Audi R8 Forums banner

Car Price Drop Analysis

15K views 152 replies 32 participants last post by  JuddS 
#1 ·
As many of you know, I really really like a good deal. I'm not very price sensitive buy just like feeling that I'm not being stupid.

As I need a new car to replace my beloved manual transmission wagon that went swimming, I'm trying to pull the trigger on something but can't because I believe used car prices are going to tank very soon.

But how much? I know this is hard to say for all used cars but as supply increases rapidly this year and the economy cools, I can't see any other outcome but a major reset in prices.

Do you guys predict a 20% drop across the board? If so, when will it hit? A 10% drop? When and for how long?

If I buy a 90k used range rover and sell it in 2 years for 50k while having a 30k repair bill during that time I am going to feel like a real sucker..

But if I get a 70k mercedes and resell it in a few years for 50k then I'll feel pretty decent.

I'd feel like a champion if I get a 15k car for 3 months and then prices drop 20% and I get that Mercedes for 56k and sell it for 50 in a few years.

What does your crystal ball tell you?
 
See less See more
#45 ·
This market is definitely going to cool more - it must just given what's going on in the broader economy. Heck, when you see "buy now, pay later" fintechs racking up hundreds of billions in loan volume, then turning around and selling it as securitized investments to Wall Street, you know something unhealthy is underway. The pandemic helicopter money sure pushed a lot of cash into the system, and now consumers are turning to questionable means of keeping the good times rolling.

But look... I really don't care what an R8 is worth. It could be $5k or $500k. I'm lucky enough to already own one (so I'm not in the market to buy!), and I have no intention of ever selling it. So, the price is pretty much irrelevant. When I bought it, 8+ years ago now, I plunked down the cash and mentally wrote off the value to $0 in my head. I don't include cars (or even my primary residence) as part of my net worth, either, so I don't regularly care about the value. They're not investments... just things I enjoy from a lifestyle perspective.

Do I believe, at some point, R8s will be worth some serious cash? Yeah, I do. I won't rehash all the reasons why here, but suffice it to say, as Audi's first production supercar, a storied motorsport heritage, and an icon of its era, it's a pretty important car and a formula that future buyers sadly won't get to enjoy when buying something new. It's always been a rarity to own and experience something like a naturally aspirated V10 revving out to 8,700rpm... but not long from now, it's going to be far more of a rarity and just a pipe dream for many. Whatever it may be worth on some market in the future, I'm holding mine indefinitely... to drive and enjoy, as it was intended... especially once my only other options are muted, small displacement hybrids and fully electric cars! :)
 
#46 ·
markets coming down here in Canada and its like a freight train. Customers are cancelling new car orders left right and center due to interest we are starting to get some inventory from the left over orders we have slowed down about 60% of what we were doing 3-4 months ago. used cars have dropped about 10-15% here as well its coming down but i can also see it crashing once we get all these left over cars. Home prices in Ontario are hopefully going to follow suite so i can buy my first home but this is looking still like its going to be awhile. Then again states side is voting on increasing interest this week more across the board and we up here usually follow suite. Im sniffing 2008 again most home owners are really now starting to struggle to make there payments know 3 friends about to lose there homes due to the interest
 
#47 ·
The Federal Reserve will raise interest rates... right up until the point where they reverse course. It's a roller coaster. Right now, tamping down inflation is the primary goal, so strangling consumer spending by taking away easy credit is the tool of choice. But, as I said above, there are already plenty of other indicators suggesting that consumers aren't as healthy as we'd like... we're getting some hangover in spending habits (because habits are hard to break!), but the way that spending is being achieved is more and more reliant on credit and questionable credit to say the least. Fintechs like Affirm have become overnight sensations - buy now pay later of choice for Amazon hasn't hurt - but its popularity is a bad sign for underlying consumer health. Moreover, Affirm, like its nearest competitors, is losing hundreds of millions... adding to the house of cards.

I do think we'll see moderation in home prices, but we won't get a 2008 style crash. The sub-prime lending, massive leveraging, etc. is a shadow of what it was then - so we've learned something. Most of the buyers today are much more credit worthy... but as prices moderate, it will certainly cause some to be underwater where they've overspent in certain markets. Likewise, unlike what we saw in the early 2000's through 2005/6 (peak of the housing bubble back then), much of today's spike isn't due to speculative buying, flipping, sub-prime, etc... but increases are due to pent up demand, shortages in supply, and actual inflation... not just the price appreciation but the flight to hard assets to hedge other investments. Then you also have the BlackRock and Zillow types who are manipulating residential real estate by putting heavy thumbs on the scales of certain markets. As I said, I think we'll see some moderation, but we won't see a big crash broadly speaking... clearly individual markets, especially those at one end or the other of a bell curve are outliers that may see some more radical stuff.
 
  • Like
Reactions: Cu_Cuzz and JDaniel
#53 ·
Price seems to soften in the UK too... below 2 cars with similar mileage sold on collecting cars...
Having recently started searching for an R8 myself I have to agree with the above. I have seen prices falling quite a lot over the last couple of months and continue to do so. Not sure whether this is seasonal or is the beginning of a bigger more sustained fall in prices. Of course this makes things very difficult for a buyer like me though as not many want to be catching a falling knife if the latter is the case!
 
