Used car market settling down but some prices still defy logic

I have been doing the rounds this week canvassing opinion on how the market is, where it is going and how it will end up and not surprisingly there have been some varied replies. at the auctions I visited although prices were still fairly robust, they certainly weren’t as high as in previous weeks, in fact I bought 3 cars behind book if you please, something that hasn’t happened for quite a while I can tell you. It could be that I just got lucky and picked up some bargains or that the book prices have reached a plateau and buyers are becoming worn out by paying inflated prices. One chap who runs a successful fairly large city centre independent dealership told me that he was now shopping for specific cars which he knew were good sellers or cars which customers had specifically asked for.

The demand in recent weeks seems to have subsided although stock still seems thin on the ground, some of the lanes at auction are not even being utilised. Although dealers are still turning stock over, profits are now being severely threatened and stock is starting to stick around that bit longer than before.

Customers have not got the message about the dearth of used cars and are still being very specific about colour and spec, but then if prices are at a premium many are prepared to hold on for exactly the car they want. Dealers have to work harder than ever to sell used cars but many are still telling us that they expect to end the year strongly and that the stock shortages will ease up in the coming weeks. Certain 4wd’s continue to achieve top prices especially Land Rover and German makes but one sales manager told me he had to pay well over the odds for a 05 plate Honda CRV with cloth, which is hardly in the top wish lists of most 4wd buyers.

The events surrounding the selling of ex-daily rental cars hardly seems to have been noticed by the trade and many are just re-iterating their process for ensuring customers do not receive false information. They do not consider that selling these vehicles represents any kind of problem as long as buyers know before they buy.

Small and economical cars are still the go to guys at present with prices holding firm and buyers wishing to trade this kind of stock in will at least have the satisfaction of getting top dollar before paying a premium on their next car.

Automatics are very thin on the ground and when a nice one pops up it is like a honey pot with buyers buzzing around it whilst it does its owner proud and makes well over the reserve price at auction. The scrappage scheme seems to be going a little quiet with many traders not mentioning it quite as much as before, although the fact that it has left a vacuum of quality trade-ins has contributed to dealers having to outsource more stock than usual for the time of year, rather than relying on the traditional trade-ins for new cars in September.

There are more cars being launched next year than probably ever before, the change cycles of cars are sure to be accelerated, and though dealers are anticipating a slower 4th quarter the business remains in fairly good shape.

Of course it doesn’t stop us all moaning about high prices and lack of quality, but then in the motor trade we do love a good moan don’t we!