Used car sales 'face tougher year'

02 March 2010

This year's used car market is predicted to be significantly hit by the long downturn in new-car sales in the last few years, with a major drop in the supply of one and two-year-old used cars.

The warning came from Glass's Guide which revealed that the fall in one-and-two-year-old cars compared with 2009 was due to a marked fall in registrations last year and in 2008. On the positive side, the supply of three- to five-year-old cars will be fairly constant after new sales of 2.4m in 2007, 2.3m in 2006, and 2.4m in 2005, said Adrian Rushmore, Managing Editor of the Guide.

Used cars up to five years old are the lifeblood of the dealer trade. Dealers currently account for around 87% of sales of up-to-two-year-old cars, and 77% of three- to five-year-old cars.

Rushmore believes the current scrappage scheme could compound the stock shortage problem still further.

"Around 300,000 new car sales in 2009 came through Scrappage, but we anticipate that many of those that have traded in a 10-year-old car are not likely to follow the typical three to four-year replacement cycle," he said.

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