Used Car Prices to Rise
Customers looking to trade in a used car this year could benefit from rising prices
Customers looking to trade in a used car this year could benefit from rising prices. According to CAP, dealers will be offering increased prices for second hand models in good condition. Mike Hind of CAP said "the New Year will be a good time to trade in a high quality used car. Our research shows that dealers are currently paying very strong prices to keep their stock levels up and that is unlikely to change any time soon."
Supply continues to be scarce for high quality used cars while "serious buyers" are already "out in force" to ensure that they do not run out of stock this year. CAP's Black Book research editor Mark Bulmer said "buyers spent December attempting to stock up and this was not only driven by the desire to beat an anticipated January rise in values. Research during December consistently revealed a genuine appetite for stock, underpinned by a positive level of confidence, to ensure dealers were in a position to get the year off to a good start. There is also a widespread acceptance that buying will need to continue in January and that they will need to pay 'all the money' for the best stock because it is so thin on the ground and everyone will be pursuing it."
Looking ahead to the rest of the year, CAP believes that supply constraints are unlikely to ease in the short term. Mark Bulmer said “the conversion rates for some December sales were remarkable, tipping 90% in some cases when we might ‘normally’ expect the figure to be well below 50%. This gives an indication of the current balance of demand versus supply and a pointer to the likely condition in the early part of 2011.”