Can I get a used car bargain now?
According to a myth circulating in the public domain at the moment, there will be lots of bargains around in the used car market as we come out of lockdown. Whilst we cannot predict what is going to happen in the long run to used car prices, what we can say with confidence, is that for now there are no bargains out there.
Why? We hear you say. Surely car dealerships are slashing prices to entice customers back into their showrooms!
Yes, they are but
The used car market is all about demand. The reality, however, according to a recent article in Car Dealer Magazine, is that while demand has been growing from customers during lockdown, there is already a concern in the trade that restocking used cars will be difficult as there is a shortage coming through from the wholesale market.
The challenge car dealerships currently face is not selling cars, but the supply – as we know, high levels of demand coupled with a low level of supply, result in prices remaining firm.
Car factories around the world have been closed and are only now beginning to catch up with lost production. This has led to a lack of new cars coming into the market. Many people with lease car arrangements who would normally have changed cars in March and April, were unable to do so. These ‘end of contract’ cars are the lifeblood of the used car market.
The likelihood of car manufacturers making up lost production coupled with a lack of ‘end of contract’ cars filtering into the market and filling the used car ‘funnel’ is unlikely to happen in the medium term. For this reason, we predict that there will not be a return to ‘reality’ until well into next year.
And finally, a word of caution
Please remember, there are no ‘cheap’ cars. If something is priced well below market value, there is always a reason. Ensure you check the small print, particularly for ‘category’ cars, which means they will have been written off, stolen, recovered, or repaired. Provenance remains paramount in your search for your next car and we can support you on this journey.
Give us a call on 07946 579553. We look forward to hearing from you.