Thread: Defenders on "Car Sales."

Originally Posted by Zeros

No I don't, but a solid beam axle is heavy duty yes.

All brands of 4x4 vehicles have known faults and require upgrades. Some more than others.

...so back to my question, I'm genuinely interested to know - if Defender isn't heavy duty in your opinion, what vehicle is?

Don't think you're going to get an answer mate

Originally Posted by martnH

It's just like bitcoin. People buy it because they think it has value. And then greed is involved as some started to buy it because they believe price will go up.

It's nothing like Bitcoin. Cryptocurrencies have limited real world utility and their true value is impossible to accurately quantify because they have no intrinsic worth. There's also the issue that nobody understands them fully. It's all pure speculation.

A Defender is a tangible asset with features and functionality that can be seen, understood and compared to other assets with similar attributes. It has true value. What we're seeing on Carsales simply demonstrates that the retail price of new Defenders was lower than market value. When Defenders were being sold brand new there was effectively a cap on prices which dictated the prices of used vehicles too. Obviously you couldn't sell a used Defender for anything near the RRP for a new one.

Now that production has ceased and the RRP cap has been removed, there's been a correction to more accurately reflect what these vehicles are actually worth and it has nothing to do with hipsters and city slickers. The cap is now the price of alternatives, of which there are very few. The Mercedes G Professional starts at $110k, the 70 Series Cruiser is $90k+, and that's about it.

A Defender might not me the most mechanically reliable or well built vehicle, but it's a heavy duty vehicle that will easily last half a century and beyond if looked after. The same can't be said for most modern vehicles which have become disposable by design.

For what it's worth, when I tell people I paid $55k for my 2016 110 the response every single time has been 'Oh is that all? I thought it would have been more than that'. That says it all, really.

Originally Posted by Andrew86

It's nothing like Bitcoin. Cryptocurrencies have limited real world utility and their true value is impossible to accurately quantify because they have no intrinsic worth. There's also the issue that nobody understands them fully. It's all pure speculation.

A Defender is a tangible asset with features and functionality that can be seen, understood and compared to other assets with similar attributes. It has true value. What we're seeing on Carsales simply demonstrates that the retail price of new Defenders was lower than market value. When Defenders were being sold brand new there was effectively a cap on prices which dictated the prices of used vehicles too. Obviously you couldn't sell a used Defender for anything near the RRP for a new one.

Now that production has ceased and the RRP cap has been removed, there's been a correction to more accurately reflect what these vehicles are actually worth and it has nothing to do with hipsters and city slickers. The cap is now the price of alternatives, of which there are very few. The Mercedes G Professional starts at $110k, the 70 Series Cruiser is $90k+, and that's about it.

A Defender might not me the most mechanically reliable or well built vehicle, but it's a heavy duty vehicle that will easily last half a century and beyond if looked after. The same can't be said for most modern vehicles which have become disposable by design.

For what it's worth, when I tell people I paid $55k for my 2016 110 the response every single time has been 'Oh is that all? I thought it would have been more than that'. That says it all, really.

I have only heard about terms like "true value" in Marxian economics. Karl Marx suggested the value of something is the labour embedded and this "true value" acted as a gravity for price (price up and down but fluctuates around this value). But nobody cares about him anymore hahaha

You may have already know this. But when we trade/exchange, we will generate a number in our mind called "willingness to pay /buy" and compared this with the price to determine whether to proceed the trade or not. In the sense everyone has a unique utility function to determine how much satisfaction (utility) we can obtain from a product, compared to its price. And this function dominates our purchasing decisions.

This "willingness to pay" has nothing to do with market price. Market price is determined by supply and demand. That's all. You may value defender as $100k because it is heavy duty etc.. But this number only matters when you are in the market as a buyer/seller. Say if you pay $60k for one, then theory says you obtain a consumer surplus of $40k. You should be happy in the sense the defender is $40k cheaper than what you would otherwise pay

Also RRP is never a "cap"..... RRP is commonly seen as a reference price. We had that reference price when defenDer was in production, under the assumption of unlimited supply.

Back to the topics, I believe the price for second hand defenders being high at the moment is because some has a appreciation expectation for these vehicles. And also current sellers assumes the potential defender buyers will use the RRP of 2016 as a reference to value second hand defender....

Nothing wrong with the prices at all....

