The auction group, BCA, says that used car values are going up.
It says that the reduction in new car sales over the last few years has meant fewer cars coming to auction, and therefore rising prices. It might seem a paradox that used car values rise in a recession, but it is all a question of supply and demand – the fewer the number of new cars sold, the more they are worth when they are two or three years old.
BCA says that, in July, the average used car was worth £547 (9.7%) more than in the same month last year. BCA's Communications Director Tony Gannon commented, "Supplies reaching the wholesale used car market are quite significantly down on the peak seen four to five years ago. The combination of lower new car sales and the tendency for vehicle owners to extend their replacement cycles simply means less stock is available to be sold."
This situation might not last for much longer, however. The industry expects a lot of cars to be forced into the UK market in September, as southern European demand has collapsed. All those extra cars are likely to be pre-registered, which will force down the value of nearly new cars. Now might be a good time to sell an old car, and late September could be a very good time to buy a pre-registered new one, as dealers will be desperate to hit their monthly target for the all-important new registration plate.