Used predictions wrong
July 31st, 2009 by Richard Aucock
UNPRECEDENTED demand for used cars is shattering CAP predictions that prices would stabilise in the summer.
The latest edition of the price guide shows further increases in used car prices.
This is creating big headaches for car dealers, reckons CAP, who remain desperate for stock – despite a slight decline in retail demand.
As there are relatively so few new car sales, nearly-new supply is down significantly. What’s more, say CAP researchers, ‘because consumers are buying fewer new cars, dealers are unable to rely on part-exchange cars to fill the forecourt.’
This is forcing up the price car dealers have to pay at auction – and the prices CAP thus quotes. These went up by 1.5 percent this month alone.
But it’s Catch-22. Customers won’t pay more for cars… so the inevitable, says CAP, is a reduction in margins.
This directly supports earlier findings from CAP rivals Glass’s, too.
There’s not even any solution on the horizon, either. CAP reckons ‘there is no early end in sight to supply constraints… expect further reductions in the number of cars returning to the used market over the coming weeks.’
So what’s performing well, and where may the used car bargains still lie? The company offers a few clues, with its sector-specific analysis:
• Overperformers: Convertibles, coupe cabriolets, MPVs
• Underperformers: City cars, small cars
There’s no denying, though, the used car market is incredibly challenging at the moment. What’s your experience of it? Do let us know!
Used car stock levels ‘in crisis’
April 5th, 2010 at 1:01 pm
This article is 100% true. We have seen the prices at the auction in the past 2 months going insane. But the customer will never go crazy paying crazy prices for used inventory, they have a lot of tools to guide them into buying right.
We are a very small dealership in Flroida and we are are having a hard time buying the right cars at the right price, so we dont get burned in case the market changes.
It is very hard out there to buy, at the auctions there is a lot of Junk that requiers a lot to fix.