A ‘SLOWER THAN USUAL’ start to 2013 gave way to increasingly brisk trading in the used car market as January wore on, according to CAP, the car information experts.

Black Book Live – the only real-time independent guide to used car trade values – only began tracking prices upward around the middle of the month, according to Senior Editor, Derren Martin.

Two factors appear to have driven the eventual increase in trade appetite for cars. Number one was a growing concern among dealers that they might be caught short of stock, as it became apparent that there were fewer cars available than typical for  the start of the year. This was then coupled with a determination to snap up the best cars as soon as they appeared.

There is now particularly strong demand for the cream of 3 year old stock – the ‘bread & butter’ of the used car retail market – an area of the market where stock is more scarce than it has been.

Although demand did pick up, Derren Martin sounds a cautionary note on the future prospects for market price stability as the struggling economies of Europe may cause manufacturers to focus on the UK as their best bet to increase new car sales.

He said: “Stability is the watchword at the moment as dealers enjoy healthy retail sales.

“They are prepared to compete for the stock they can most easily turn into prime retail offerings and Black Book Live has been tracking values on the rise since the middle of January.

“Many of our franchise dealer contacts in particular have  been telling us their sales are, if anything, stronger than at this point last year and even margins are holding up – which demonstrates that consumers are also prepared to pay for quality instead of simply buying on price alone.

“However, manufacturers are having a very tough time in Europe and may well look to the UK this year as their best opportunity to keep the wolf from the door. The current relative strength of Sterling against the Euro also makes Britain a stronger prospect for maintaining profits on new cars.

“If supply of new cars is increased significantly, through large-scale rental deals or pre-registration, it will probably stem the increase in trade values at some point.

“But even if that happens, many dealers will welcome the availability of more prime retail stock and consumers will also benefit from increasingly competitive deals as more cars are managed into the market.”

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