Is Now a Good Time to Buy a Car?
The UK car market has been behaving very very strangely during the past year. Some experts say that used car prices are going to rise, others say they are going to fall.
Actually, they are both right.
THE NEW CAR SUPPLY PROBLEM
In 2009 the UK car industry had fields full of new cars that no-one was buying. The credit crunch had hit and people weren’t splashing out on a new car.
This had two results:
1) Manufacturers reduced production levels of new cars.
2) Demand for used cars went through the roofbecause people saw them as better value (more on this below).
This production reduction (I like the way that sounds; ‘production reduction’) meant demand eventually caught up with supply. But worried the same thing might happen again, many manufacturers have STILL not increased their output.
Because of this, the situation is now reversed and many new cars have huge waiting lists and no discounts available. Some Audis can be a 6-month wait, and we have one client who has been waiting patiently for their Nissan Qashqai since October!
WHAT ALL THIS MEANS FOR USED CARS
People are often unwilling to wait 6 months for a car, so they pay over the odds for a nearly new one.
Our ‘Bargain of the week’ is a good example (although quite an extreme one!).
Ferrari has a 2-year waiting list for new 458 Italias. The car we bought was £204,000 when new, 10 months ago. Such is the demand that £205,000 last week was an absolute steal as most are changing hands for £15,000-20,000 ABOVE the original purchase price.
And the situation is the same with a lot of more mainstream cars. Worse, if the price of a nearly new car is the same as a new one, this pushes up the prices of 1-year-old cars… and then 2-year-old cars… etc., etc.
Some used cars have actually been appreciatingover the last few months!
NOT ALL CARS, THOUGH
There are, however, still plenty of cars not affectedby these circumstances.
Fords, Vauxhalls, most French cars, lots of Japanese cars and many others can still be bought at good prices. We had a quote for a brand-new Volvo yesterday with a 23% discount!
So, if the car you wish to buy is currently very sought after, you will do well to wait until the prices adjustagain; however, be warned that this could be up to another year.
And how do you tell if a car is sought after?:
1) Find out from your local dealer what the waiting time is for a new car. Anything over 3 months and you’re in trouble.
2) Look at the prices of nearly new cars compared to the list price of a new car. If they are similar, that’s not good.
Or you could always bend the ear of a friendly Car Finder you might know…
(Founder & Owner)