How come there are so many expensive new cars on the roads?

Having graduated through the driving ranks bicycle, motor-bike, car I can't think of a faster way of flushing money down the toilet other than buying a new car. Once you drive that car from the sales forecourt the value drops significantly in those first few seconds of your enjoyment. But, if you can afford to waste such money, keep at it and trade the car in three years later and then I could be its next purchaser. Just keep it in good nick and I will ensure its safety for another eight years.
 
When you speak with people with truckloads of cash, they're generally appalled at the idea of buying a new car (except maybe at ultra HNW level where €20k can be like €10). What's the point, when you can let someone else take the huge hit (perhaps €20k a year) and walk into Joe Duffy/MSL/Spirit with cash and hammer out a great deal for something really nice and only a couple of years old, but still under warranty.
 
My car is 11 years old. My wife's car is 13 years old. Both in great order with low mileage.

It concerns me that at 15 years old I may not be able to get insurance on these cars or be able to shop around for insurance. I may be stuck with my existing insurer who will then raise the premiums because I am trapped.

We could both purchase new cars tomorrow with our savings that are earning us practically nil interest at the moment. We don't want two new cars. We don't need two new cars.

As we approach "pension age", we are concerned that one of us will be means tested and as a result get no state pension or a hugely reduced state pension. So what do we do? Do we spend our savings on two new cars. Get the new kitchen, home improvements etc.
(Our home is nice and kept well).

It bothers me that I may have to dump two perfectly good cars in a few years time.

A thought did occur to me that I could put both cars away until such time as they become "classic" cars and then resurrect them in the future.
 
I find 'hammering out deals' in Dublin with cash in hand is a fiction.
I was practically insulted by a pup of a salesman when I tried to bargain. He told me to be on my way....and this for an expensive 2nd hand 2 yr old car which was only 6k less than the new model beside it!!!
 
Car dealers make money by selling new cars, selling second hand cars and selling finance. The last one can be the best revenue stream. They also make money from parts and servicing but that’s not relevant to this discussion.

If they sell lots of new cars and don’t turn over the second hand’s they will have to have a serious line of credit with their bank but if they have sufficient working capital then they may be making more money selling the high value second hand cars than they are selling the new ones.
 
Delboy said:
I find 'hammering out deals' in Dublin with cash in hand is a fiction.!!!
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My experience as well and that was during the bottom of the recession in 2011. No or very little movement on price but was fairly easy to get extra's like re-spay of bumper and small things fixed as part of a sale.
 
aristotle said:
My experience as well and that was during the bottom of the recession in 2011. No or very little movement on price but was fairly easy to get extra's like re-spay of bumper and small things fixed as part of a sale.
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When they take a trade-in it's on their books at €X and if they sell it for less than €X they are making a book loss. Fixing bumps and the like doesn't show as a cost so it's easier to get more for the same money than the same for less money.
 
trasneoir said:
In the case where the dealer/manufacturer is offering subsided finance, the cost of the subsidy is baked into the car's sticker price. I'd expect the cash price to be correspondingly lower than the sticker price to a savvy cash buyer.
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A lot will depend on the particular make/ model, how popular they are and how the dealership is doing against their quarterly targets. If you're not fussy about a particular make or more so spec, then you will likely find a good deal. If you're after something popular, or a spec that's in lower supply, you may struggle to get much. I also had a salesman walk away when inquiring about what they considered a niche model (larger petrol engine!) if I wasn't offering within hundreds of the sticker price, he had no interest.

It will be very interesting to see what starts to happen in ~2 years time when a lot of the PCP deals come to decision time. I think one of the reasons for their popularity of late has been a significant shortage of good quality 2-3 year old cars at a reasonable price. Look at a few examples in the more popular family / small SUV segments and it's common to see around a 20-25% drop after 2-3 years. With some scrappage or similar deals to be had on the new models, it makes a more compelling case for the new one. Nissan for example are offering 4k, and 6.9% on the PCP deal, or 4% if you don't avail of scrappage. If however in 2 years a lot of these PCP financed cars start coming on the second hand market, then prices will fall with supply, and the new car becomes less compelling again.

People have different tastes and different priorities. If we were to reduce every purchase decision we make into what makes most financial sense, we'd all be living in bedsits, working two jobs, buying second hand clothes, watching small portable TVs, eating the cheapest own-brand food, never taking a holiday, never drinking alcohol, never eating out.....the list goes on. But hey, life's short, a little indulgence feels good every now and then.
 
I think part of the reason for this might be that it is so easy for consumers to compare prices these days that everyone is very aware of the price bracket for second hand cars. It used to be the case that dealers had their little black book of resale value and were able to offer lower prices on trade in as those trading up weren't as clued in as to what their old car was worth. These days, with the various different websites out there, most people have a good idea what their old car is worth and are probably getting a better price on it when trading up, therefore leaving the dealer with less wriggle room when selling on the car again.
 
Answer to why.

We are in a mini-boom .
Things may get boomier .
Things may get boomiest.
Things may go bang !.

That said, there is a confidence that is good to see and I hope my (doubts) of things going pear shaped again won,t happen.
 
Yes, this could be another balloon. Lets hope people have learned from the last time.
 
If the overarching story is people purchasing new cars on the never never without the means to pay the outstanding balance in 3/4/5 years time, it's a house of cards that will come crashing down. You'd run a mile from investing in car companies, and if in the market for a "new" car, you'd sit on the sidelines and pick up a lovely second hand model for a song.
 
Mini boom in my view at least in Dublin unless you lost your job ( like me!)
 
A guy I know who earns maybe €40K recently got a new €60K car, paid for in full with a recent inheritance, the kids are gone, the mortgage is paid, his reasoning is the car will last him maybe 15 years, if he didn’t spend it he would gamble it within a year.

For him anyway he did the right thing.
 
just a vibe I get from this thread is that people shouldnt get above their station,,the old irish begrudgery thing again, I think what Im getting at is people can do what they wish with THEIR money(borrowings).
 
postman pat said:
just a vibe I get from this thread is that people shouldnt get above their station,,the old irish begrudgery thing again, I think what Im getting at is people can do what they wish with THEIR money(borrowings).
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and when their borrowings go wrong, they can run to the David Halls of this world to protect them and expect the general public to give them never ending forebearance
 
postman pat said:
just a vibe I get from this thread is that people shouldnt get above their station,,the old irish begrudgery thing again, I think what Im getting at is people can do what they wish with THEIR money(borrowings).
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No bregrudgery. More exasperation at people pissing away money. It is a forum frequented by people who are interested in getting the most from their money after all.
 
postman pat said:
just a vibe I get from this thread is that people shouldnt get above their station,,the old irish begrudgery thing again, I think what Im getting at is people can do what they wish with THEIR money(borrowings).
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I've introspected about this a bit.. I've come to see status and luxury as vices - we can never get enough, and their pursuit (to excess) has got sharply diminishing returns for our happiness and for the wider world.

I'm not immune by any means - I think we're entitled to our vices, and we shouldn't begrudge them in others. I also think it's important to recognize them, and to be aware of their affect on our decisions.
 
Seems the most popular car owned by millionaires in the USA is a Toyota Corolla
I read this in a financial book recently
 
postman pat said:
just a vibe I get from this thread is that people shouldnt get above their station,,the old irish begrudgery thing again, I think what Im getting at is people can do what they wish with THEIR money(borrowings).
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I don't think begrudgery comes into it with respect. Actually the dealers around the country are giving out these deals to anyone with a heartbeat it seems!

This is Sub-Prime on wheels!
 
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