#54 ·
I'd wait in the UK. People with big homes are about to see their electric bill go up hundreds of pounds a month. Sept 1st is the first real big price increase. People who live here and have an r8 financed and are stretching to make payments are going to start to dispose of their toys. From what I see in these forums I think about half of the owners are stretching a bit to own the car. I bet more inventory comes online in next 3 months.


Also, serious question, can I put a bit L sticker on the back of my car? I'm really truly a bit of a danger in the roads and wondering if it would help people to realize I am literally just learning. Or is it some law that inky people can have them if they are new drivers?
 
#57 ·
Right, Dr. Hindsight. And when Brandon and the gang, essentially shut down the economy in a useless pandemic reaction, kindly tell the class what you would have done ?
Inflation tools are many and historically effective, having an economy going from robust to instantly stagnant....not so much.
A substantial portion of inflation is global supply chain/ inventory management which is getting better, none of which assists the mental masturbation of sports car forum 30 day price forecasting.......carry on.
 
#64 ·
It would be interesting to have the discussion without the arguments. I'm not blaming anyone, but do think there are some decently not stupid people on this site and I'm interested in topics involving macroeconomic trends. I always liked those advanced macro econ classes where you got to put 3 or 4 lines on a graph and then calculate different outcomes. It was like a puzzle mixed with math and then to see how the policy makers used it to quite literally drive the economy. Its always scary to me that that stuff literally drives our economy. But in the end, its mainly just consumer spending so we just need to continue making the average person feel bad about themselves and marketing to them to buy something to fix the problems in their life. So weird how that works.
 
#66 ·
Having just bought an early v8, so towards the bottom of the market, I still peruse the classifieds to see what's about.
Plenty of the cars I noticed a couple of months ago are still for sale. Either higher miles or R tronic and mostly black. I definitely didn't want black.
However some have subsequently sold since I bought mine.
To me that says there are buyers for the right cars and it's not necessarily all about the price.
Finding a nice, unmolested and well looked after car is the problem. IMO
 
#69 ·
Yes certainly not been loved. Some scuffs to the paintwork and leather, kerb rash on a couple of wheels and crap P-Zero's, broken rear lens and missing tow hook cover. I reckon £5k would see that rectified and still a cheap car.
 
#70 ·
Agree still a very cheap car, probably about £15k-£20k below what I have seen retailing. There was a bit of a weird history with this car though, it was off the road for a number of years due to a failed gearbox and was also spotted in the fleet at one of those track experience companies.

That being said sites like Collecting Cars do give a good indication of actual prices people are willing to pay. I recently bidded on a really nice Audi R8 V10 Plus Gen 1 in a lovely blue colour with some very good extras and a good history that ended up selling for roughly £52k, and when you look on autotrader and other sites people are trying to sell for £60k+ (with less spec and not as desirable colours etc) and these same cars have sat unsold for many weeks etc.
 
#72 ·
maybe they are doing better in UK which would make sense given the owner of the site but their listings and support in US has been pretty poor. i had a deal on an auction fall through over the weekend on a gt3 and the broker was just very poor with communication, updates etc
 
#78 ·
Dude these guys have had their electric bills skyrocket in the last 30 days. It's capped for a bit but still is significant. I'm working at a company now whose electric bill went up at just one location from 70k a month to 220k a month. And that's just one building in their portfolio. It's mayhem.

Govt claims inflation is like 8 or 9% but I bet it's 12%. Many people can't afford toys right now and the bottom is falling out. The IMF is even freaking out at what's going on in the UK. I'm personally very concerned. The heads of state all across Europe have started wearing turtle neck sweaters (I'll insert a joke here about the French) as a sign that they too are going to be cold this winter.

But I still don't get how cars are so cheap over here. I got a 2016 cheap Mercedes for like 13k USD and it would have been 30k in the usa. Banks are selling bonds at 4% and I feel horrible for the fixed income old people. I spoke to a union guy today who negotiated a 3% raise for his guys this year which is like a 9% pay cut if inflation is really at 12%.
 
#79 ·
Dude these guys have had their electric bills skyrocket in the last 30 days. It's capped for a bit but still is significant. I'm working at a company now whose electric bill went up at just one location from 70k a month to 220k a month. And that's just one building in their portfolio. It's mayhem.

Govt claims inflation is like 8 or 9% but I bet it's 12%. Many people can't afford toys right now and the bottom is falling out. The IMF is even freaking out at what's going on in the UK. I'm personally very concerned. The heads of state all across Europe have started wearing turtle neck sweaters (I'll insert a joke here about the French) as a sign that they too are going to be cold this winter.

But I still don't get how cars are so cheap over here. I got a 2016 cheap Mercedes for like 13k USD and it would have been 30k in the usa. Banks are selling bonds at 4% and I feel horrible for the fixed income old people. I spoke to a union guy today who negotiated a 3% raise for his guys this year which is like a 9% pay cut if inflation is really at 12%.
Judd, you may have answered your own question. "Many people can't afford toys right now and the bottom is falling out."

