Prices for best used cars may rise
Prices For Best Used Cars May Rise
The used car industry may be in for a turbulent time over the course of the next 12 months or so, as stocks of three year old cars are predicted to plummet [1].
Three year old cars typically make up 75 percent of the used car stock [2], yet in 2008 and 2009 sales of new cars were weak as the motor industry was particularly hard hit with the effects of the financial downturn. Sales slumped 11.3 percent year on year in January 2008 from 2007 [3], and fell a further 25.9 percent in the first six months of 2009 [4].
The introduction of the scrappage scheme by the Government then boosted sales in the latter half of 2009; however had the knock on effect of reducing the availability of used cars as many older vehicles were scrapped as people took advantage of the ?2,000 incentive [5].
Used car company Carsite who produced the research, estimated that the number of fleet vehicles available for re-sale would decrease by around 20 percent in September 2011, and decrease by a further 20 percent by March 2012 [6].
Alistair Jeff, Director of Sales at Carsite, said: “The used car market is heading into a significant period of change, with the next two years seeing even further reductions on the availability of ex-fleet vehicles.
“Some used models have experienced significant increase in value over the last 12 months and the reduced supply from 2011 to 2012 should strengthen residual performances but potentially trigger further price increases.
[1] Telegraph (April 16, 2010). Used car prices likely to rise. http://www.telegraph.co.uk/motoring/news/7594500/Used-car-prices-likely-to-rise.html
[2] Telegraph (April 16, 2010). Used car prices likely to rise. http://www.telegraph.co.uk/motoring/news/7594500/Used-car-prices-likely-to-rise.html
[3] BBC News (January 7, 2009). UK sales fall to 12-year-low. http://news.bbc.co.uk/1/hi/business/7814843.stm
[4] BBC News (January 7, 2010). Car sales near two million in 2009. http://news.bbc.co.uk/1/hi/business/7814843.stm
[5] Autoindustry (March 14, 2010). Car scrappage scheme leaves a hole in used-car sales. http://www.autoindustry.co.uk/news/14-03-10_3
[6] Car Dealer magazine (April 15, 2010). Used car shortfalls in 2010. http://www.cardealermagazine.co.uk/publish/used-car-shortfalls-in-2010/35060