As the motor trade braces itself for the expected (we hope!) Christmas rush, there seems to be a kind of “do I or don’t I” attitude prevailing among many dealers.
Auction houses up and down the country seem to be packed to the rafters with cars and certainly lots of potential buyers. However there seems to be reluctance by vendors to accept the current market conditions and buyers are really being, for the first time this year, frankly a little bit picky.
At the auctions most cars are achieving no more than average trade guide price. The situation, however is fluid and changeable, no sooner will we announce that the market has dipped it can just as easily turn again.
We have also heard of some customers looking at buying used cars before the “VAT increases” and in most cases VAT is not applicable to used cars but buyers have once again looked at the headlines and thought that it applied to a used car purchase too. The dealers of course will be happy to just keep taking the enquiries.
Strangely, after talking to a couple of dealers over the weekend, business seems to have suddenly picked up and showroom traffic is markedly brisk. It is well documented, certainly by us, that new car prices will be far higher next year and buyers, looking to take advantage, have clearly brought their car purchases forward.
What we don’t know is how many of the “switched on” buyers who have taken advantage of these factors, would have usually made their purchase later next year or perhaps the year after.
What will happen, in all probability, is that demand for used cars will start off as a slow burner and subsequently fill the gap left by the new car conundrum and absolutely catch fire. To avoid the overheating of the used car market once more many car makers, anxious to keep the factories building cars will need to sharpen their pencils and take a long hard look at the pure economics of the situation.
They will need to implement innovative buying solutions to ensure that buyers ultimately still have a choice.
Failing that the record levels that used car values reached in the middle of this year may very well be trounced in 2010.
