Your used vehicle could be worth more than you think
With used car values on the up and a shortage of used car stock, you could find your car is worth more than you think making it even more affordable to purchase a new vehicle.
The advice to would-be car-buyers from Glass’s Guide, publisher of the motor retail industry’s used car valuation ‘Bible’, is: buy now!
Glass’s Guide reports an unprecedented 25 per cent rise this year in prices of cars up to one year old and with used car stocks at an all-time low, it predicts prices may rise even more. In fact, the experts at Glass’s predict that as an average, used car values by the end of the year will be 16 per cent higher than they were in December 08.
British Car Auction (BCA) reports the same trend in its Pulse report for July which shows that used car values are continuing to rise as average auction values increased for the ninth month running. Average values across the board reached £6,028 in July - a substantial £178 (3%) increase over June’s figure of £5,850 and breaking the £6K barrier for the first time on record.
Year-on-year values are now £1,079 or 21.8% ahead of July 2008 – reflecting both that values were falling sharply this time last year, and that 2009 has seen sustained improvements in value. The rise in used car values has also had a knock-on effect on part exchange values which in July saw another rise, for the seventh month in a row.
“The remarkable and unparalleled recovery in prices since January might appear out of step with a depressed economy, but in reality the higher prices stem more from the limited supply of used cars rather than a significant increase in retail demand,” says Adrian Rushmore, Managing Editor of Glass’s Guide. “Consumers should be warned that prices are not expected to fall in the coming months, as the supply of vehicles becomes even more constrained.
“Since the third quarter of 2008 the very depressed new-car market has seen fewer cars registered – particularly as short-term rental vehicles and dealer demonstrators – leading to an all-time low in the supply of younger cars for sale. Consequently prices have risen, in line with the laws of supply and demand.”
This pattern has been repeated in the market for older second-hand cars, where similarly limited supply has driven up prices despite the economic downturn.
New car sales have fallen 30 per cent in the first quarter of 2009, leading to a significant reduction in the volume of part-exchange vehicles – a common source of used vehicles – entering the second-hand market.
As well as the increase in new car values, manufacturer’s are typically running some fantastic new car promotions which means now could really be the best time to part exchange your current vehicle for a brand new ‘59’ registration.