverage and exposure in return, you get that free car for a week.
If it wasn't serious I would find it amusing EU regulations are being brought in to improve safety whilst at the same time they allow cars to use touch controls which cannot be accurately/conveniently adjusted without taking one's eyes off the road.
Really good video. Honestly I don't find the idea of premium brands being less attainable in any way disappointing. Brands like Kia, Peugeot and many others are putting out lovely cars whereas the "premium" brands are giving us things like creaky interiors, very questionable styling and driving dynamics that really aren't any better (nobody finds an A45 more fun than a GR Yaris...). Not all premium cars are bad by any means, it's just that the less expensive options aren't any worse. Saying this from the perspective of having an expensive car now, my shopping list for my next car is mostly cheap stuff...plus perhaps a few more expensive things. It's a tough choice regardless of cost so if an LC500 is out of budget I'll get over it ☺
Hopefully one good thing that could come of this for consumers, is that owners might look after their cars better for when it comes to selling them. The amount of cars (even fairly new) at the moment that are covered in scratches, dents and wheels scuffed to hell, it hurts my soul to see someone not taking care of their motor
Not everyone is obsessed with keeping things looking like new. I drive a car with dents and scratches. They make no difference to the utility of the car, so why pay to fix them? I'd happily buy a tatty looking car with more power or toys, than a mint looking lower spec model.
@@MyMednas Because the same people who scratch and scuff their car are also the same people who don't change the oil, replace the timing belts, check for damage etc. It's simply a case of was the car well looked after or was it neglected and likely to break down once you drive off in it.
My 5 year old Citroen is now retailing for the same price I paid for it 4 years ago. My car’s 2nd hand value is now £2.5k more than it was in April. Crazy times!
@@victorc.979 That has to be the most petty and uncalled for correction I've seen on car-RU-vid in a long while. "Premium" and "Luxury" are the same damn thing. It's just marketing and Maseratis ridiculous need to overprice everything.
@@tyler9703 but it’s not. A Volvo S90 is a good premium car but you can’t compare it to Maybach or Bently nor Maserati. Alfa Romeo tries its best of being a BMW rival and always falls flat, love the engine in the 156 GTA though.
While the European car manufacturer are laughing by increasing their price , China are coming in with cheaper alternatives and the Japanese keep producing affordable alternatives
and Europe does everything to keep out the chinese cars for as long as possible and then add a giant tax on them. who would say only save €3000-5000 on a chinese car compared to the gold standard Model 3? most i know that isn’t interested in cars don’t want to buy (to them) an unknown Chinese brand and have no clue about their value in the used market. I would like to have the Xpeng P7 but Tesla or even Polestar is a safer bet when i would sell the car.
"Cars are no longer white goods" quote of the day. Currently running a 13 year old Mégane diesel that cost less than a grand and has passed every mot since new. As with every other car I'll be running this into the ground (maintaining it until it does die). Then I'll go out and find another cheap shed and run that into the ground. Cost per year? Pass. A full tank is 80 ish quid and that lasts 7 weeks. Branded tyres are 50 quid a corner. Front and rear discs and pads 110 quid. All work done by yours truly. Why buy a new car? Local knights BMW are advertising a 3 series for 350 a month. Oil service for 150. Stupid money. Second hand is the way forward. Rant over. Subscribed. Stay safe.
This is by far the best explanation I have gotten for the question I have had! My take away - high prices are here to stay - prices are not gonna come down magically in the near future! I have been watching videos after videos wanting to buy my first car at this crazy time. Your video was simple, precise and so resourceful! You hv got here another subscriber mate! 🍻
They need to keep the poor, poor. And keep the rich, rich. By quantitative easing they also decimate the middle class. Creating basically two classes. Rich and 90+% poor
spot on - when the BOE governor says it's "temporary" he left out the "because if it's not we're fkd". Base rate is our only "fix", and we can't use it without breaking the whole system because of all the BS that's been pulled since the sub-prime crash caused by greedy bankers and spineless, complicit politicians. Buckle up kids, the boomer-coaster is just getting started.
Lyrical Jaffacakes There will always be classes however the positive outcome is that middle class values will be forced to change improving society as a whole. For the rich wealth is relative rather than defined by the amount held which will impact a lot of wealthy people spending like crazy. That’ll impact the wealthy spend to display brigade who are promoting their middle class values. Three classes but in the middle class defined one a major change in lifestyles.
