Used car prices falling, warns Glass's
26 October 2009
Used car prices at auction have seen a noticeable downturn, according to RV experts at Glass's.
"The middle of September marked a watershed," explained Adrian Rushmore, managing editor at Glass's. "It coincided with a further reduction in retail sales, just when the supply of trade cars was on the increase.
Rushmore warned fleets that conversion rates at auction have fallen at least 10% in the past four weeks, "with the result that more cars have been swelling the ranks for the next sale".
"For the first time this year trade buyers are in the driver's seat - there is no urgency to buy for stock and there is the belief that prices have further to fall. This is why we think that the wholesale market will remain very difficult between now and the end of November. The duration of this difficult period will depend upon the speed with which the auctions, wholesalers and rental companies can reduce their inventories.
"There are concerns that if auction vendors hold out for unrealistically high prices it will take longer for the backlog to clear. Experience tells us it is more likely for the leasing and fleet companies to fall into this trap of holding cars beyond the average 12 to 14 days.
"We think that vendors' attitudes will harden when we move into December because many are likely to close their doors for business and not re-open until the New Year. This decision will be based on the reasonable assumption that prices will increase at the start of the year."
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