Market Is Down, Could Be A Good Time To Buy

February 14th, 2019

Figures released recently by the Federal Chamber of Automotive Industries (FCAI) confirm what many in the motor industry had been fearing – a significant sales slump during 2018.

However, given the massive restructuring that has been affecting the industry and various other economic factors, a 35,000 downturn on the record of 1,189,000 set in 2017 isn’t in itself significant.

What is important is the change in shape and configuration of our most popular models. Conventional passenger models are being replaced by commercial models that can adapt to family use and by 4WD ‘Sport Utility Vehicles’. Australia’s biggest selling vehicle in 2018 with over 51,000 sales was the Toyota Hilux, followed by the very similar Ford Ranger at around 44,000.

Best of the conventional cars was the Toyota Corolla in third place on the sales table with Mazda’s CX-5 the best-performing Sports Utility vehicle. However, it would only manage 6th position in a very competitive market segment.

For those Enthusiast Insurance customers who prefer conventional cars, this change could represent an opportunity. While the vast majority of pre-1990s ‘classic’ models are rear-wheel drive, the only major car-maker holding firm today with RWD platforms for its performance models is BMW. However there do remain in dealer showrooms and holding yards a few leftovers that commemorate Australia’s longest-serving car maker.

VFII Commodores built in 2017 and with low or no kilometres showing remain available at various dealerships throughout the country. Most are high-specification V8s being sold at close to their original list prices, however there are still few ‘demonstrator’ SV6s being discounted with fewer than 100 kilometres showing.

Australia told Holden in unmistakable terms that it was not happy about having the iconic rear-wheel drive Commodore replaced by a smaller, European-sourced hatchback. The Opel-based ZB model is selling very poorly and unless Holden can turn this situation around our market may not see any more Commodores after 2020.

The question for motoring enthusiasts then becomes ‘Is it worth buying a piece of Holden history in the shape of an unused VFII Redline SS or Motorsport-spec Commodore 6.2-litre and burying it in a dark garage?

The general answer to that kind of question is ‘no’ but there has also never been a situation like this before; when a manufacturer so entwined with the Australian community for 70 years has simply abandoned its customer base. In so doing, Holden generated strong demand not for new cars but the ones that recognise the significance of the brand.

Buying a car in the hope it will accumulate value is always risky. Initially the value will decline and if you are forced by changing circumstances to sell, the losses could be significant. Then there are unavoidable costs such as storage and some degree of maintenance. If acquiring an ‘investment’ involves borrowing money, then seek advice from a qualified financial advisor.

One cost that won’t drain the account too significantly will be insurance. Enthusiast’s ‘Drive Less….Spend Less’ cover is at its cheapest where a vehicle is securely stored and never driven.

Some owners will, however, want to luxuriate in the rumble of their V8 and that’s fair enough too. Providing use is kept below perhaps 1,000km a year the influence on long-term value won’t be hugely significant and the additional cost of insurance not be too onerous either. Visit www.enthusiast.com.au or call our team on 10 44 44 to discuss your options.

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