Second Hand Cars Worth More Due to Shortage
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A growing shortage of used cars has resulted in an increase in their value this year. 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 this year there has been a complete reversal with used car prices actually increasing month on month by about 3.5%. This is resulting in the values of used cars going up.
This is good news for those wishing to sell their cars but not so good for people looking for a bargain. The price increases for used cars during 2009 have never been seen before. There has been as much as a 25 to 30% increase in the prices for some used cars.
Some have suggested that effects of the car scrappage scheme on used car prices will not last. When funds for the car scrappage scheme come to an end in October it is expected that this trend in used car prices will be reversed.
The car scrappage scheme was introduced to incentivise 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 this year it was reported that new car prices were actually lower than used car prices in the UK. The primary causes are thought to be a decrease in the number of used cars coming onto the market along with less demand for new cars.
There has also been a shift in the way that UK drivers are financing their transport needs with many opting for cheap lease car deals or attractive van contract hire deals rather than outright purchase.
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