Values down for used
June 4th, 2010 by Richard Aucock
VALUES of used cars have fallen by 4 percent in recent weeks as secondhand market trading conditions drop.
CAP says the downturn is due to a tail-off in retail demand and a fall in quality of cars coming onto the market.
There are also now more nearly-new cars coming to market, which is having a big ripple effect on older car prices.
‘There are now signs of an increase in nearly new supply,’ said CAP. ‘This can be seen in the volume of sub-12 month stock advertised on one online source rising by 20 percent between April and May.’
Late-plate supply, maintains CAP, is a critical factor in the RV strength of the used car market.
This market turnaround is all reflected in the latest edition of the Black Book trade price guide. Things are not set to improve any time soon either, it adds – due to the World Cup diverting buyers’ attention.
It is the poor-condition cars that has particularly caught CAP’s eye, though. ‘A large and increasing number of vehicles which are not in clean condition are failing to sell at all.
‘This is not because there is no market for anything but the best cars, rather because many vendors have been refusing to accept what are in truth fair bids that reflect the investment required in refurbishment.’
Car dealers do, though – condition is a critical factor in pegging prices back, due to refurbishment costs.
It’s not all bad news; cars in good condition still make good prices. These, however, only represent a small fraction of the used market stock…
Are you experiencing similar conditions to those described by CAP at your dealership?