Online Used Car Prices On Rise
The average price of a used car rose by 1.7% in the first quarter of 2015 according to Autorola, the UK’s remarketing channel for used cars
This is the equivalent of a £140 increase from £8,484 in the last quarter of 2014 to the current average price of £8,624. This is the highest price on record since 2012, when Autorola began its online price survey. This is mainly due to a variety of factors, firstly the average age of stock has decreased from 34 months to 33, and secondly, the stock sold in Q1 of 2015 have fewer miles on the clock.
Not only are profits increasing in the used car market, but Tesla announced an increase in sales of electric vehicles, with 10,000 being sold in the first quarter, an increase of 55% compared with the same period last year. The Wall Street Journal has provided estimates that Tesla sell a similar number of vehicles globally as General Motors sell in the US in a day.
Even though prices of used cars are rising, this doesn’t necessarily translate to increased profits. A survey found that 41% of dealers reported tighter margins in March compared to February. Reportedly, the main reason for this has been because of an increase in the amount of stock requiring refurbishment before they can be resold. Although there have been a higher number of vehicles in the used market, just 23% of dealers describe the offerings as better than before. Even if the cost of used cars has increased, the amount of money spent getting the vehicles to a sellable condition again negates profits. The used car market is forecast to perform less well than it has in previous years as values for wholesale vehicles are set to struggle.
Tradex is a leading provider of motor trade insurance and have been specialising in it for over 30 years.
Photo by Allen