And finally $55k will only be considered low because of the brand image of Land rover.
And that's also why Land Rover desperately want to get rid of defender and peasant owner like me

One thing interesting is that in economics, there is Veblen good or luxury goods where demand increase as prices increase. (Usually demand decrease with increased price

So what happened in the last two year suggests defender is regarded as Veblen goods by many of its new owners hehe

And the reason is these consumers think defender (now with a higher price) are more exclusive and indicate status.

Just saying...

So the said economics theory suggest that
As a seller facing buying demand a exclusive luxury product, it would be wise to paint the grill, light surrounds and wheel arch glossy black (or maybe the roof as well) and to make the defender shiny

Because the way you view the defender (probably as a capable workhorse) is vastly different from what potential buyers think


Cheers

Yep. Because world taught economic theory has worked out so well in practice!

Originally Posted by martnH

You may have already know this. But when we trade/exchange, we will generate a number in our mind called "willingness to pay /buy" and compared this with the price to determine whether to proceed the trade or not. In the sense everyone has a unique utility function to determine how much satisfaction (utility) we can obtain from a product, compared to its price. And this function dominates our purchasing decisions.

This "willingness to pay" has nothing to do with market price. Market price is determined by supply and demand. That's all. You may value defender as $100k because it is heavy duty etc.. But this number only matters when you are in the market as a buyer/seller. Say if you pay $60k for one, then theory says you obtain a consumer surplus of $40k. You should be happy in the sense the defender is $40k cheaper than what you would otherwise pay

Something is only worth what someone is willing to pay, it has everything to do with market price. You can take away all the supply in the world, but if no one is willing to pay more than $80k for a Defender then the price won’t go beyond that. To put it into your economics 101 syntax, willingness to pay is where the demand curve intersects the fixed supply line which gives you your market price. As we’re seeing with Carsales, people are willing to pay much more for a Defender than JLR ever charged and I believe this has little to do with any increases in demand. Given the lack of available substitutes, that demand curve is probably highly inelastic anyway so the quantity sold won’t change dramatically even if prices do come down a bit. It’s always been a slow market, hence why it was killed off.

Also RRP is never a "cap"..... RRP is commonly seen as a reference price. We had that reference price when defenDer was in production, under the assumption of unlimited supply.

No dealer charged more than RRP for a new Defender, even as the last available build slots diminished. RRP may only be a reference, but no Defender prior to February 2016 sold for more so it absolutely acted as a cap and that price ceiling is now gone.

Back to the topics, I believe the price for second hand defenders being high at the moment is because some has a appreciation expectation for these vehicles. And also current sellers assumes the potential defender buyers will use the RRP of 2016 as a reference to value second hand defender....

That may have driven some people to buy new Defenders leading up to the end of production, but I very much doubt anyone paying $80k for a Defender now is doing so thinking it will be worth significantly more in the future. The costs of storing and maintaining a car as cumbersome as a Defender for the time required to generate any significant return would far outweigh the costs of doing so. They’d be much better off buying an air cooled Porsche and saving the garage space.

According to my dealer, most people who bought Defenders from him in the final year of sales were repeat buyers. I was one of the few first time owners he had sold to. One guy on the list was buying his fifth!

And finally $55k will only be considered low because of the brand image of Land rover.

I disagree. The Defender is a classless vehicle that has little in common with its prestigious brothers and sisters that wear the JLR badge – no one is buying a Defender thinking they’re getting a cut-price Vogue. As I said before, and as others have mentioned repeatedly, it’s the price of substitutes that is the biggest factor.

Originally Posted by martnH

So what happened in the last two year suggests defender is regarded as Veblen goods by many of its new owners hehe

And the reason is these consumers think defender (now with a higher price) are more exclusive and indicate status.

You're the first person I've ever known to associate Defenders with anything even resembling luxury. We're not talking about Chanel handbags here, no one steps into a Defender and feels fancy. Happy, deaf and sweaty, but not fancy. You can toss that theory straight in the bin.

My defender is gone. Its was picked up today by its new owner.

When we agreed on $65k he was in Israel and he had not even seen the car, put a $1000 deposit on it and i waited until today.

When he saw it for the first time he could not believe how good it looked in real life, how much work was done to it and how beautifully it drove.

After he paid the balance and got the paperwork out of the way i watched him drive out of my driveway.....its was the saddest moment ive ever felt in regards to a vehicle. I walked into the house with tears running down my face, my mrs gave me a hug and reminded me of our priorities.

Sad day