Fewer Second Hand Cars Leads to Increase in Value
A growing shortage of used cars has resulted in an increase in their value this year. Vehicle valuation data provider CAP Motor Research Ltd., responsible for providing vehicle valuation data to the motor industry, has revealed that the normal 15% per year depreciation in used car prices has been reversed.
What normally happens in the used car market is a steady depreciation. But this year there has been a complete reversal with used car prices actually increasing month on month by about 3.5%. This is resulting in significant increases in used car valuations.
This trend is bad news for used car dealers and those looking to buy a cheap motor, but its great if you are selling your old car. The price rises for used cars in 2009 have been completely unprecedented. There’s been around 25 to 30% increase in prices for some used cars.
Some are saying that the effects of the car scrappage scheme will be short-lived. When the UK car scrappage scheme runs out of funding in October it is anticipated that we will see a reversal in this trend.
The car scrappage scheme was introduced to boost the ailing motor industry by incentivising the purchase of new cars. For some car manufacturers the scrappage scheme has been a big success. Government incentives have encouraged those considering a replacement car to choose a new model.
Back in April it was reported that, for the first time, some new cars were actually cheaper than used ones in the UK. Fewer used cars coming onto the market combined with a decrease in demand for new cars is cited as the cause.
There has also been a shift in the way that UK drivers are financing their transport needs with many opting for cheap car leasing deals or attractive van leasing deals rather than outright purchase.
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