Will the new Defender hold it’s value?

Mass-produced vehicles never do so why should the all-new 2020 Land Rover Defender be any different, in short, although a fantastic vehicle the values will slide. Let me explain, exactly what is happening in the marketplace and precisely why. Since the closure of the Defender production in Q1, 2016, we knew that the Defender would […]

20 October 2022 · Eldon - Barnfield Cars

sell my defender 90 110

Mass-produced vehicles never do so why should the all-new 2020 Land Rover Defender be any different, in short, although a fantastic vehicle the values will slide. Let me explain, exactly what is happening in the marketplace and precisely why. Since the closure of the Defender production in Q1, 2016, we knew that the Defender would never be killed off, and was always to reappear in a new guise, JLR invested £1 billion into their new Slovakian production plant in Nitra, where both the Discovery and the all-new Defender are to be built for the global market. In 2018 the first Discovery rolled off Nitra’s line with production tool testing of the new 2020 Defender also starting in 2018, with the official launch at the Frankfurt motor show in September 2019. The new plant, at capacity, will produce 150,000 Discovery & Defender models per annum, confirming Defender’s mass-produced status.

Today’s opening of our next-generation manufacturing plant in Nitra, Slovakia represents the start of a new era in manufacturing for Jaguar Land Rover. It is the latest milestone in our long-term globalisation program and the culmination of four years of planning. As with our existing manufacturing facilities located in the UK, China, Brazil, India, and Austria, this high-tech plant in Slovakia will complement and support our corporate, R&D, and engineering functions headquartered in the UK” Prof. Dr. Ralf Speth. CEO, Jaguar Land Rover

After the reveal at Frankfurt’s motor show in late 2019, followed by the distribution of marketing collateral and updates to dealer management systems, the hype began and the order bank for the new Defender was brimming, with deliveries anticipated to begin toward the end of Q1, 2020, it was all going to plan but then the pandemic hit which changed everything. Not only were showrooms temporarily closed but global supply lines were threatened and the production of parts, predominately semi-conductors stopped. This shut the production lines of nearly every car manufacturer across the globe.

The most frustrating part was that the Nitra’s compounds were full of Defenders already produced in readiness to ship to launch onto the market, with not only supply chains but shipping now affected by the pandemic there wasn’t any definitive answer to the Land Rover dealers most frequently asked consumer question “When is my new car arriving?” The global pause and slowdown of production caused a huge supply and demand scenario, in the instance of the Defender, with no supply yet huge demand, in turn, causing prices of second-hand examples to rocket, in some instances £20,000 over the list price. At one point, Land Rover introduced fines to dealers who knowingly sold Defender stock to resellers, where Land Rover had a team of mystery shoppers in place to review advertised cars on the likes of Autotrader, these were then tracked back to the supplying dealer. The grey market was exposed to almost every Defender customer with many consumers even trying to buy and sell them for a quick profit until the supplying dealer found out of course. This didn’t deter many, especially as the first deliveries didn’t start until Q3, 2020, with thousands of clients sitting in the dealer’s order bank awaiting their new car to arrive in 2021.

This is where it gets interesting and the reason why your Defender won’t hold its value………..

Consumers were soon realising that they could take delivery of a brand new Defender in 2021, despite the long waiting list, and reorder another car while they were at the dealer. How could they lose, they had parted with only circa £63,000 for a lovely new Defender 110 XS, knowing that the same car on Autotrader with sub 5,000 miles is advertised at circa £77,000, therefore they can wait for the new one, when it arrives, sell their current car to a good independent Land Rover buyer like Barnfield for more than they paid, pocket the difference and then go and pick up the new one. In principle for the honeymoon period, extended by Covid, this worked, we bought several examples from basic models to V8 Carpathian editions to the James Bond 007 edition which we paid in excess of £80,000 more than the list price, with the exception of the latter there are very few models that command over list price or if they do it is a couple of thousand and the big premiums aren’t there anymore.

So, back to the “smart” buyer who reordered at the point of collection, they are now faced with a financial dilemma, not only has Land Rover increased its prices, in some instances by as much as £7,000, but supply is easing and the secondhand market has and continues to soften, the gap has widened to a point where the replacement cost has increased substantially and the 2021 Defender that was worthy of a “several thousand” premium is no longer. The secondary contributing factor to values sliding is that the buyer who only ever ordered a Defender to make money has now cancelled as the huge premium has gone, so we are now faced with more cars in the market as many have or are cancelling, coupled with the fact that cargo transporters full of Defenders are turning up unannounced or months earlier than anticipated, most recently confirmed by a colleague who managers a sizable Land Rover dealer where they are now getting a regular flow of Defender deliveries. As further confirmation of a softening market, many dealers are now offering incentives or discounts on Defender, which in turn also has a direct impact on residual values.

Anticipated within the next few months or by early 2023, the dealer network will have more cars available from stock with factory orders that could revert back to the standard 12 – 16 week wait.

If you have a Defender for sale, now or in the future, please do get in touch as we are always sourcing stock and our buying service is never knowingly challenged.

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Please call Barnfield Cars today for an informal conversation about selling your new model Defender.

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