Sunday, November 9, 2008

Things about to get very sticky indeed

Buy one car, get one free: dealer's offer as desperation takes hold in showrooms

A car dealer desperate to shift stock has stunned the motor industry with an extraordinary offer: buy one car - and get another one free. Car industry experts described the offer as "almost unbelievable" and said it was a sign that the car market was in crisis. Struggling consumers fearful for their jobs have been deciding to hold on to their existing vehicles. This week alone four big car dealerships called in the administrators, with the loss of more than 400 jobs. More are predicted to fail over the next few months. It won't be just cars.

Posted by sovietuk @ 10:02 PM (1449 views)
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12 thoughts on “Things about to get very sticky indeed

  • last_days_of_disco says:

    More deflation on stuff we don’t really need.

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  • planning4acrash says:

    New car sales in the UK were down by 23% last month, the biggest fall for 17 years. In August the Society of Motor Manufacturers and Traders said car sales were at their lowest level since 1966.

    – I love the bit where he dispairs, says that half price didn’t shift auto’s, but two for price of one sold heaps! Just goes to show.

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  • planning4acrash says:

    Last Days, I agree, and disagree at the same time. Cars and private transport will always be necessary. What we need tho, are these, hemp plastic cars, lighter than steel but could sustain 8x impact without denting, rust free. Now, this is real suppressed technology!

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  • I think p4ac may be right n the money. Devaluation of assets and hyperinflation of everything else. Makes you think what the definition of an asset is!

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  • Suzuki are currently offering 5 years 0% with 0% down and full cashback on your trade-in.

    Vauxhall dealer near me is also offering pre-registered Astra’s for £5995 (base model) and year old Vectra’s for the same.

    Dread to think what the used values for Volkswagen Toerags and BMWX5’s are like!

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  • planning4acrash says:

    Hi Flintster, I wouldn’t say its quite that simple. There have been bubbles, and, moving from one to another can mean deflation in some areas, inflation in others, but, if the money supply keeps rising, inflation rises overall. So, try not to focus too much on the price index when understanding which way we are going, just look at money supply. To see which things are going to inflate/deflate, just follow the money. Follow the debt markets. Auto and home debt is not selling, so it will deflate. What debt is selling? That’s the question. From now on tho, debt isn’t selling at all, so it all depends on what the government print money for. Whatever Goldman Sach’s puts money into. Welcome to the casino economy!

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  • gardeniadotnet says:

    >Whatever Goldman Sachs puts money into….

    Is there any true investment at the moment, other than to support each other’s balance sheets?

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  • enuii

    Dread to think what the used values for Volkswagen Toerags and BMWX5’s are like!

    Holding up surprisingly well, I don’t do many miles and need a bigger car, thought there’d be some serious bargains with those 2 you mentioned but not yet.

    Discovery 3’s are falling like a stone.

    Been doing some auto trader dreaming today !

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  • p4ac and flintster,

    I think we’ll see deflation everywhere. With big-ticket items like cars (and houses) it’s more obvious, but personally I’ve seen a lot of restaurants & bars with special food & drink offers. Considering that pre-Christmas is normally the busiest time for restaurants, it seems very strange to be desperately pulling customers in already!

    Also take a look at commodity prices – oil dipped below $60 last week, far off its $147 high earlier this year. Coffee prices are down to 2005 levels, copper is down (no more thieves stealing church rooves and railway signal wires?), wheat is down, oats are down, lumber is at its lowest in 15 years. (Source: Fab Futures).

    No matter what you look at, the price is down from its peak. Commodities are down, wages are falling, therefore the cost of finished goods must fall too. The speculative bubble in *everything* has ended because the hedge funds can’t get leverage (loans) from the banks to speculate with. Deflation is all around. The central banks will try to print their way out of this mess but it remains to be seen whether they can really succeed without making things a lot worse.

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  • str

    I was quietly surprised by the price of an 04 plated Renault Espace on a garage forecourt about 4 weeks ago which was again £5995. Quite a large drop from their excessive when new list price. I have given up on people carriers and now much prefer the utilitarian classless chique of vans with seats for 5/6.

    It’s quite a shame that Range Rovers especially the HSE Sport are almost exclusively driven by chav’s with money (or big interest only mortgages).

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  • str2007,

    The time to strike a bargain on a used car is pretty much now. Second-hand dealers’ lots are full of cars that they paid full-whack for but now can’t shift – I was at a dealer last week, the car I was interested in had been sitting on the forecourt for nearly three months already. I asked for £1,000 off, they said no, I told them to call me if they change their minds. We’ll see what happens.

    The best bargains should be in February. For most dealers, January is the busiest month (basically husbands are stressed at spending Christmas with uncle-in-law Bill and his flash new X5 so they all rush out to buy shiny new cars). This January the rush simply won’t happen, the money isn’t there. In February the dealers will realise how screwed they are and will chop prices just to shift stock.

    If you can’t wait til Feb, check out your local used car auctions. There are some cracking deals already! See this article from insider Honest John: Further Huge Falls at Auction Today. For example: Audi A3 2.0TDI 140 Sportback, 2007/57, 9k miles, sold for £10,400 – that’s a one-year-old desirable German car for just 55% of list price!

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  • enuii

    Know what you mean about the chavs and RR’s pity really, getting technical it’s also a pity they made it weigh 500Kg more than the X5 which is why it’s so slow and juicy.

    I was going to get a Touran 1.4tsi for our family car, but typically they’ve hardly dropped at all making them look quite expensive against those mentioned above.

    Given I’ve changed my lifestyle to keep driving to a minimum and we don’t take flights, I feel I can give myself a little leaway on engine size as the fuel bill is not a huge difference. (Clearly the Labour government disagree by trying to up the road tax and in retrospec). But don’t get me started on that one.

    Drewster
    Thanks for the advise, the car I’m changing doesn’t have a huge amount of value left in it so waiting is probably best policy, you can actually bid at auctions online but I haven’t got round to setting that up yet, but yes unlike houses cars usually have to sell at auction. They do have reserves but I think most will go in this climate with offers in the direction of reserves as the traders know things are likely to get worse not better.

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