Vehicle valuations company
Vipdata has knocked an average of 4% off its used car values for
July, following a dramatic shift in market sentiment.
The company reports that
after a strong start to the year, the market suddenly changed in
late April, around the time of the extended bank holidays and the
Royal wedding.
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Traders noticed a lot of
unsold cars on the market and became much more selective about
buying. Auction houses became less well attended.
Bad stock also began to
appear, with a lot of poorly maintained cars available, which
either failed to sell or sold for far less than ‘ready to retail’
cars.
Vipdata points a finger at
trade guides for contributing to the decline, saying their bullish
tactics when delivering used values sometimes inadvertently showed
artificially high prices.
It says leasing companies, dealer groups and the trade in
general use the guide prices as a benchmark when selling through
various channels and, if the guide prices are too high, the cars
won’t be sold. This increases the number of cars at auction, making
the used car market even worse.
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