Confusion continues to reign supreme in the offices of the professional trade guides. After Managing Editor of Glasses Guide, Adrian Rushmore, predicted that the used car market would start to stagnate in October due to seasonal downturns and falls in demand, and a better supply than in recent months (Trade guide claims used car prices have stabilised) it is therefore somewhat surprising that values in his guide have risen by an average of 2% in the October edition. So what is it? Is the market continuing to rise or starting to fall? Well I suspect a bit of both. There will be some cars which are affected by the fact that buyers are not able to get their hands on new and this in turn dictating the value of their used equivalent, and there will be cars which have clearly peaked in terms of what dealers can market them at. One fact remains however; a nice car with good spec and pedigree will continue to sell and sell for premium money. From a consumer point of view buyers should compare prices more vigorously than ever, because if the trade is confused about what cars are worth then customers will be even more so.
By checking out Autotrader, or indeed looking at a dealer’s website, buyers can soon establish by the volume of cars being offered in his chosen category just how much choice and price swing there is and whether it’s worth paying a premium if there are several to choose from.
From our perspective and from canvassing opinion from many ‘trade’ people across the board from a variety of franchises and independents there is a feeling that things have definitely reached a plateau but that stock is still in relatively short supply. Nobody is prepared to make bold predictions either way and most are proceeding with caution and having the attitude that if they have to pay top dollar on the wholesale market it will be for a car they are sure they can sell, although not necessarily at a premium price.
Another source of concern is that because trade guides were a good distance behind the market for long periods of the early part of 2009, and recently where they have risen steeply, relying solely on the guides for an accurate valuation could lead to big trouble.
There only needs to be a sound consumer offer with a low rate finance deal on a particular car to de-value that same car second hand, and therefore obtaining a firm underwrite for certain cars is a must.
Although used cars are still selling, reality should hit home and trade people should realise that making sure the basics are strictly adhered to is more important than ever.