Used values rise

Despite gathering recession and the slump in new car orders, used car dealers are reporting strong retail demand and paying anything up to £500 more for a three-year-old standard volume vehicle than at the start of the year.

According to the March edition of Black Book trade guide to used car values, late plate cars are especially strong, due in part to weakness in the new car sector leading to dramatically reduced supply.

A notable feature of the current market is increased demand for stock from franchised dealers in particular who would normally rely heavily on the influx of part-exchange cars from new vehicle sales, along with nearly new cars generated by the pursuit of new car volume bonuses.

Another emerging factor in the shortage of used stock is the export of used cars to the Irish Republic and even to some left-hand drive eastern European markets, sparked by the weakness of sterling.

All the market performance indicators measured by Black Book moving into March showed unusually strong results, with ex-fleet car conversion rates in particular enjoying a historic high at around 90 per cent – compared with less than 75 per cent for the same period a year ago.

Recent weeks have also seen dealer stock purchase activity at an all time high, with showroom visitor traffic at its strongest for two years.

One of the most remarkable features of the current market is the relative performance of used car sectors.

For example, for the third month running, 4x4s are leading the charge toward higher values while even the usually oversupplied small executive car sector records an average rise of almost six per cent for March.

CAP senior analyst Jason Owens warned, however, that sustained recovery in the used car market is not guaranteed. He said: “The market is enjoying a strong rally following last year’s historically severe downturn but underlying economic factors remain troubling.”