Jul 30 2009 Chris Russon
Used car prices going higher
USED car prices are continuing to rise because of a shortage of supply, say industry experts.
With fewer new cars being built, the supply of ex-manufacturer and 'short cycle' cars - such as those sold into daily rental operations - is significantly down.
Car market monitors at CAP say that dealers are still desperate for stock despite a gradual slowdown in retail demand.
The economic slowdown has resulted in a reduced supply of vehicles up to one year old and with consumers buying fewer new cars, dealers are unable to rely on part-exchange models to fill the forecourt.
CAP's measure of auction conversion rates for ex-fleet cars revealed July to be the third strongest month this year, with 87.5% of cars selling first time.
The organisation says there is no early end in sight to supply constraints and expects further reductions in the number of cars returning to the used market over the coming weeks.
The impact of all these factors is a further average 1.5% increase in average used car values reported in the August edition of the CAP Black Book - the independent benchmark guide to used car trade values.
Despite the poor summer weather of recent weeks, among the stars of the market are convertibles and coupe/cabriolets which have seen value increases for August of 2.3% and 3.5% respectively, at 3years/60,000 miles. MPVs are also performing especially strongly.
The smallest cars continue to under-perform the market, in line with the past few months. This is driven by the fact that superminis and city cars do not have the same ground to recover as the rest of the market, following their strong performance during last year's unprecedented downturn.