As we said in an earlier blog, and with everyone cutting back, buying a new car seems to not be the trend at the moment.
As stated here and here it seems the bottom has fallen out of the new car market and no one is willing to risk a 30 – 50% depreciation of their new vehicle in the first year. On one hand, you have the richer(?) people saying that at least you know where it is and you can’t beat that smell.
Look at all those lovely cars, untoched by other smelly drivers…
Where, on the other hand you have the poorer and more sensible people waiting till a car devalues and snapping up a bargain. And you can certainly get a bargain or two out there at the moment. What do you think?
Whereas you can get an old car that bursts into flames at any moment!
Would you or have you ever bought a new car, or is it always second hand for you?
Comment by Chris Garrett December 8, 2008
Our car is a lease/purchase thing, with either a roll over to a new car or a balloon payment, all based on resale value.
I expect this means we are screwed.
Comment by Gareth December 8, 2008
Doesn’t this mean there’s a limit on the mileage? I think if you put down a fairly big deposit on the car, you’re ok. It’s sort of like renting, isn’t it?
Comment by Chris Garrett December 8, 2008
Yeah there is a mileage factor as well as resale value. Problem is to get any kind of good deal on next one this deal counts on the car holding its value, which clearly no car is doing right now.
Comment by Nick Wilsdon December 8, 2008
We’re about to buy a new car here. The prices now in the US are exceptionally good, so we’ll be importing it to Russia. Even with the tax it’s still a massive saving on buying something locally.
Still there is a possibility that the rouble will crash too! Although it would have to fall a very long way to beat the US prices. Even before this crisis many people imported new and used US cars. For the amount we paid back on our new Nissan Almara we could have had a Hummer in the States. Interest is 24-28% on Russian loans, which explains why CityBank etc. are still busy lending here.
Very few people buy second hand cars over here, as the banks will only lend for new cars. You need cash for the second hand market.
Comment by Hamilton Wallace December 8, 2008
Car payments right now are not what people need. We just bought a 2001 from a friend with 110K miles. The kind of car you write a check for. Hope to take it to 250K.
Comment by Gareth December 8, 2008
Hamilton – 110K on the clock – I’m seriously impressed. Aren’t you worried about it breaking down?
Nick – I didn’t know the banks didn’t lend for second hand cars. That seems nuts to me. Can you pick up cheap second hand cars then?
Comment by Jean Gogolin December 8, 2008
@Nick Wilsdon “rouble”?? Never saw it spelled that way before.
Comment by Nick Wilsdon December 24, 2008
@Gareth
Second hand cars tend to retain quite a lot of their value here but they keep the market artificially high. Germany would love to send all their older second hand cars here but the taxes on importing anything over 3yrs are huge, especially now as they have increased these by 100-200% in January. Even on a car under 3yrs it will now cost about 30-40% of the value just to import now. There have been protests here, especially in the East of Russia, where there is a thriving import business from Japan.
@Jean
Yep that is the Oxford English Dictionary spelling of the word but increasingly people are turning to the North American version, “ruble”. Wikipedia says “The form “rouble” probably derives from the transliteration into French used among the Tsarist aristocracy” – blimey.