Talk Morgan Forums Community The Malvern Arms Car Market in 2017

I'm not sure how sustainable the new car market really is.

New cars have become too complicated, too big, and too heavy. Dealers are mostly in plush showrooms with huge overheads.
They don't offer (in my experience), part exchanges at a level which encourages a deal.

Factor in that now diesel is the spawn of the devil, diesel sales will evaporate even though they are still building huge numbers of diesels.

The press have reported huge numbers of secondhand stock cars being held from the market to hold values at an artificial level, but none of that matters when buyers can't afford the asking price.

So it will be interesting to see how this pans out.

All sounds very worrying to me. Equalally when at the open day, i was surprised at the high number of new/secondhand morgans Berrybrook had for sale going into the winter.

BMW and Mercedes are notorious for negative equity on their PCP deals. They are struggling, despite the brand. J-LR by contrast are healthy with regard to supply and demand and their PCPs are not trapping their owners into the brand though unrealistic deals.

Bang on, Dave. Manufacturers like BMW and Mercedes are building large and complex cars that are too expensive for normal people to buy. As a result, they are reduced to persuading people to rent them out, and are taking the massive hit to their balance sheet.

Meanwhile, manufacturers like Dacia are building simple and affordable cars which might not boast all the bells and whistles, but which are affordable by normal folks and so consequently are selling like hot cakes.

I wonder which will prove to be the better business model in the future?

My understanding is that when they "rent them out" they're underwritten by financial institutions and the manufacturers aren't taking a hit.

Since almost no-one buys anything for cash any more it's probably just an extension of every other type of credit.

Mercedes sales increased by 11% in 2016.

It's a fact that the public demand ever more creature comforts and technology on their cars. It's heading the same way as the mobile phone - anyone remember when you used them to make calls ?

Poor choice of words on my part. The 'hit' is that the returned vehicles have a much higher book value than true market value. There are enormous stocks of returned PCP vehicles on airfields all over the UK, the manufacturers are strictly controlling the rate at which they are being returned to the market.

My colleague has just bought an ex-PCP Mercedes, 9,000 miles, full MB service history, 4 years old for just over half the list price. The thing is indistinguishable from a new car.

This cannot be a sustainable business model in the long term.

Especially not when there are increasing numbers of them being returned clocked.

When you say clocked do you mean just to keep them below the stipulated PCP annual limit or more sinister ?

Thats pretty normal and nothing new. Depreciation in the first 3 years of life is usually around 40% so at 4 years you can expect 50%. For which reason I have not bought a new car for a decade or more,



I hope you are wrong about the financial institutions but I suspect you are right. In the US, where PCP was invented, they already have major problems with cars being handed back rather than bought and the consequent collapse of second hand prices. And apparently here in the UK some 83% of all new car sales are on finance.

More sinister. Search the Mercedes forums. People are buying clocking devices to take advantage of the ridiculously low mileage stipulations.