Saturday, 28 April 2012

Volatile Prices Continue at the Car Auctions

The National Association of Motor Auctions have announced that average prices achieved at auction in March fell by just over 3%, whilst Manheim's report focused on the dealer part - exchange sector which rose by 4.6%. What both reports agree on, however, is that increased volume is putting pressure on prices. So what does this mean in the real world? Well, the dealer part - exchange sector typically includes much older vehicles, so the prices are most likely being propped up by the private buyers. This is reflected by the number of later vehicles not selling, and the fact that many franchise dealer groups reporting that they are heavily over - stocked. At first view, this may appear to be an ideal opportunity to grab a bargain on a sub - 3 year old vehicle, but there are several factors to consider before rushing down to the local auction centre. Firstly, the downward pressure on prices is likely to continue, as dealers will only be buying selectively, and less desirable vehicles will attract fewer bids. This will then be compounded by the trade guides slashing values to give more accurate indications. Furthermore, overstocking at dealers and the continued slower retail demand, as well as the constant pressure to achieve new car registrations is likely to result in aggressive pricing and deals to clear over age stock. Obviously, this would, in turn affect trade values again, and force auction prices lower still. The experts are playing all this down, reminding us that this usually happens in registration months, it's a short - term situation, and that April's forecast is "stable". However, talk of a shortage of supply only really applies to premium stock and particularly well - specced vehicles, and when supply is greater than demand, price is always affected. In conclusion, again, the canny buyer will probably get a fantastic deal on a main dealer forecourt. Any auction buying, as ever, should be carefully researched.
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