CAP – the used car price specialists – are warning that used car prices, particularly ‘almost’ new car prices, are set to tumble as nearly new cars hit the market.
The car market in the UK has proved amazingly resilient to the general malaise in the economy, with new car sales continuing to rise strongly and used cars seemingly immune to big depreciation drops.
But CAP – who gauge used car prices for the motor trade – are warning that this could be about to change as the impact of recent trading in new cars is about to start impacting on used car prices, particularly prices for cars less than a year old.
They cite a big rise in new car sales to rental companies causing an influx of cars just 6-9 months old entering the used car market and the strong discounting of new cars to retail customers as car makers look to make sales in the UK to off-set a drop in new car sales across Europe, as the cause.
You can probably add to that equation the practice of ‘Pre Reg’ for new cars, where dealers register new cars to hit sales targets and subsequently sell them as used – with just a handful of miles on the clock – at anything up to 25 per cent below the new retail cost.
All that adds up to market place where buyers – business and private – can get such a good deal on a new or Pre Reg car that they would only consider a used car if the savings are significant.
Editor of Black Book Live (CAP’s live pricing system for car dealers), Darren Martin, said:
While we are sounding some cautionary notes about the on-going picture for trade values, we do not expect the market to go into free-fall.
Values may well drop for the reasons we have identified, but they have not done so for some time. Depreciation is a fact of life and we should not be too downbeat that it is happening again.
So the lesson appears to be that if you’re in the market for a used car – particularly one less than a year old – you might be wise to wait a few months to see if CAP’s expectations became a reality.
Either that, or make sure you’re not too picky about spec on a new car and seek out a Pre Reg new car instead.
Tramp12 says
The pre reg advice is good but doesn’t the existence of plenty of pre reg cars from most makers already impact on used car values?