Used Bikes And Price Inflation

I r not looked at bike prices but car ones are the same it’s weird really as said a lot of criteria to affect price

 

Me and a friend called in for a brew at CMC Cannock today and they were a heck of a lot of bikes with sold stickers on waiting to go out.

 

My car dealer neighbour reckons used car prices have gone up by around 26%

that’s an awful lot

 

Love the posts from Feb 2021 saying that the 'fake nostalgia and bonkers pricing can't last'... yet it can, a year later and if anything it's worse.. There are Honda SP2's, 998S' for near on £20K being advertised.

I just paid £10k for my R1 (2015), tbh 2 years ago you could get them for £9k, but even in the 2 months since mine, I haven't seen a single one advertised for less than £11k. When I sold my Thruxton R last year I sold it to a dealer and got as much as I paid for it back, he shifted it on. He currently has my MV F3 for the same as I paid for it last year, and I have no doubt it will sell as we approach sportsbike season.

I have my views on why the new bike market is struggling unless it's run rate of things like MT07/R7 etc and the 'new kids' on the block, but I'll keep them to myself.

 

Car prices are insane at the moment
My current customer is finishing a PCP on his car, as a favour to me he has agreed to let me have the car for the ballon payment.
£34k which was agreed three years ago, all the similar examples are fetching £42k
Complete no brainer for me.

 

Err, that's not 'a favour' to let you have it for the balloon payment, that's literally how PCP works, you are entitled to buy it for the 'GFV' or Guaranteed Future Value price... if the finance company sets that baloon too low then it's there tough luck

 

Think he’s saying the customer is letting him pay the ballon payment of 34k and having the car. I presume if they wanted to the customer could sell it privately for more and then pay off the 34k keeping the rest for profit.

 

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Exactly that, he could pay off the ballon then sell the car privately, thankfully he's too busy for that.
Very kind

 

He could have just handed the car back to the garage and they would make the profit.
He could have paid off the balloon and sold the car privately and made the profit for himself.
He has decided to let me have the car for the balloon payment regardless of it's current market value, that my friend is a real favour.

 

From what I've read, the present inflationary effect is not just related to conventional supply and demand, it also relates to monetary policy (in particular quantitative easing) during the covid-19 pandemic.

 

I think I’m with Phil on this one? Isn’t the contract of a PCP an agreement that you (the customer) will pay £xxx per month and at the end of the term be given 1st option on, a. Using any equity in the vehicle as deposit on a new car and another pcp agreement, b. Handing the car back and walk away, c. Pay the balloon payment for the agreed sum arranged at the beginning of the contract and buy the car
He not doing you a favour allowing you to pay the balloon payment, isn’t it your right as per the terms of the contract you agreed?

 

I will never buy with PCP but i've always wanted to get my head round it, does the "balloon" payment become favourable because the bike is worth more than that initial figure? - would be great to see an example thrashed out with some actual numbers.

 

With the way inflation is going and interest rates etc, I can see a correction on the horizon

 

I did once, wouldn’t again and only got away unscathed because the bike was written off and I had gap insurance which ensured I got back the full value.

Until covid that was the selling blurb they would spin you “don’t worry the value of the vehicle will be more than the balloon payment so you can use the equity as a deposit on your next one, but mostly the opposite was true, the balloon payment was more than the value of the vehicle so you’d be daft to pay it off and keep it, but when buying the next one you’d need to find a few grand again to pay the deposit because the vehicles in negative equity by that time (that’s why it makes sense to only pay the minimum deposit.) At the time the used market was so over stocked (with end of contract PCP returns) that it was crashing leaving dealers/finance companies with airfield sized car parks full of used stock worth less than they valued it at 3yrs before.
This is what made the whole PCP charade look like it was going to be the next PPI scandal but with used values now being so strong maybe they’ve got away with it and have managed to offload all that stock now at a profit? (conspiracy theory - the motor finance companies started Covid?)

 

I'm not sure you understand, I'm a builder, the guy with the car is my client.
Rather than hand the car back he is going to pay the ballon, then sell it to me for that amount, he could have made a profit but as a favour to me he is making sure I end up with that car for the residual value rather than the current market value.
The residual value was an agreed amount set three years ago when he took on the PCP.
The actual value of the car is now down to the market at the moment.
We are looking at a big difference between the two.
Does that explain things?

 

Ahhh right, sorry I thought you owned the car and your mate was the car dealer who sold it to you originally on the PCP, all clear now and yes, your mate is doing you a favour