Most markets eventually boil down to simply supply and demand. Those cars are cheap because the demand isn't there - at least that would be the simplest explanation. I've never looked at the car market in the UK, but do a high percent of the population prefer to historically buy new? Do the cars corrode quicker (as @bavarianstance suggests)? With an economic crisis brewing, perhaps the typical second hand buyer is no longer buying? These would all seem components of a likely answer to me. I don't see a lot of mystery in it. If the economy was booming and there was a shortage of transportation, and THEN second hand cars were really cheap... one might wonder. But that's not the case, right?

As for electric bills... clearly Europe has it far worse than the US right now. However, living in CT, where our electricity cost has historically only been second to a remote set of islands in the pacific (Hawaii), I have a real sour spot for the topic. We have a relatively small state of roughly ~3M people, smushed between two major metro areas of NYC and Boston, and somehow our electricity costs have been near the highest in the nation. I'm not going to quote my electric bill here, but let's just say that it resembles a mortgage payment for some people. Eversource (our provider) points the finger at the politicians, the politicians point back at Eversource... it's ridiculous, mismanaged, and corrupt. If solar was a viable option, I'd have gone for it already - however, the break even if still too long, and here in CT we just don't get enough sunlight through major parts of the year. No less, I can already see a certain tax-happy group of politicians deciding that solar systems will need to be taxed annually because... similar to electric cars and road tax, or like the mafia, there's no "getting out."

But that said, we may start to see people move towards self-sufficiency. When it becomes more affordable to run your own garden, raise your own food, generate your own electricity, etc... you know the government has failed. Presumably these commodities exist more efficiently when produced at scale... or at least they should when the system is operating properly. If it starts to become more economical to build, own, and operate private infrastructure to generate these commodities, the system has collapsed IMHO.
 
  • Like
Reactions: kiryu
#80 ·
Probably bears a mention, as EZ said the EU is in far greater turmoil presently for a variety of reasons including overly woke energy mandates, now come back to roost. As bad as that is, the UK is even worse combined with a feeling Govt. seems to be spending lots of time chasing it's tail and what "seems" a very dire negative reinforcement loop and probably a "batten down the hatches" attitude.
Nobody needs these cars really, and if this board is an indication there are plenty of owners without, homes, without material savings, without smart financing [i.e. variable rate] putting lots of stuff held at the margins, into the market, further pressuring sale prices. Over time, it's a reoccurring theme.
 
#81 ·
Ez, eversource is my least favorite utility out of the 50 or so we deal with on a constant basis. I had some punk 40 year old middle manager stand off with me one time and I was like, dude, you make 100k as a middle manager for a corrupt utility that everyone hates. They are second only to comed in Illinois in terms of perceived corruption. I won't accuse them of that openly here on this site, but they certainly stick it to you.

They also have these crazy woke policies where they tax the hell out of you on your bill and dole out absurd incentives to minority owned businesses only because of the color of their skin. It's crazy to me that it is legal.
 
#82 ·
Ez, eversource is my least favorite utility out of the 50 or so we deal with on a constant basis. I had some punk 40 year old middle manager stand off with me one time and I was like, dude, you make 100k as a middle manager for a corrupt utility that everyone hates. They are second only to comed in Illinois in terms of perceived corruption. I won't accuse them of that openly here on this site, but they certainly stick it to you.

They also have these crazy woke policies where they tax the hell out of you on your bill and dole out absurd incentives to minority owned businesses only because of the color of their skin. It's crazy to me that it is legal.
Not surprising to hear, unfortunately.

I get e-mails almost weekly from Eversource trying to explain away their prices. If they put even half the energy they do into improving their operation vs. "explanation campaigns" we'd see a respectable change. To add insult to injury, aside from nearly the highest costs in the nation, the service is terrible. Power outages in CT are a cornerstone of the utility company's identity. But, add it to the list of things where "higher price" doesn't equal "better service"... such as CT's vehicle excise tax. I pay over $5k/year in vehicle tax (not to be confused with property tax - which is far, far more)... and you'd think that CT would have perfect roads considering we collect a completely separate tax just for vehicles. Well, they're nowhere near perfect - many are just downright BAD... and if you compared it to any other state without such a tax, you'd be hard pressed to explain where this vehicle tax GOES and how it benefits our roads.
 
  • Like
Reactions: hamannperformance
#101 ·
going back to what this thread is actually about, this is a good reference i look at that comes out once a week. it doesnt apply to every type of vehicle but its a good guide as to where the market in general is going: Market Insights – 10/18/2022 - Black Book
and that shows overall car prices are down 0.8-1% per week every week since july 30th
this is a good reference. just checked this week's and its down a whopping 1.5%. Wow
 
#84 ·
I seem to remember that in the UK a car from new retaining 50% of its value after 3 years normal use was very rare. From that point they would then deprecated more slowly down to virtually nothing.
I can't see an R8 being worth nothing bit it wouldn't be surprising if average cars dropped well below £30k.
Plenty of high miles or story cars at that level now
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top