Well I guess it had to happen. There are suddenly more cars for sale and a far greater choice and cars which were the subject of frenzied bidding only a matter of weeks ago are now making up to 20% less.
This is not the disaster it may at first seem however, it just means that the market has stabilised and that values are now moving more in line with what you would expect for the time of year. For example it is about this time of year that the values of most convertibles start to ease off significantly as demand wanes. The problem is that dealers who are taking in this kind of stock to send to auction still believe that they can stand it in at August money and get it through the auction.
The gains made in the last six months can easily be wiped out unless great care and consideration is taken when valuing stock which is unfamiliar to a dealer.
A very experienced sales manager contacted MTI and explained that because, for the most part, the guides have been playing catch up managers have been standing in stock ‘into book’ this year, they have not needed to take advice or have a car underwritten such was the scarcity of stock. Now, however if they look to value trade-ins from the guides alone they will come a cropper very quickly.
From a customer perspective it may just be the best time to buy for a number of reasons.
This is traditionally the time when dealer groups kick off large scale sales promotions where the savings can be as seductive as they are genuine. There could also be some panic at the sudden drop off in enquiries and coupled with more choice this could lead to dealers striving to do better deals as businesses will be under pressure to get the inventories down and some cash in the bank to please the shareholders.
Many rental and leasing companies will finally start de-fleeting their cars into the market and it is noticeable that the once empty auction halls are rapidly filling up with cars once again, some of which will be the last of the September trade-ins but also with a more varied profile of stock.
One thing’s for sure, although in the long term the new car market is still well down and therefore used cars will continue to be scarce there could be opportunities for alert buyers to bag a bargain in the next few weeks before this volatile market gets shaken up and the situation changes yet again.