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Used car market challenging in 2010 says Glass's

Supply shortages, tighter trading margins and limited retail demand will make 2010 a particularly tough year for used-car dealers.

With the expected return of seasonal used-car depreciation, success will depend on a greater focus on the procurement of trade cars and a strict policy of managing ageing stock, said Glass’s Guide.

Reduced supply of used cars in 2009 led to an increase in prices, despite a 7% drop in retail sales.

Adrian Rushmore, Glass’s managing editor, said: “Availability of stock will continue to be severely restricted in 2010, though price movements are more likely to reflect the seasonal changes seen prior to 2008.”

Vehicle shortages will be particularly apparent in the case of late-plate models (three to nine months old), as manufacturers limit their exposure to short-term business, especially sales to daily rental fleets.

“The situation will be compounded by the fact that, in the main, dealers are unlikely to be heavily incentivised to put on demonstrators or undertake self-registrations, though specific activities will vary considerably by manufacturer,” said Rushmore.

He added: “One-year-old vehicles will also be harder to source, after new-car sales fell by 27% during the final quarter of 2008.”

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