New Cars

Car market update: April 09

As the used market continues to look very buoyant (considering the circumstances) new car sales are still gripped in a tumbling spiral.

The voices calling for scrappage are getting louder. (In fact, we were listening to BBC Radio Five Live the other day which was dedicated to that very subject for about an hour). There are a lot of questions that need to be answered about this proposal (such as why only 9 year old cars, what about the worth of the car, etc.) However, it has to be said that a similar scheme in Germany looks to have paid off as far as manufacturers go.

There are also continuing reports that some kind of aid package is soon to be announced to help manufacturers develop green technologies.

As for the used market – things are still looking good.

As am-online reports, the average auction price of used cars has recovered to the same level it was this time last year. That's quite staggering when you consider the incredible 30.5% decrease in sales of new cars from March 2008.

The used car figures are based on the auction group Manheim's sales. Their communications director points out that “In three months alone we've made up the entire residual value deficit experienced in 2008.”

British Car Auctions, EurotaxGlass and CAP have also announced similar findings (with EurotaxGlass labelling the upturn as “extraordinary”).

We've warned a couple of times now that this could well be a temporary bubble (like so much of the recent economy!) but time will tell how long that lasts.

Again, the cause of this upturn is likely related to dealers looking to re-stock or switch to selling used vehicles. Combined with current low stock levels, caused in part by extended leases to company fleets, this is making it something of a seller's market.

The interesting thing will be to monitor what happens as the gap between new and used car prices closes. Plus, the consequences of scrappage to the used car market is still a worry. After all, scrappage is a scheme designed to boost the manufacturing industry.

Another interesting thing to point out about the increase in used car value is that some of the makes and models that suffered the biggest drops last year (for example makes such as Chrysler and petrol guzzling 4x4 vehicles) are seeing the biggest percentage rise in value. This is pretty much because they dropped so low that they became a viable option for car buyers again.
As always – if you're looking to sell used car quickly and easily, check out Sell Car UK