The major auction groups in the UK, BCA and Manheim, have confirmed what we have been saying for the past few weeks, namely that dealers are now paying at auction similar money to what they were retailing used cars for in November and December 2008. This turnaround is seen by most as just a correction after the massive decreases in values when car makers in the US first started to hint of trouble and the big 4wd “gas guzzling”, road tax and credit crunch debate picked up. This in turn affected confidence and led to cars being devalued at a pace and level which had never been seen previously.
But now it’s a very different story. With many of the larger fleet/leasing companies extending contracts, the lack of new cars being sold and the record sale numbers for used cars created a situation where, due to demand being greater than supply, prices rose steadily and indeed have now peaked.
One sales manager exclaimed;
”I have just had my best 3 months of used car volume and profit for 5 years, and if anyone selling cars in this climate cannot make a living, they are in the wrong job!”
It’s certainly positive to see a bit of cheer in the air, although we would temper that by saying the feeling is prices have now reached a plateau however short the supply is and now the absolute top prices will only be paid for the ”blue chip” cars.
The older less desirable, basic models, with higher mileage than their age suggests they should have, will not fare so well.