Is the car market still a barometer for the economy?

[wearthefoxhat]

India car sales "plunged" 31% in July 2019. (worst month in 18 years)

China, in June 2019, car sales plunged 29%. (Ford and GM Motors big drops)

European factories closing at a high rate, Ford cutting 12,000 jobs and closing 6 plants in Europe. Jaguar Land-Rover cutting 4,500 jobs and Honda closing a plant in the UK.

The German Manufacturing PMI plunges to a 7 year low and is spreading to the Services sector.



Don't watch if you're a manic depressive, suicidal..... or both.....

https://www.youtube.com/watch?v=nxBWx1jPJGw

[jimibt]

India car sales "plunged" 31% in July 2019. (worst month in 18 years)

China, in June 2019, car sales plunged 29%. (Ford and GM Motors big drops)

European factories closing at a high rate, Ford cutting 12,000 jobs and closing 6 plants in Europe. Jaguar Land-Rover cutting 4,500 jobs and Honda closing a plant in the UK.

The German Manufacturing PMI plunges to a 7 year low and is spreading to the Services sector.



Don't watch if you're a manic depressive, suicidal..... or both.....

https://www.youtube.com/watch?v=nxBWx1jPJGw

not an expert by any means, but my impression is that leasing is gaining traction. i see it in my little local town - brand new cars forming a moderate %age. however, closer inspection reveals them to be on lease agreements. unless you are buying classic cars, maybe this is the best way fwd. that said, maybe leasing accounts for a small %age of new car *sales*, so difficult to judge.

in short, maybe depends on the local culture and resistance to change.

[wearthefoxhat]

India car sales "plunged" 31% in July 2019. (worst month in 18 years)

China, in June 2019, car sales plunged 29%. (Ford and GM Motors big drops)

European factories closing at a high rate, Ford cutting 12,000 jobs and closing 6 plants in Europe. Jaguar Land-Rover cutting 4,500 jobs and Honda closing a plant in the UK.

The German Manufacturing PMI plunges to a 7 year low and is spreading to the Services sector.



Don't watch if you're a manic depressive, suicidal..... or both.....

https://www.youtube.com/watch?v=nxBWx1jPJGw

not an expert by any means, but my impression is that leasing is gaining traction. i see it in my little local town - brand new cars forming a moderate %age. however, closer inspection reveals them to be on lease agreements. unless you are buying classic cars, maybe this is the best way fwd. that said, maybe leasing accounts for a small %age of new car *sales*, so difficult to judge.

in short, maybe depends on the local culture and resistance to change.

I like the idea of leasing for sure, being able to drive a nice new car and exchange it later on for another new car...etc

Paul Getty once said, "if it appreciates. buy it, if it depreciates, lease it."

[Big Bad Barney]

I like the idea of leasing for sure, being able to drive a nice new car and exchange it later on for another new car...etc

Paul Getty once said, "if it appreciates. buy it, if it depreciates, lease it."

I just googled that quote, everyone seems to think its a good idea. I don't understand myself tho. Don't leasing companies run at a profit?

Wouldn't it be more financially sensible to buy cars that are already depreciated yet still functional for utilitarian means?

There are lots of people out there who consider new, fashionable or status symbols to be more valuable than utilitarian function...those are the people who take the financial loss... (one might call these mug punters)

For example, I'd be almost certain buying the hail damaged functional car would leave *most* people with more in the bank than leasing....

They won't of course be held in great esteem by common status driven folk.......for some professions, that's a utilitarian need... e.g. realestate agents, sales people, etc...

[weemac]

Wouldn't it be more financially sensible to buy cars that are already depreciated yet still functional for utilitarian means?

There are lots of people out there who consider new, fashionable or status symbols to be more valuable than utilitarian function...those are the people who take the financial loss... (one might call these mug punters)

That's always been my view. People who lease new cars are still funding the clobbering of huge depreciation over the first few years of the car's life, whereas a used buyer at say 40-50% of the new price still has 80% of the car's life remaining. People do seem to care more about status and image than about utility or function, hence the proliferation of SUVs and the like on leasing deals.

Leasing seems attractive when interest rates are ultra low, like now. I regularly trawl through the large websites looking for a value used buy, and astonishingly one of the biggest sites will not let you sort by price; only by monthly payment! That shows how valuable leasing is to these sellers compared to just selling for cash.

Re the thread title, it seems that as the economy falters, sales of cars fall 6-12 months afterwards, so no, I'd say it isn't a barometer i.e. it isn't predictive.

