Used car prices were at their highest in history in September 2009 and the craziness of the used car market this year has got dealers all jittery yet again, actually correction, make that the whole car market. If car sellers have been confused this year then we can only imagine what consumers must think. On the one hand they are told the car market is on its knees only to see prices steadily rising as the recession worsened and then watch as some car makers were literally giving away new cars while others were actually increasing prices!
As we enter the last part of what’s been a tumultuous year, the good news is many dealers have told us that it has been an unexpectedly profitable one, indeed one told us that if you haven’t made a profit or at least achieved your plan this year then you are in the wrong business.
So what now for buyers?
Well, for the moment at least, there is certainly a thaw in prices and this could be the time to buy. With many dealers panic stricken thinking about what happened at the same time last year many will be equally panicked into lowering prices and disposing of stock in the belief that customers are holding back or, worse still, disappearing. If this does happen again this year then we suspect there will be rather more brave speculators investing in stock as the prices fall than there were last year. It’s now well established that traders could have made fortunes buying up big 4WD’s when no one wanted them and selling them on at a vast profit when, it appeared, everyone loved them again.
Although we believe the latest price movements are a seasonal adjustment and prices may dip for a short period they could even do the unthinkable this year and rise again before Christmas. This is because the same circumstances are in place which have been apparent all year, the new car market is half a million units down year-on-year and scrappage, which has accounted for 400,000 units, has not introduced any part exchanges. The scrappage scheme, if anything, has worsened the supply of used cars in the super mini sector which is the “go to guy” in a recession anyway.
With VAT set to rise again and prices continuing and upward spiral to offset currency issues, the time has come to bag a bargain even though it may be in a limited window of opportunity.
One thing is for sure, prices will be lower in almost every sector than they have been for the last 6 months so hold back no more.