Used car market tipped for downturn by VRA
The used car market could experience a sharp deterioration in the final three months of the year, according to the Vehicle Remarketing Association (VRA).
It believes a downbeat Budget, falling consumer confidence and larger defleet volumes could all negatively impact the sector.
Marcus Blakemore, chair of the trade body’s Industry Trends Sub Committee, said: “What we’re seeing at the moment is quite a healthy used car market. At the wholesale level, demand and supply seem to be evenly matched, prices are strong and all of the key indicators are largely positive.
“This is not to say there aren’t problems including, at a retail level, where there are some concerns among dealers about unit profitability due to an unwillingness to increase prices but generally, the mood is positive.”
However, he fears a downturn could be just weeks away.
Used car market
He continued: “At the most recent meeting of our committee, there were widespread worries around consumer confidence. The government has spent a lot of time warning that there are hard times ahead and tax rises are widely expected in the Budget. This could dramatically reduce the propensity for people to make major purchases such as cars.
“At the same time, there are larger defleet volumes quickly coming down the line meaning that the market could tip into oversupply, putting pressure on values and prices. It’s not quite a perfect storm but there is potential for the current, relatively upbeat situation to change before the end of the year.”
