January - Retail-ready older car stock remains difficult to come by
Older Cars Market Trends - January 2010
Good, retail-ready older car stock remains difficult to come by, and prices for the very best examples continue to rise. This is especially the case for low mileage examples in good condition, many of which are selling at exceptional prices, both at auction and through the classified ads. Run-of-the-mill examples have enjoyed price stability for some months, with no sign of this changing any time soon.
Though small and medium cars in very good condition always achieve auction prices higher than Guide Disposal, the strongest prices in the run up to Christmas were reserved for the nicest toys: sports and cabriolet models from the prestige manufacturers, and older 4x4s and SUVs, which are still seen by many as a very safe bet for higher prices in 2010.
Despite the presence of some private buyers out to bag bargain low mileage roadsters and cabriolets in the depth of winter, many had not done their homework, as selling prices were expensive relative to private sale prices in some instances.
Prices in excess of seasonal expectations and approaching those of the late summer months were seen on tidy, low mileage BMW Z3s, particularly the smaller-engined variants and, even when in less desirable colour combinations. Performance Audi A4s, in both saloon and Avant guise, also continued to be extremely popular when offered with warranted low mileage.
Hot hatchbacks such as the Golf GTi (and smaller models such as the Peugeot 106 XSi) have recently gone off the boil. Despite low supply, hot hatch buyers remain highly condition conscious, and it has been a while since one of the rarer GTi editions was spotted for sale in top condition. Audi A3 remains the most popular hot hatch, even though it occupies a position in a slightly more exclusive market sector than the average Golf. Ironically for the less sportier versions, auction prices for evergreen Golf hatchbacks in good condition are not always that far behind the highly regarded A3.
Petrol engined 4x4 prices continue to hold their own at auction; a sure sign that the diesel premium is now at the point where it is worth buying a decent petrol model and converting it to LPG. Driven by a mixture of overwhelming interest in the few genuine 4x4s available, terrible weather and 12 months of increasing prices that had only recently begun to plateau, older 4x4 sales were strong well into the last three weeks off 2009. Steady demand is expected to continue over the next few months, especially if winter is prolonged.
Prospects
At current levels of market activity, the likelihood of an increase in the supply of presentable older stock is pretty much non existent, which will continue to apply upward pressure to older car prices, particularly at auction.
With consumers well aware that new cars are getting dearer thanks to list price increases, the VAT rate increase and the impending “showroom tax”, demand for older used cars will continue to grow. Consistent increases in the number of used car buyers, at a time when retail stock is likely to remain short, can only send prices in one direction.
Though used car prices in the UK may seem high when set against previous years, they are still lower than prices for similarly aged vehicles in mainland Europe. This is noticeably true of modern classics, which had quite a good year in 2009. It is very easy to imagine a day when we might look back at current prices for emerging classics such as the Escort RS2000 and Mercedes E320 24v Coupe, and kick ourselves for not taking full advantage of sensible purchase prices when we had the chance. Remember, no matter how dear it looks today, some older car values are never coming down again.
