Thursday 4th April 2013

Drop in used car values predicted

CAP warns of "shadow hanging over the market" after long period of strength

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CAP, publisher of the Black Book car price guide, has warned that there’s a “shadow hanging over the market” for used cars. The company says that a stable first quarter in which new and used car values prospered, at odds with the economy at large, may be followed by a “gradual erosion of values at most years and for most models”.

Drop in used car values could be imminent

It attributes this prediction to an increase in the number of new cars being sold to rental companies and “aggressive incentivising” of new car retail sales. The flooding of the market with cheap new cars, CAP says, will inevitably result in a knock-on effect for used car values, and the fact that many of these new cars will be re-released to the market six to nine months later when their time with the rental companies is up won’t help matters.

And while the mass-lowering of the values of humdrum everyday fodder might not seem of much concern to us here at PH, it should be – a drop across the market will have an effect on the more interesting end, too. Great if you’re planning to buy; not so much if you’re planning to sell.

"Free-fall" is not expected, according to CAP

All is not lost, though – CAP also notes that strong retail demand for second-hand cars in 2013 means that prices may not drop as hard and as fast than they could. Black Book Live senior editor Derren Martin said: “Whilst we are sounding some cautionary notes about the on-going picture for trade values, we do not expect the market to go into free-fall. Values may well drop for the reasons we have identified, but they have not done so for some time. Depreciation is a fact of life, and we should not be too downbeat that it is happening again.”

[va1o]

Not what you want to hear after just making a purchase! Lets hope its not a repeat of what happened in late 2008 when the market collapsed.

[Bear Phils]

Eeeeeeeeeeeeeeeeeeeeeeexcellent

[y2blade]

[bluerainer101]

Print this article off and take it to your used car dealer next time your after a 2nd hand motor, I'm sure that they'll love you for it!

[dublet]

[anonymous-user]

Hmmm - "Freefall is not expected" - that's a raging certainty then. There is massive over-supply and has been for ages - mainly because we continued to buy cars even when the money ran out. Now we find ourselves in some nightmarish Tory Narnia trying to shift a knackered A4 with silly wheels and a DPF 'problem' - Quality.

[georgetuk]

Really pleased about this, feel sorry for owners but I have the cash to buy.

Some stuff has been over priced for years!

[Deva Link]

I saw a comment on another forum from someone who regularly attends auctions and he said in the last couple of weeks the number of provisional sales has rocketed.

It is amazing how new sales have held up here though - elsehwere in Europe they've been pretty decimated.

[telecat]

Motor Trader also reckon the second hand market for ex fleet diesels could be a problem as well. The fleet market is buying larger diesels while the Private market is preferring small petrol engined cars.

[Bill Carr]

So CAP says values might drop a bit, but possibly they might not drop quite as much as they think they could.

Fascinating analysis.

[fartIN'ajar]

For the avarage punter why would this matter?

Your car is worth less, but a new car is cheaper to buy. If anything this will help the cost of insurance.

[astra la vista]

Bill Carr said:

So CAP says values might drop a bit, but possibly they might not drop quite as much as they think they could.

Fascinating analysis.

beat me to it


"the Black Book car price guide, has warned that a drop in used car values could be imminent.

Black Book Live senior editor Derren Martin said: “we do not expect the market to go into free-fall.”

[Justin Case]

Looking at the range of three year old cars currently for sale, I am more worried about the lack of choice of decent largish (2-3 litre) petrol engined cars than any movements in price either way.

[fjord]

fartIN'ajar said:

For the avarage punter why would this matter?

Your car is worth less, but a new car is cheaper to buy. If anything this will help the cost of insurance.

+1

Does it matter if a used 330d is £28k? If they're going to give me £7000 p/x on an Astra or something, it doesnt matter.

[Tonsko]

va1o said:

Not what you want to hear after just making a purchase! Lets hope its not a repeat of what happened in late 2008 when the market collapsed.

...about 10 months after I'd spunked 16K on the r32

[JuanGandini]

Justin Case said:

Looking at the range of three year old cars currently for sale, I am more worried about the lack of choice of decent largish (2-3 litre) petrol engined cars than any movements in price either way.

Me too! Trying to find a decent 135i coupe for less than £15k is proving fruitless!

[richb77]

fartIN'ajar said:

If anything this will help the cost of insurance.

Snow balls chance in those doing anything but rise.

[Backtobasics]

Justin Case said:

Looking at the range of three year old cars currently for sale, I am more worried about the lack of choice of decent largish (2-3 litre) petrol engined cars than any movements in price either way.

Its amazing how few there are, just out of interest (not buying!) I looked at 0-3 year old passats, I think there were 3 nationally for sale on trader that were petrol.

I wont have a diesel due to the low miles I do, so I think I am going to be limited going forward.

[dingocooke]

Its a classic non story, 'prices might drop, prics wont go into free fall, etc'
CAP didnt predict any of the other big changs in the market, why should we expect them to be right now?

CAP have always been hand in glove with the motor trade; surely just a ruse so dealers can ream you a bit extra on a part ex 'have you seen the CAP prediction blah blah blah'

[Captain Muppet]

Bill Carr said:

So CAP says values might drop a bit, but possibly they might not drop quite as much as they think they could.

Fascinating analysis.

Useful to know prices aren't going to rise, so the story isn't entirely without value.