Shortage of Supply Leads to Increased Value for Second Hand Cars
Fewer used cars has led to an increase in their value during 2009. 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.
Normally there is a steady depreciation in the prices for used cars. But 2009 has seen used car prices actually increasing month to month by about 3.5%. This is resulting in significant increases in used car valuations.
This is good news for those wishing to sell their cars but not so good for people looking for a bargain. The price rises for used cars in 2009 have been completely unprecedented. Some used car prices have increased by as much as 25 to 30%.
Some are saying that the effects of the car scrappage scheme will be short-lived. When funding for the car scrappage scheme ends in October it is likely 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.
Earlier in 2009 it was reported that some new cars were actually cheaper than second hand ones in the UK. This was caused by a falling demand for new cars due to the recession and fewer used cars coming onto the market.
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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