[ShaunWhite]

Paul Getty once said, "if it appreciates. buy it, if it depreciates, lease it."

And Felix Dennis said "If it floats, flys or f*cks, rent it"

Same idea but different wording probably because Getty's obituary says "petrol-industrialist " and Dennis's says "hedonist"

[footysystems]

I am on my third lease car the deals are unbelievable currently Nissan Qashqai great car on a 69 plate £1600 down £131 a month for a couple of years 8000k miles per year its a no brainer thats why the new car market is depressed

[wearthefoxhat]

Paul Getty once said, "if it appreciates. buy it, if it depreciates, lease it."

And Felix Dennis said "If it floats, flys or f*cks, rent it"

Same idea but different wording probably because Getty's obituary says "petrol-industrialist " and Dennis's says "hedonist"

I prefer Felix Dennis's quote...

[wearthefoxhat]

I like the idea of leasing for sure, being able to drive a nice new car and exchange it later on for another new car...etc

Paul Getty once said, "if it appreciates. buy it, if it depreciates, lease it."

I just googled that quote, everyone seems to think its a good idea. I don't understand myself tho. Don't leasing companies run at a profit?

Wouldn't it be more financially sensible to buy cars that are already depreciated yet still functional for utilitarian means?

There are lots of people out there who consider new, fashionable or status symbols to be more valuable than utilitarian function...those are the people who take the financial loss... (one might call these mug punters)

For example, I'd be almost certain buying the hail damaged functional car would leave *most* people with more in the bank than leasing....

They won't of course be held in great esteem by common status driven folk.......for some professions, that's a utilitarian need... e.g. realestate agents, sales people, etc...

1. Personal Contract Hire (PHP)
2 Personal Contract Purchase (PHP)

I'd go for number 1 as I'd only pay the amount the new car has depreciated during the contract. As long as I don't hammer the mileage and look after it, give it back, get a new one...etc..

Number 2, gives an option to buy the car at the end of the contract, which for me defeats the object of leasing in general.

I'd also add in the maintenance package too as it would cover all the requirements of servicing etc..

[ShaunWhite]

I like the idea of leasing for sure, being able to drive a nice new car and exchange it later on for another new car...etc

I'm not a fan of throw-away culture. A nice one for Sunday best that's going up in value, and something old, cheap and easy to fix yourself as a daily driver is the best option. The depreciation and environmental impact of new cars is shocking. I tend to run cars till I can't patch them up anymore and I've had a couple that were so hacked that they eventually ended their days banger racing

[Dallas]

Years ago when I used to run a mobile phone business I always leased and changed to another new one every 12mths just as a tax write off.

[Rosado]

I think the real estate market is more stable than the car market and easier to notice quick changes in the economy. A car's price can change regarding to lots of factors but the value of the similar properties in the same area don't differ too much except earthquakes, wars etc. For example professionals usually take market into consideration when they try to predict the changes about Brexit.

[jimibt]

my take on the (limited) consensus here is that leasing (if researhed, shopped and market matched) is probably the way fwd.

one more facet (not really leasing related, more current thinking) is that environmental factors really are starting to guide decision making, rather than the pocket. owning and selling of cars is therefore becoming slightly shady, especially if they are having an (especially) negative environmental impact...

.. in other news, oil is beginning to escalate friction between net producres and net consumers..

[ShaunWhite]

I'm concerned about this desire to need new things all the time. A new car even an eco one is more damaging than running an old oil burner by the time the entire manufacturing process is taken into account, from mining and plastics production, through manufacturing, to distribution and even media and sales related footprint. Planetary resources are dwindling and now everyone wants a new car every year instead of every 10, how can that be justified?

[wearthefoxhat]

I'm concerned about this desire to need new things all the time. A new car even an eco one is more damaging than running an old oil burner by the time the entire manufacturing process is taken into account, from mining and plastics production, through manufacturing, to distribution and even media and sales related footprint. Planetary resources are dwindling and now everyone wants a new car every year instead of every 10, how can that be justified?

It can't be justified overall.

Second Hand cars are more reliable than they used to be (or seem to be) and it makes sense to hold on to them, service them at the right time..etc

My choice would be to enjoy the experience of a new car, maybe one I wouldn't buy @ £40,000+ and lease it along with the maintenance cover. Within 2-3 years, the next version comes out, rinse/repeat. I enjoy driving and this would tick a box for me.

It could be argued, I'd be stimulating the car market economy in my own way and then have to find a way to balance my carbon footprint...