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Used car market analysis, July 24

While there are fewer buyers at auctions than was the case in April and May, the ever-diminishing number of cars available has continued to engender competition among the trade-buying fraternity.

It is difficult to think of anything that will not readily find a new home, almost irrespective of make, model or condition.

Both the auction centres and the trade buyers are living hand-to-mouth.

Conversion rates have been high, at around 80%, in contrast to the dire position 12 months ago when sales were achieving close to half that figure.

Dealer part-exchange sales are still yielding profits against stand-in values and, even though they are not at the levels seen in June, no-one is disappointed.

Most, if not all, manufacturers are carrying significantly less stock of late-plate used cars than at this time in 2008 and less than at the beginning of this year. Some are claiming that their inventories have reached an all-time low, though in reality there are nearly enough cars to satisfy dealers’ immediate needs.

Furthermore, the rental season peak is upon us, with hire firms keen to deploy all available cars, at the expense of trade supply.

It would appear that prices have eroded little since hitting a high point a few weeks ago – even for recent high flyers like 4x4s.

Prices for three-year-old cars rose by less than 0.5% during the second half of May and in the first half of June they were static.

Opinion is that the market will not offer an additional supply of used cars, from any source.

The likelihood is that there will be fewer cars in trade circulation in the coming weeks, but dealers’ buying enthusiasm may only diminish slightly during the remainder of the summer.

While few would doubt that there will be less business available, there are no immediate signs of a dramatic slowdown.

 

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