An upbeat used car market, but is more pressure just round the corner?
Written by: Derren Martin
- Used car market remains relatively buoyant
- Depreciation generally in line with CAP's forecasts
- Smaller cars under slightly more pressure
- Concerns remain about new car volume pressure
The month of June has so far proved to be a fairly buoyant one in the used car market. Consumers are still buying and in general forecourts are busy. Stock levels in the auctions remain high, but this is well matched by demand from dealers looking to replace their stock.
Having said that, there is not a buying frenzy and as a result of these high volumes, buyers can afford to be fairly choosey and avoid competing too much with others, in the knowledge there will be similar cars to follow. As a result, Black Book Live values have generally edged down slightly during the first 2 weeks of the month, replicating a dip in prices in the open market.
When speaking to dealers this month one thing that has become particularly apparent is concern over new car volumes. Whilst registration growth was modest in May compared to previous months, June is the end of a quarter and many manufacturers seem to be ramping up the pressure on main dealers to register more and more cars.
Margins are a particular concern, but also what effect will this have on the used car market? It is reasonable to expect increased pressure on values, particularly if pre-registration activity is rife.
Black Book Live will continue to report pressure on prices, which may well be more severe on latest plate used cars, those that compete the closest with new vehicles.