Here’s the Silver Lining!
27th May 2008
The credit crunch and unusual conditions in the market are producing an extraordinary bonanza for local car buyers.
A significant oversupply of used cars on the market nationally and consumer nervousness about spending have resulted in a fall in trade prices, which is producing some of the best deals to be seen in the showroom for years.
Used cars are now cheaper in real terms than they were a decade ago, according to a major industry survey.
“It is certainly an unusual situation,” says Tony Wright, the boss of leading North Lincolnshire used car supermarket Eddie Wright.
“The situation was highlighted at a recent national conference by one industry expert who drew attention to the fact that, for example, a three year old Ford Focus 1.6 LX is selling for exactly the same amount of money today as a three year old 1600 LX Escort was making in 1996.”
“When you factor in inflation over the past decade, not to mention the fact that the Focus is a far superior motor car, that is pretty breathtaking.”
Tony said: “ Trade prices have been declining since the autumn last year in the face of an oversupply of vehicles and the March plate change produced a further influx of part exchange cars.”
“The result is that we’re getting cars cheaper – and everyone is cutting prices to do deals.”
“Actually we’ve been bucking the industry trends in terms of business here at Warren Road for most of the year. We had an absolutely cracking first quarter – with sales numbers up 20% on last year – but April was difficult, so perhaps we’re not as invulnerable as we thought!”
Asked how they had beaten the general industry performance, he said that the key factor had been the firm’s reading of the local used car market.
“North Lincolnshire is a pretty normal part of the country and the big demand over the past couple of years has been for mass market used cars in the £4,000 - £7,000 range. We’ve concentrated on developing our stock of vehicles in this price bracket.”
“We’ve also addressed finance at a time when the banks are clamping down on lending. Their share of the market has apparently dropped 20% in the past year but there’s no shortage of money in the motor finance market and there are some ultra-competitive deals available, up to and including 0%.”
Looking ahead, he said: “Read all the gloomy headlines and it is tempting to take the view that as money becomes even tighter then cars are going to get cheaper and cheaper.”
“That could happen of course but clearly dealerships will get their stocks in line with the market and inevitably people will get fed up with waiting to change their cars. My instinct is that we are going to see prices bounce back, possibly quite sharply, later in the year.”
Further information or comment please contact Tony Wright at Eddie Wright on 01724-270755