Apart from a few special cars we bought when the depreciation was at its maximum, we purchased another 2 car, about 4 years ago a Golf Mk2 Country Syncro, including fully restoring it's due us about 4k euros, this was instead of spending 7odd k on a newer SUV. This is only appreciating. About a year ago we spent a long time searching and purchased a daily driver 2006 Golf GTI, price 5k and spent 1k on servicing and replacing any items which may cause issues in the near future (we could have stretched to a mk6 but the benefits didn't add up). The GTI hasn't made us any money but for 6k euros we have a car which is like brand new and out performs most new cars. I could never understand how it makes sense to sign yourself into a contract which you are stuck in pretty much forever just to have a new car on the drive. So many friends when I lived in the UK would do this with both mortgages and cars and holidays then can't afford to go shopping or out for a meal. Turn off your tv, ignore your neighbours latest purchase and try to get debt free. I don't even have a mobile phone contract.
Excellent video. But idiots will argue you get more for your money which is false. In 2010 bought a new polo for 10k now we spent 20k for a new polo it felt like daylight robbery for the same size car.
One thing not touched upon and not really in the scope of this great overview is the impact of the fewer more expensive cars on the factory workers. Fewer cars ... fewer workers, shorter shifts, less overtime, less money. The other pandemic besides the big-Cs; chips and you know.
Wonderful presentation of the dynamic car market as it is today and the reasons of how we got there. Your relaxed 'delivery mechanism' is spot on. If I may say so, you are so much better here than you ever were on top gear. Please keep it up!
Me: thinks about this, worried about finding another car, looks out window and sees 2000 Corolla automatic with 213,000m on the clock still going strong. 👍
As long as the Japanese manufacturers don't lose their philosophy. They will always have strong reliability. I love seeing a well maintained Japanese car on the road. Makes me appreciate my Japanese _warrior_.
We sold a Ford Smax diesel a few years ago with 214000 miles on the clock, original engine, clutch, DMF, DPF Injectors, manual gearbox, last time I checked the MOT website it was at 242000 miles. All I did was drive it properly and get the oil changed every 13000 miles, so any diesel must be capable of alot more than a journey to the moon, I think most could do the journey back. I've personally driven 1.4 million miles in my lifetime and I've been surprised just how long cars can go on for
Agreed, I run a 10 year old Honda Jazz and a 30 year old Volvo 240. Both are 100% mine, utterly reliable, one is depreciating very slowly while the other is doing the opposite, both are simple and cheap to maintain and I can run both together for far less than one new car, as I'm not bolted into the dealer network for servicing and repairs. And together they cost me less to buy than the first year's depreciation on a new Ford Fiesta. I just have to live with the fact that I don't have a new car on the drive ( that I don't really own as its on PCP). Yep. I can live with that.
Not really. He didn't even mention the inflation, which is actually responsible for majority of the price increase. The thumbnail has 2005 Golf GTI £20k (in reality 20,635) and 2021 GTI £34k (in reality 33,460), but £20,635 in 2005 adjusted for inflation is £31,606 in 2021. So that's just
This is very insightful. I know about the chip shortage, the killing off of older models, etc. Was expecting those. What I was not expecting was the amount of substantiated planning to under-supply the market (at least relative to pre-pandemic levels) in the future. Great video!!
The conclusion is that the common man will have an increasingly harder time getting into cars So more public transport, which the government has control over
Austria just introduced an all day nationwide public travel pass for €3. But they have a Green Party pushing such progress. If we ceased the free market model of public transport we’d encourage more to use it and it’d give greater flexibility competing with car journeys. On getting into cars EV’s will destroy that given the pricing. The used car premium won’t persist so maybe cars will, in future, depreciate much faster. That’d ease the entry point. With distribution sites and manufacturing bases only accessible by car the need for cars at basic prices is a necessity. No cars, no distribution or manufacturing.
The car is by far the most government-controlled transportation system. Think of all the fines, tickets, road infrastructure, public parking, the license system, carbon taxes, plates, stickers, safety standards, bridges, highways, tunnels, overall traffic administration, and not to mention the government even bailed out the two biggest auto companies to avoid them going bankrupt in 2008.
There is also the weakness of the GBP Pound to consider in all of this (a good example of why the mk8 golf gti and r are so much more expensive than the mk7). Devaluation of Gbp means that car companies with a large EUR or USD cost bases have to charge more GBP for cars to make money
Because people don't buy cars anymore, they rent them through private leasing. Someone has said that rich people ask "how much?" and poor people ask "how much per month?" That's exactly the problem here, people "buy" more expensive cars because they don't buy them, they just go for whatever monthly cost they think they can afford with zero money down. Not a sustainable strategy, but there it is.
A very interesting and informative summary. The whole pricing situation makes me want to keep my car much longer than intended, especially with the big reduction in my mileage over the past 18 months.
You made some really good points, appreciate the work you put in. But one potential reason the prices in the UK have gone is the devaluation of the pound since 2016. Cars produced in Europe will obviously cost more when the currency is worth 20% less
Don't think you are quite right. The pound is holding its own against the dollar and euro at the moment. Predictions for the euro are a bit gloomy too.
