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Used cars face tough year end

The used car market is predicted to suffer a tough final quarter in the face of increased stock levels and aggressive new car discounts.

Mike Pilkington, managing director of Vehicle Remarketing Solutions, suggests dealers’ used car buyers should look carefully at the stock they are selecting at auction to ensure the retail preparation can be kept to a minimum.

“In recent weeks used prices have hardened on the back of poor new sales and a lack of quality part exchanges,” says Pilkington.

“While dealers can continue to expect good business from the used sector, prices may come under pressure from discounting by franchises on new stock and an increase in used supply from September’s rental defleets.”

His view is echoed by analysts at Parker’s Price Guide. Simon Harris, consumer editor, says carbuyers will ask themselves why they should choose a nearly-new car when a new one with full manufacturer warranty is only a few hundred pounds more.

“Generous discounts on new cars over the next few weeks will make cars up to a year old much harder to sell,” he adds. “However, diesel 4x4s continue to sell well on the used market with customers prepared to pay premiums over petrol equivalents.”

Harris says other niche cars – sportscars, coupes and MPVs and premium-badge cars – occupy a growing share of the market as more buyers look for vehicles better suited to their needs or stronger ways of expressing themselves through the cars they drive.

In its updated guide to valuation, appraisal and presentation, the RMI is encouraging dealers to concentrate on quality used stock that can be turned around quickly.

“Access to the latest information is vital to dealers, and this guide delivers sound, practical advice,” says RMI director Sue Robinson.

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