Motor Industry News
The summer slowdown has begun. Historically, as we head into July, buyers concentrate on spending their hard earned cash on a holiday rather than a car. This year will prove no different, but so far values are holding up well.
Euro 2012 and the upcoming Olympic Games have certainly created an additional distraction to the car buyer. Usually sales rates and values would have fallen off a cliff by now. This isn’t the case, but why not?
- Demand is down on previous years. But the previously discussed shortage of good 3 to 5 year old stock means that supply is only just meeting demand.
- Retailers have really bought into the late, low mileage ex-manufacturer cars and are actively pushing them.
- In an ever more transparent market, buyers are doing their homework and are now looking for a deal in the traditionally quiet periods.
We are still seeing that a car in Ready to Retail condition is making far more money than an example needing preparation work such as bumper scuffs, wheel refurbishments or lacking a complete service history. The value drop is far more than the work itself would cost. This has more impact on the prestige market, but anything in need of work will suffer. If you’re selling at auction, make sure your cars are well prepared to see their full potential. The trade are now looking for cars that are low risk and offer a quick turnaround. The ex-daily rental and Motability cars are still a safe bet and do well at auction.
Most manufacturers are starting to see the results of having a well-advertised and approved used car scheme. Equally as important is a straight forward way to supply dealers with ex manufacturer cars. BMW have been very strong on this for many years, dealers are more than happy to sell BMW management cars unseen to customers. This is reliant on trust between the manufacturer and dealer, but most importantly on the approved used scheme building enough trust for a customer to buy a used vehicle unseen. This way of doing business is becoming more and more popular. The customer can pick and choose between vehicles available with the dealer. The dealer has complete confidence in the car that they’re selling rather than buying at auction. The biggest winner is the manufacturer. They benefit by keeping potentially large numbers of cars away from the transparent auction halls, whilst churning great quality used vehicles into their network.
Due to the usual summer downturn not hitting as hard this year, we have dropped prices by around 1% for July. There are some exceptions such as 8 to 10 year old petrol 3 Series coupe and convertible, Jaguar XK8 and A4 Cabriolet which are starting to dip due to ever increasing running costs. As such we have dropped them by 4%.
VIPDATA is part of CDL Vehicle Information Services Ltd (CDL VIS) the vehicle data arm of CDL Group Holdings Ltd, based in Stockport, Cheshire.
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