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Trade experts predict return of realistic prices and New Year increases
publication date: Nov 19, 2009
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author/source: Robin Roberts
| Last month’s fall in trade prices for prestige-brand
used cars should allay growing concerns amongst dealers about
unsustainably-high prices, suggests Glass’s. | | “This decline had to happen but the trade had grown
nervous about the timing and extent of the price falls,” comments
Richard Crosthwaite, Prestige Car Editor at Glass’s. | “We believe prices
are following the same pattern for the time of year as in 2006 and
2007, suggesting that the massive correction in prices witnessed this
year is now complete.
“Until next month the market is likely to remain short
on buyers, and we have already seen lower conversion rates at auctions
over recent weeks. In December I believe we will see the pro-active
dealers buying cars ahead of January’s anticipated uplift in values.”
As with the wider used car market, prestige car values
had been rising all year, but this phenomenon finally ran out of
momentum in early October. | | Customers who visit Renault dealer Gravells tomorrow could be forgiven for thinking that staff had overslept as
the dealership is hosting a pyjama party in aid of Children in Need!
All of the staff at the dealership in Kidwelly will be coming to work in their pyjamas to help raise money for the
BBC appeal. Throughout the day, customers will be encouraged to make
donations as well as try their luck at guessing the number of balloons
in a Renault Clio in return for pledging £1.
The closest guess will win
a brand new MP3 player drawn at the end of the day. | | | “Seasonal factors came into play and dealers were better
stocked – especially with late-plate product – at a time when retail
demand started to decline,” adds Crosthwaite. “Dealers had been unable
to increase retail prices, margins had declined and, in some instances,
over-age stock re-emerged as an issue.”
These factors have put pressure on most areas of the market, including
prestige-badged models. “The growing volume of late-plate product has
had an impact on used-car values, and this could be an ongoing issue.
Late-plate values of some models still appear too close to cost new,
and I expect values of these cars will ease back in 2010.”
Crosthwaite says the cars that have fallen most in the prestige segment
in early November are the volume-selling variants from the most popular
ranges, along with all cabriolets. Not all segments have been hit, with
many 4x4s still holding up well, along with certain luxury saloons and
sports coupes.
“I would be surprised if we didn't revert back to patterns of business
akin to 2006 and 2007, with values dropping an average of two to three
per cent per month until we see a rise in demand from mid-January
through to spring,” adds Crosthwaite. “The key difference between then
and now is that there will be less trade supply and lower retail
demand, but dealers are now much better at retaining profit margins
based on faster stock turn.”
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