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Used Car Market Analysis

The weather has really hit the auctions, especially in Scotland and the north-east. Low turnout and logistics are making for real problems for auctions, but this may actually play well for used values at the start of next year. 

This is because the buyers who are making it to sales are generally looking to acquire cheap stock. However, the more difficult it is to buy it now, the more they will have to pay in January when more buyers are out.

Most big players have already stocked up, mainly with nearly-new product. Large dealer groups have found themselves having to give strong money for packs of cars, especially in the case of VW and Ford product.

One of the most frequent issues revealed by research over the past six months has been the problem of margins for dealers. Despite relative stability in terms of retail sales, margins have been eroding. With expectations, by CAP and others, that used values will be stable or even rise slightly next year, dealers will face a real challenge selling to hard-hit consumers as spending cuts and tax rises kick in.

Top quality CAP Clean cars are very thin on the ground at the moment and where they do appear, competition has been strong amongst buyers. Some dealer groups with a close eye on the market have instructed sales managers to pay a little more for good quality stock, even if it may not be possible to retail the car immediately. This stock is then being moved to a site where it can sell more easily. This has been happening, for instance, with dealer groups representing multiple franchises taking in marques they could not retail and moving them to the relevant outlet.

Big players are well stocked, but not overstocked. Most are expecting values to jump for January, but still want to keep quite lean, just in case the year stutters to a start.
Quite a few motor groups have been counting heads and a large number of staff, especially at sales manager and DP level, have found themselves targets as cost-cutting and streamlining have become the new buzz words.

We expect the market to be prepared to pay strong money once we enter January. My personal opinion is that used values may well strengthen to levels comparable with the rises in 2009 by the middle of the year.

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