As comparisons are being made by some industry commentators to last year’s market, there are many in the trade who consider such comparisons unfounded. Such was the bounce back last year it is possible that we may never see a year like it again.
Of course the scrappage scheme helped enormously and impacted greatly on a unique situation but used car values still continued to rise month after month. Therefore dealers could confidently keep prices at a premium but at the same time retain such stock for longer knowing that it would probably cost more to replace and also be very hard to come by.
The car buyers who bought in the first half of 2009 clearly had an advantage as prices really began to rise after bout May, and as a result dealers who had cars in stock for any period of time could still be confident of not losing money as values normalised.
As we have seen, used car values and depreciation patterns are now following the more usual trends and therefore a better comparison would probably be made with 2007, and if that really is anything to go by generally now is the quiet time followed by a peak in August and September.
The crucial aspect for dealers this year – and where switched on dealers will benefit greatly – is with car values receding by as much as 4% per month, pricing stock aligned to market conditions will ensure that with fewer buyers about there is a far greater chance of selling cars quicker and also not having the cost burden of a depreciating used car stock as it ages.
Customers will benefit from this as they will invariably enjoy a greater choice, especially with more basic volume models.
One shouldn’t underestimate the advantages of finding a car at the correct price and completing a deal at precisely the right time, in quieter trading conditions.
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