June's used car market

June's used car market - no sign of improvement over the quiet summer months

Values of used cars slip by up to 4%, echoing those observed in May

Difficult market conditions will cause a firm downward movement in used car values with figures down during June by between three and a half and four per cent - a similar story to last month.

The types of cars currently being purchased by consumers are typically lower-medium cars that retail under £6,000. Dealers are responding to this demand by acquiring the best condition examples of these types of models to avoid incurring the time, cost and aggravation of getting sub-standard cars prepared.

Furthermore, the abundance of premium-brand used cars three years old and beyond, is providing more choice, with the result that attention is being diverted away from the run-of-the-mill examples.

Even though difficult trading conditions have been evident throughout the first quarter, we believe that recently they have reached new heights of importance. The values of high emitting and fuel inefficient cars are also looking more vulnerable, not just because retail demand for them has suddenly declined, but because the trade is anticipating a greater adverse reaction from customers any time soon.

It is very difficult for dealers to see where any improvement in retail demand is likely to come from, especially as we approach the traditionally quieter summer months. Accepting that the continuation of difficult trading conditions is the most likely scenario, dealers will be resigned to doing the important jobs better, such as focusing on competitive pricing and strict stock management.