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Accurate valuation critical during poor retail demand

Every one of us in the trade has fallen foul of the wrong car from time to time - it is an occupational hazard. But what is the 'wrong' car?

Well, the answer to that can vary according to circumstances, but at the moment you have to be especially suspicious and cautious of big, older smokers - because everyone else is.

The danger at the moment is a lack of retail demand, which makes valuing cars properly more critical. And it is the older, 'bitty' and apparently Cap Average cars which you would normally spend money on to bring up to retail standard that need to be watched most carefully. People are steering clear of them.

The inevitable impact is on prices and even if the car looks cheap you can still be well out on it - and certainly more wrong than on a typical late plate vehicle.

Look in any auction and you will see these cars attracting the most cautious bids. Cars like the Citroen XM, with mid to high miles, in bitty condition can easily be valued £500 to £1,000 adrift of reality.

I recently watched an average condition high mileage 2.0 GLS Omega manual, on a 95 M, with patchy history make £3,250 - within £25 of Cap below average. The buyer had appraised it properly and really done his homework. It would have been easy to mistakenly view that car at average money - £4,200 - and immediately been £1,000 out of bed.

Most people in the business can value a 97 or 98 Mondeo or Vectra within £200 of its actual value but on a £2,000 car you can easily be 50% wrong. And of course anything like this tends to become a self-fulfilling prophecy.

The trade knows it can be risky so the auctioneers look more closely at their options - whether to retail the car or trade it. Their increasing reluctance to commit causes falling values and further caution, until some cars are said to be unwanted.

This is not a problem if you are at the block every day and in a position to appraise the car properly - and see how everyone else is viewing it. But the people who run the greatest risk of falling foul of these vehicles are those stuck inside dealerships, slightly detached from the job.

Another car I watched recently was a K-plate 3.0 RXE V6 5dr automatic Renault Safrane, with all the bells and whistles. An ex-company car, with 80,000 miles and in metallic silver - the best colour. This big lump was a lot of car at trade value but nobody on the day wanted it, the bidding never became serious and it didn't sell.

A small, frankly uninviting car like a similarly-aged Fiesta might not have had them clamouring to own it - but it probably would have sold.

There is always a market for the cheap car - as long as it is cheap to live with as well. It explains many apparent anomalies where luxury-spec, cheap executive cars fetch less money than the small, basic, non-power steering 3dr hatchback.

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