Used prices’ record rise
USED car prices are rocketing at a rate double that of FALLS normally seen at this time of year!
CAP says April generally sees a fall of 2 percent in trade values.
However, in 2009, values have INCREASED – by a staggering 5 percent.
What’s more, for 3 year old cars, the average increase is more like 6 percent… meaning such cars are, effectively, performing 8 percent better than is normal for this time of year.
What’s causing it? A shortage of used stock, say car dealers. The weakness of the new car market in particular has led to this.
There are fewer car sales being rushed through, a practice which normally sees cars fed straight into the used market, reports CAP.
This has largely corrected the dramatic plunge in used car values seen by the collapse of the market in 2008.
It’s a significant correction that has seen previously decimated sectors, such as the 4×4 sector, lead the upward trend in 2009.
2008’s stars, superminis and city cars, have in contrast seen only modest increases.
All of which means, says CAP Black Book’s Martin Bulmer, the market is finally stabilising. ‘There is already evidence to support such a view.
‘Despite the clamour for stock, dealers are now reporting reduced showroom traffic and fewer retail sales. This will lead to reduced buying activity – although large dealer groups are likely to stay in the market to buy in volume for a while yet.
‘This is because many have been unable to replenish stock during the first quarter, that was deliberately depleted for financial reporting and risk mitigation reasons, at the end of 2008.
‘There is also some evidence that auction conversion rates are beginning to reduce.’
And the outlook? ‘We believe that in general buying activity will reach a more stable level during April.’
Could normality thus finally be returning to the sector – and will the new car market at last see a corresponding upturn?
Used car price rise continues apace
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