GT Residuals

c4sman

Member
Messages
1,243
I heard that WBAC operate using algorithms monitoring dealer sale prices and only look to make £300 on each car regardless of value. They’re a turnover business but their mother company own other parts of the supply chain so make money through the trade auctions. As their margins are small they are offering top money during a rising market. Not sure all of that is true but sounded plausible.
 

outrun

Member
Messages
5,017
Private equity firm bought BCA who own wbac a couple of years ago who also own cinch. Not sure who owns cazoo.

Yup. It's effectively a venture capital firm that has a socially acceptable racketeering operation underway. They control the mass market by owning BCA, WBAC and Cinch. So they can fix their margins in the trade, trade in and used car markets to suit their needs. If they want to control supply and power up demand, they just phase the sale listings to suit themselves. If they want to flood the market and drive down margins for competitors, they can do that too.

As I've said before, lockdown can be compared to what happened in the 2008 credit crunch.

1 - Panic ensues and those in precarious positions dump cars that are heavily financed causing a clut of some models
2 - Savvy buyers pick them up for a good price with cash as a long term position
3 - There's now less stock circulating.
4 - Good stock is at a premium and dealers pay more just to have sufficient volume. They are also encouraged to be silly by thinking they can't lose as prices are on the up.
5 - New money enters the market and premium products increase in value and become scarce. Top brands overpay to buy customer cars to satisfy the new money.
6 - Folk in the middle ground hold station and don't change their vehicle when in other times they might have.
7 - In this case, the pandemic, transport costs and microchip issues cause the manufacturers to reduce output
8 - There's now less new stock and so less volume of attractive finance deals than "peacetime"
9 - We're also in a transition and buyers aren't sure if buying a new car should be petrol, diesel or electric so they're also waiting longer
10 - Leads again to people seeking used which again leads to less stock around
11 - To offset some of the pandemic revenue losses, APR is higher to ownership via finance is more expensive, again cause some to wait.
12 - The whole things relies on people changing as often as possible and that's not happening for many of these reasons.
13 - As a group, we're mainly an exception to these rules as enthusiasts that value cars and their costs as a higher priority than most "normal" people.

It will all change again of course, and the excuses for main dealers not to hit targets are now running out as normality comes back so we will likely see the 0% deals and cheap leases re-appear before too long.

It's basically a spread bet model that like all gambling contains winners and losers. But the venture capital guys understand that type of spread and so they have picked assets from each core area so they can manipulate and mold as required to show their promised returns to their limited partners. It used to be that they would need to own dealerships from Ford to Ferrari to cover the market, now it's the online element as it is with many other things. Lockdown fuelled the move online, I think we'll see a period of consoldation for those with forecourts and that several will disappear.

Small specialists are well placed to ride the changes and capitalise, provided they can access good stock without overpaying. Large dealerships are going to have to spread their offering and modernise.

I've made it more simple than it is to demonstrate my point, but you get the jist!
 

schell70

Member
Messages
313
I'd been thinking the same thing actually - the APR's at the moment are crazy compared to base rate and I see lots of friends trying to figure out how to dump their £600 a month PCP's due to uncertainty after furlough.

Cash is king for sure and bangernomics rules in my world - even my GT was bought under that model

Mind you I've been toying with getting a new daily and have been looking at Mercedes CLS Shooting Brakes around the £12k mark, think a will wait a bit for prices to drop again. I'm also considering a Merc CL 500 or 550 AMG - they just seem to be epic value for money

Whilst I'm waiting the GT will resume duty for most trips over 20 miles :)
 
Messages
308
I had a brand new 2019 Golf R as I needed a daily driver to get to City Airport every week as my office is/was in Zurich (go figure) and I was justifying ways to use it so got rid of it stupidly easy to a dealer who paid £2k more than WBAC and took the car away same day with a bent alloy…

the daily I should have always got is….. got… cash and no future liability… lovely
 

whereskeith

Member
Messages
821
There’s way too much money floating around looking for a home .
Used car prices in the USA are flying and contributing massively to overall inflation.
This is a prime example of that (but I’m not complaining)
87310
 

NS75

New Member
Messages
27
They appear to be rising, but they’re cooling off already. The overpriced mid to high mileage cars aren’t selling, the prices will settle back over July, August.
Richard, at what level do you expect them to settle back? Thanks
 

empzb

Member
Messages
229
I've been looking for a 2nd car for the last 18 months or so, toying with marquees, yet prices are climbing and climbing. R8, up. 997s, up. M4, up. Gts, up.

There's lot of money floating around, but I'm wondering how sustainable everything is...I was a bit to young to really understand the 09 crash, but this time around seems like a melting pot of hugely inflated assets from cars, houses, crypto, shares.

I get while debt can be serviced there's no problems, but even the wider economy doesn't seem that set for stability or growth going by articles I read.
 

NS75

New Member
Messages
27
I've been looking for a 2nd car for the last 18 months or so, toying with marquees, yet prices are climbing and climbing. R8, up. 997s, up. M4, up. Gts, up.

There's lot of money floating around, but I'm wondering how sustainable everything is...I was a bit to young to really understand the 09 crash, but this time around seems like a melting pot of hugely inflated assets from cars, houses, crypto, shares.

I get while debt can be serviced there's no problems, but even the wider economy doesn't seem that set for stability or growth going by articles I read.
I agree, don't know what is your view but I feel that the 997s have jumped even higher than the GTS
 

Cyclone1

Member
Messages
504
Interestingly the recent price hike seems to be holding for GT’s, but the number of them for sale is increasing, circa 80 on AT. It could be a case of more owners are looking to sell to cash in, but the increase in available cars leads to potential buyers being more selective. Also that the actual demand for this type of car is relatively low due to its “rarity”, therefore justifying the increasing amount for sale.

I think the pricing has now plateaued, so will be interesting to see what the next 3-6 months holds…
 

dickygrace

www.richardgracecars.co.uk
Messages
7,309
What about Maserati Granturismo with good mileage, do you think their recent increase was appropriate and they were undervalued before?
Yes that’s exactly as I see it. But there’s still loads of overpriced cars on the market. Well priced cars sell easily and the ones who are pushing their luck will remain up for sale.