Used car prices are still climbing

Used car prices have been all over the place since autumn 2008, and they are currently going up, albeit more slowly than earlier in the year. How has this happened?

In the latter part of 2008, the global financial meltdown that had been in progress since the spring was recognised by the press and public alike. In the ensuing panic, new car sales declined dramatically, and as a direct consequence the lack of part exchanges meant that the supply of used cars dried up. The public were in no mood to buy used cars though, and as dealers struggled to get rid of their stock in the face of large monthly drops in value, the used cars that did get sold got sold cheap. Additionally, the prestige market suffered from even greater falls in residual value as the market was temporarily faced with a spike in the number of repossessions and panic-sales by people desperate to turn assets into cash. This led to drops in value of some prestige marques of up to £5000, and even the mighty Ferrari 430 saw drops of around £3500 per month.

In early 2009 the supply of these cars had dried up, snapped up by the cash rich looking for bargains. By May, car prices were rising and for many marques, these gains in value took them right back to where they should have been in a normal market - the market effectively re-adjusted itself. A lucky few bought some very cheap cars in a period of around 4-5 months over the year end, but now there is a very short supply of good used cars, particularly at the Ferrari, Aston Martin and Lamborghini end of the market. New hypercar sales have stalled due to the strength of the Euro, and this has had a knock on effect on the used market, but that is a topic for another day!

So, in short - now is the time to buy a new car. Your part exchange is worth sensible money (again) and new cars still aren't selling. Go and bag yourself a deal.