Motor Industry News
December 2012 Used Car Market Editorial
The festive season is upon us once again. Buyers are out shopping for Christmas presents rather than cars. Traders are now focusing on January when historically the market begins to pick up and now is the time to stock up if the right cars can be found. Some traders are looking even further into next year and considering buying the likes of convertibles now, whilst prices are low and there are actually a few Ready to Retail examples on the market.
At this time of year certain manufacturers have a real push on pre-registered vehicles. We know that this is simply aimed at meeting registration targets but it has a real impact on the market. These delivery mileage pre-registered vehicles hit the open market at a knock-down price, which then has a detrimental effect upon true late plate, low mileage used vehicle prices. Although we are seeing a shortage of stock at the moment, these essentially new vehicles will take months before turning into an affordable used car for the vast majority of retail buyers. Reports show that there is a distinct lack of used cars around 3 to 4 years old at the moment but these pre-registered vehicles will simply not feed this demand. Despite the fact that In order for dealers to sell them on, they will have to show a significant saving over a brand new, unregistered car, including any manufacturer backed finance incentive or VAT free offer which is already available on un-registered vehicles.
The effects of a recession can last for years for many industries but for the used car market it is particularly devastating. The knock-on disruptions to the supply chain of clean well maintained examples gets worse as the economic downturn drags on. Dealers are having to pay stronger money for the dwindling numbers of scarce clean stock and are finding that profit margins are being squeezed even further. Values at this time of year are traditionally at their lowest but this year it is a very different story. From our research values have held firm for the right cars and this is likely to have the effect of larger than normal uplifts to values in the New Year. However this is to some extent dependent on the weather. We have not seen the surge of used car buyers looking for 4x4s as we did last year hence the values of these have remained much more stable. Values of older generation Renault Mégane, Citroën C4, Peugeot 307 and their stable mates have suffered recently as buyers shy away from possible high maintenance costs.
VIPDATA is part of CDL Vehicle Information Services Ltd (CDL VIS) the vehicle data arm of CDL Group Holdings Ltd, based in Stockport, Cheshire.
Contact the CDL VIPDATA valuation team: