2009 has not only been a crazy year for the banking industry – which as we all know has seen many ups and downs… It has also been quite turbulent for the automotive sector too!
The Scrappage Scheme has made both the new and used car marketplace have many ups and downs. First and foremost it has boosted new car sales – which was its main intention, alongside reducing the amount of old cars on the road, but it also sent the used car market into chaos too.
The success of the Scrappage Scheme has meant that used car dealers have had a fantastic 2009. The fact that thousands of motorists sent their used cars to be scrapped meant that there was a severe shortage of used cars available…so the ones which were available were in high demand.
This was fantastic news for used car dealers as used car prices actually rose by 30% – a record figure. Bartering over the price of a used car was almost unheard of as dealers remained adamant that they would get the asking price they wanted. The only problem for dealers was actually being able to keep their forecourts full of cars.
It is only now in November that automotive experts have suggested that the price of used cars is starting to return to normal in what they call the ‘correction in prices’.
The Scrappage Scheme will start to run out of funds early next year which will have yet another effect on the automotive industry. It’s likely that new car sales will decrease as there won’t be as big an incentive to car buyers. This will also impact on the used car market as more used cars will become available which will mean that prices should see a slight decrease.
It’s not only the Scrappage Scheme that has caused used car prices to increase, it’s also the recession. People who may have previously looked to buy a brand new car may turn to the used car market to save a couple of thousand – creating a higher demand!
Used car dealers will be hoping for a recession every year!