@@phil8437 It has been fairly stable in the last year, year and a half, but look where the pound was in 2015, (that's when I moved to the UK) you'd get about 70 pence or sometimes even less for 1€, but in 2019/2020 you'd regularly get 85-90 pence for 1€, that's a huge difference
The pound peaked in 2014 against the Euro long before there was a referendum on the EU. To be fair the Euro is in trouble with the likes of ongoing QE and the ECB transferring Eurozone debt to themselves at between €18 Billion and €30 Billion per week to make member States debt not look that bad on the international World stage. Have you seen the debt in Italy, Greece, Spain and France? How long will the rich Northern European Countries like Germany and Netherlands keep bailing out poorer Southern European Countries? The Euro is like a House of Cards and will collapse and it’s only a matter of time. Meanwhile the Pound Sterling will still be here long after the Euro has bite the dust.
Went car shopping recently and 3 out of 4 dealers asked 'what's your monthly?' Car prices (not values) have done the same as housing, cheap monthly payments send prices higher. It's simple economics, if people cannot borrow cheap, they stop buying, stop buying and prices will fall
@@Z3t487 That is correct, what's wrong with buying a second hand car for 15,000€? Or put it another way if you want to buy a car for 100K you should have least 500K in the bank or in some other form of assets excluding your home. All these people buying cars on finance PCP or whatever are buying something they can't afford and can be a ticking time bomb! The only exception to cars on finance is if you have a profitable business and can set off the lease of the car for tax purposes.
If you are investing in a neo-vintage car (rather than a high depreciating one of course) then it can be solid investment to pay a higher % of salary Eg Vr6 golf, 205gti, 996 911, 968, Focus Rs, R5 turbo, Audi RS4 b56,, etc etc etc... have all appreciated and will continue to do so far outrunning any running costs and probably with app'n in line with your house @ c.8% a year
@@paulthorpe766 Sure investing in an appreciating asset is a different matter. Although I am sure compared to many classic cars there are better investments out there but at least you can enjoy a car. I still kick myself for not getting a 993 911 back not so long ago when you could pick up a nice one for circa £20 to 25K!
Depreciation and running costs are all that matter really. Some of the most expensive cars I’ve owned have cost me the least money in the end. Old out of warranty cars can be total money-pits
Great report. Succinct and to the point. Can't help thinking that a lot of this started to spiral out of control many years ago when the car industry started pushing customers into PCPs with 3-4 year turnarounds.
up to a point. at some point too high a price kills off demand. only few and unique goods does demand continue to increase with price, and mass produced cars arent one of them
@@socalguy829 Yeah cars are fairly price elastic, but in the short term they could get away with higher prices. Why wouldn't you focus solely on the market segments with the highest profit margins?
"We will consciously undersupply demand levels" Well, if they do so, they will either a) won't be preferred by the potential customers over their competitors that supply at adequate levels with an adequate price tag or b) will have to commit the crime of establishing an anti-competitive cartel with their "competitors" against us customers.
God this is depressing. I remember when I was 17 thinking that by the time I reach my current age I'd be able to afford a top of the range hot hatch. Cut to 13 years later and the Golf R STARTS at £42K. That used to be able to buy you a proper luxury car, not a family hot hatch. I have a decent job, I make almost twice the median UK wage, and I still can't afford a decent new car without literally channeling all my disposable income into loan repayments for the next 5 years. I can't help but wonder - who's supposed to be paying £42k for a golf?? And how many of these people could possibly exist?
Higher prices from traditional automakers will open the way to Chinese brands, like when they did with the Japanese imports and later with Hyundai/Kia/Daewoo.
Yes, higher prices of existing players always creates opportunities for new players into the market. The Chinese automotive industry have been readying for this for the last decade. Just look at MG and the Geely acquisition of Volvo (a premium offering but gives them working knowledge of the European market.
No it won’t, just means you ain’t driving a flash merc or BM anymore unless you can really afford it or a company is willing to up their car allowances …. Other companies will just fill that void.
@@R1ckmister What other companies? He is talking about ALL car companies in this report. Suppliers to all the car companies will suffer, some will be squeezed out, jobs will be lost permanently in the industry.
@@coolaa7 Jobs will be lost because cars cost more? Sure there will be less sales, but the market for maintaining existing cars will have to take up the slack. On top of that, the pressure to switch to EVs will boost the sales as well.
