I popped my head around the auction last week for the first time is 3 months, I’ve attended auctions every week for the past 10 years, sometimes every day, so my forced sabbatical has taken some getting used to. This second quarter I’ve decided to confine myself to the cupboard in my office with my laptop and a large supply of shop bought bacon rolls with just MTI for company to keep a handle on exactly what’s going on in the trade at the moment. The reason for all this cowardice will be known by any regular reader of MTI. Due to the unprecedented state of our economy, used car values in the UK are now officially ‘all over the shop’. The down/up swing in values has caused so many used car dealers all sorts of problems over the last 12 months. Now the continuing surge of values on the upside is keeping people like me, who are working with a constantly dwindling personal pot, very trigger shy indeed.
A bizarre phenomenon.
I’ve been in this business for over 20 years and have never seen anything quite like it. Supply is the main issue; I personally can’t see values plummeting again like they did this time last year as the realisation dawns on customers and dealers alike that there are a lot less cars being manufactured at the moment with the obvious knock on effect. It’s been very hard for most used car dealers as stock is so short and yet customers still expect the most amazing deals. Any dealer who has access to good supply is enjoying brisk business, on the other hand many of the independents who traditionally buy at auction are being squeezed hard by ravenous trade buyers and crowds of out of work family men who are now making the usually easy job of replacing the family car a cost saving obsession.
So I wasn’t there long, wandering up the aisles, maybe it was me but all the cars had a tired look about them and the place itself felt just a bit too busy for a gloriously sunny Thursday. An auctioneer who regularly sold me 10 cars a week comes rushing over. ‘We thought you had died’ not the best feel-good homecoming I’ve had but they can afford to be flippant as after their 2008 Winter of discontent the auction houses are now achieving, for their vendors more sales and more profit per unit than most of the retail outlets that buy stock from there.
I still won’t buy anything from there though, I don’t really care about the lack of supply and high demand, and my auction contemporaries proclaiming ‘people still need cars’ When you’re using your own money to trade with its imperative that you buy goods that you think represent value for money. It’s difficult for someone like me to sell to a faithful customer a two year old car for £9,000 when you know they could have bought the same thing last year for £6,000 or more shockingly that if they can find another £3,000 more they can go and get a new one.
Many used cars are just not offering the value for money that they should do in this financial climate, and although it’s likely that lack of supply will keep these values generally high, from my point of view it’s all a bit too artificial.
So all you lovely punters, I know it’s not possible for everyone, but please go and buy a nice new car. For those of you that can and you know who you are, stop talking yourself and us into a bleak future, get down the building society and use some of that stagnant money that’s only going to go to the chancellor or wasteful grandchildren if you don’t spend some of it before its all too late. There’s never been a better time and the chances are that if you are reasonably carefully over what model and specification you choose that it will depreciate at a far lesser rate than has been drummed into you for all these years. It’s good for the heart, the economy and the general feel good factor that is sadly diminishing in this country before our very eyes.
As with the circle of life, when you’ve finished with it, it will give hard working honest people like me something to sell for you when I finally come out of the cupboard.
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