(4 votes, average: 4.5 out of 5)
Loading ...Britains used car market continues to defy the recession, and one leading price guide says that for many second hand vehicle dealers the first quarter of 2009 will be their best ever for sales.
This has also coincided with record increases in residual values, says glass’s guide. In the downturn this has had many industry experts scratching their heads, but experts at Glass’s reckon they know why this is so.
“The drop in new car sales, which really started to bite in the fourth quarter of last year, has meant there have been far fewer part-exchanges entering the used market,” says Adrian Rushmore, managing editor of Glasses Guide.
“We have also seen a 30 per cent year on year fall in the availability of pre-registered and ex-demonstrator cars during the first months of 2009. Most important of all, buyers became more aware of last year’s 20 per cent fall in values, which has attracted growing numbers to used-car forecourts,”
With stocks low and demand high, there has been a very significant improvement in residual values.
Glass’s reports the rise in the prices paid by dealers for three year old used cars during January was the highest sunce 2004, when the consumer boom was at its height.
In Frebuary, trade values jumped by nine per cent - the biggest single month rise ever recorded in Glass’s Guide.
“it is clear transaction prices have not been rising at quite the same pace as trade prices so far this year - for three year old cars, this represented a one per cent increase in January, and a 3.5 per cent uplift in February,” Rushmore says.
“By mid-march there were clear signs retail demand was starting to be satisfied, even though asking prices were still rising for dealers to introduce any further increases in forecourt prices.”
Demand might now have eased in April, but Glass’s expects values to be relatively strong for some months to come.
“In any normal year, we would expect values to fall sharply after Easter, but in 2009 we anticipate the falls to be more modest. “A slow but steady decline in used car values is likely to continue during the summer,” he says.
The latest report from British Car Auctions (BCA) confirms this, with the firms report for March showing that, although average used car values are continuing to rise, the rate of growth appears to be slowing.
March saw average auction values increase for the fith month running, says BCA, but only by £11 to £5,582, compared to £5,571 in February. This follows a 3400 plus month on month rise in February, and a £300 increase in January.
Year on year, March 2009 values are ahead of the March 2008 average figure of £5,400 by £182, or 3.3 per cent. The difference has been narrowing all year, adds the BCA report - February 2009 was £282 adrift of February 2008, while in January the gap was just over £650.
Finally, some advice for trade in car sellers who have a perfectly god car, perhaps not of a desirable brand, who find a dealer will not offer them anything like its worth.
Matthew Tumbridge, editor of Used car magazine expert, says the best way to deal with this is to walk away and sell the vehicle privately.
The private sale marketplace is also the right place for a savvy buyer to look, Some cars are more suited to buying privately than others and here are three to think about:
Renault Clio - attractive styling and economical.
Ford Mondeo - one of the best family cars ever made.
Saab 9-3 - distinctive and fashionable without being controversial or an odd choice.