Nope. It's creates an opportunity for aftermarket companies to create more servicable parts for used cars. But these companies need exposure... Thus the British motorists will not suffer from profiteering from the "major manufacturers" It's a vision that Synchro Mech wants to achieve. 🧑💻
Merely history repeating itself,yes the manufacturers are laughing all the way to the bank now,but when the product can only be bought by the well heeled and not for the masses they will all fail,huge job losses will be inevitable which will lead to even fewer being able to afford their cars.Greed and capitalism at its finest
new car prices are stupid thats why leasing and pcp deals etc have recently become a big thing, its a way to get people into cars that they really cant afford to own because just finance doesnt cut it for the majority no more
Kind of a similar issue in the states, smaller cheaper cars are disappearing as most seem to want crossovers, SUVs and trucks, all which come at a premium cost over a similarly-equipped sedan/hatch (CUVs in particular)
I'm happy to keep my existing car unless I feel I can get a really good deal so feel free to price away. My old car is way cheaper to run, servicing and parts. The "power " still rests with the person who has the money, the buyer. That's the biggest reason EVs aren't selling in huge numbers and won't until the price is right.
"The "power " still rests with the person who has the money, the buyer." LOL, the buyer hasn't had the money for a while now, hence why most of the "buyers" are renters. It's called feudalism.
Very very nice presenting style, informative, knowledgeable, professional with just the right amount of humour. The rhythm of your presentation is spot on and you are one of my favourite presenters on RU-vid. Also I must commend you on the production of your videos, the time you must spend researching the factual content must be demanding. All in all well done and thank you very much. Regards Brian.
I've been driving the same car, E90 BMW for over a decade now. This convinced me to keep it a lot longer than planned. It's paid off and insurance is cheap.
Truth is many people are selling and arm and and a leg to get a new one on lease while they don't really need one at all. When you count how much ownage really costs per month it is getting harder and harder to justify the convenience/inconvenience of owning one.
I was surprised to see the comparisons were based only on list/cash prices rather than on lease/finance rates, because hardly anyone will (or can afford to) buy cars with cash these days. If used car values are going up, that means lower depreciation, which offsets higher list prices, so lease rates don't necessarily go up in tandem. Time will tell if buyers of new cars end up paying more in real terms but I suspect probably not. Reducing oversupply is great not only for increasing values, but it will also encourage longer ownership periods, which is no bad thing.
Pcp deals have made vehicles generally more affordable, nobody wants to own them after warranties have run out, to complicated, to expensive to put right! Hand the keys back, rent another one, eventually pcp will end up to much for most people.
Won't work like that. This video completely ignores how capitalist markets function. The only reason this is working right now is because literally every car manufacturer is beholden to the same supply restrictions. Ferrari can operate under that model in normal supply markets because they build a very premium type of product, much in the way a premiere restaurant can get away with charging extortion level prices. But that wouldn't work for McDonalds, who has to compete with every fast food joint in town, and it won't work for normal vehicles either, you'll just get undercut by other car company that will produce an equivalent car and charge significantly less for it by ramping supply and operating on volume sells
Good content. Not a topic delved into enough and this was well thought out. I especially liked the comparison of the VW Polo as a comparison of average salary. It would be an interesting sequel to see this across more models and also show the added features the more modern higher variant is offering compared to the older one. Well done!
Reason is pretty simple. Demand for cars remained the same but supply was reduced. But car makers can not keep reduced supply strategy once chip supply is restored. This only worked because all car makers are forced to reduce supply due to chip shortage.
An excellent video, full marks. To me this is a no surprise I follow prices of cars I’m interested in and over the last year have seen them rise…. But they also keep selling too. I don’t see any changes in the market coming anytime soon.
The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left"
given poor people's cost of living is often 80-90% of their income, what else are they supposed to do exactly? easy to invest with lots of disposable income
The car companies have always made huge profits, it's us idiots who are willing to pay the unjustifed, ever increasing prices, thus fuelling their greed for money.
I've noticed the prices climbing quite dramatically over the last few years. The old fiesta st was around £18k with good spec now it's closer to £23k. Old m4 was around £55k now its in the 70s! Golf r was £34k with dsg now its £40k and seems to be made from cheaper materials. I thought I was going mad!
A vast majority of UK citizens don't buy cars out right, instead leasing/pay monthly is a more common option. You can almost always guarantee if you see a new car on the road the driver is most probably leasing it. Only the financially sound people can contemplate going to a dealership and buying a new car outright with cash. Buying used cars with cash outright is somewhat easier. Its also worth mentioning some people like leasing cars for 1-3 years so they have the newest car with the newest tech etc. For example leasing an Audi A1 2021 for 3 years to then change to an Audi A1 2024 or a completely different new car.
Even though i earn a decent salary i've always enjoyed driving cheap old cars and cheap old cars are still cheap old cars so yahoo to your chips and expensive tat!
