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Used market remains consistent and stable, VRA claims
According to the Vehicle Remarketing Association, the market still shows signs of smaller cars being those with the best profit margins, as used car buyers continue to downsize their motoring requirements to benefit from reduced running costs.
Therefore, it added, five door cars are now being widely sought after at the smaller end of the market due to their increased practicality and are now for the first time commanding a price premium over three door models. Petrol remains the preferred engine of choice at this end of the market.
Trade buyers are becoming more choosy about what they bid on and ultimately buy, the association said. The less desirable cars in the wrong colours are now proving very difficult to shift, so adjusting the reserve price accordingly may be the only way to sell them quickly.
Buyers are also increasingly looking to purchase cars that are ready to retail, which means more vendors are spending money on refurbishment before it is offered for sale. The majority of cars are seeing a benefit in refurbishment with higher prices and first time conversion rates.
Demand for hire cars is likely to stay high across the summer with more visitors entering the UK due to the Olympics. Fewer cars are being defleeted and are remaining on the fleet sometimes for two to three years. Currently this works well for the industry as there is a general shortage of two year old cars in the marketplace, so when these vehicles are defleeted, they tend to make good money, the VRA claimed.
The traditional 6-12 month nearly new used car market continues to be under severe pressure from the aggressive new car deals on offer by manufacturers and their dealers. Consumers who are in the market to purchase a car are now looking at a new instead of a nearly new car and so prices have fallen and are likely to remain under pressure in the short term.
The VRA also claimed the DVLA is proposing to cater for those motorists who are thinking of buying a new car in March 2013 but are incredibly superstitious to avoid the unlucky number 13.
The DVLA is proposing motorists who buy a new car registered from 1 March 2013 to 31 August 2013 can choose to have it registered as a 62-plate, effectively keeping it the same as vehicles registered from 1 September 2012 to 28 February 2013, until it naturally reverts back to the regular plate pattern which will see the 63 registration appear on 1 September 2013. This is great for those who regard the number 13 as unlucky but it could cause a challenge for the used car market. Those picking up on the anomaly will value the car correctly, but those who don’t may offer drivers considerably less for the car than it is worth just based on the registration plate. Something for the used market to consider in spring next year.