Luxury Used Car Prices Plummet in 2020
Good news has been pretty thin on the ground throughout 2020 so we have to take it where we can find it. If you're in the market for a used luxury car or a used supercar there's probably never been a better time to grab yourself a bargain as prices of these desirable vehicles have been plummeting throughout 2020, and that's good news, isn’t it?
The problem is that what's good news for one person can sometimes be very bad news for someone else, and that's what a new report from a UK motor industry trade magazine has revealed.
What's going on?
According to Car Dealer, which is a motor industry trade magazine, prices of used luxury cars and supercars have dropped by around 30% over the last 12 months, which is obviously great news if you're looking to buy one. Of course, the situation is the exact opposite of great if you’re the one with one of these vehicles to sell or you’re a dealer watching the value of your inventory nose-diving.
The report concludes that a combination of ˜desperate˜ owners looking to get rid of their expensive cars quickly and cheaply, and the opportunism of buyers looking to make the most of the situation, has caused a collapse in the value us used luxury cars. While the average used prices of volume cars have been increasing over the last eight months, the top-end of the used car market is experiencing the complete opposite effect of the current economic climate.
Winner and losers
While buyers can grab a genuine bargain at the moment and potentially save themselves tens of thousands of pounds on a used high-end car, those looking to sell are losing that money and dealers are really feeling some pain.
An owner of one of the UK's biggest high-end car dealers, Tom Hartley, told the publication that his stock will ˜take the biggest bath in 47 years.˜ Other dealers are reporting values dropping by tens of thousands on models that previously sold for a premium over their brand new price.
Hartley went on to explain: ˜Prices have dropped and we're replacing stock now at far better prices. It's a combination of Brexit, consumer confidence and the types of people buying these cars wanting to get a good deal.˜
Examples
Hartley used an Aston Martin DB11 AMR as an example of how relatively cheap these cars are at the moment compared to how things were. He admitted paying just £100,000 for the car with 3,000 miles on the clock which the owner had paid £190,000 for earlier this year.
As for those cars that were previously changing hands used for more than they cost new, another supercar dealer called Sheikh Amari sites the Ferrari 812 Superfast as a prime example. Last year, Amari sold one for £425,000 after paying $60,000 over the retail price for it and then adding a $40,000 profit margin for himself.
Amari admits: ˜That sort of premium will never come back. Today you can walk into a Ferrari dealership and get £10,000-£20,000 off a Superfast.˜
Buyer beware!
Those are pretty extreme examples of niche models, but what about models a little lower down the food chain you might ask? The truth is that expensive luxury cars have, on the whole, always suffered from eye-watering levels of depreciation as soon as they're driven away from the showroom.
Think of models like the Range Rover Vogue, Audi A8 and the Mercedes-Benz S Class for a moment. We've never had to wait very long for cars like those to sell in the used market for half what they cost new, and at the moment you'll probably be able to get used versions of these types of cars even cheaper than you would normally.
Be careful before you take the plunge though. Even if you can buy an £80,000 car for £35,000 just two or three years after it was sold brand new, the cost of running and maintaining one doesn’t get cheaper. In fact, once the manufacturer warranty has expired and you then get into the realms of annual MOT tests, the cost of maintaining one becomes considerably higher.
If you're okay with the cost of maintaining and insuring a used luxury car or supercar and the asking price is too good to miss, then there's probably never been a better time to buy and you can be sure this situation won’t last forever. However, if your budget can just about stretch to the asking price for one of these used bargains but you're hoping for the best in terms of maintenance and running costs, then it's probably best to resist the temptation.
