Economic Forces
White Paper | September 2015 | by Karl White
There has not been a better time to buy nearly new cars for many years.
Cars are getting better all the time, but the cost of putting a nearly new car on
your driveway is actually becoming less.
A lot less in some cases.
For example a typical nearly new Ford
Focus is over 10% cheaper today than it
was just 2-3 years ago.
The same goes for a Vauxhall Astra you’ll pay almost 10% less than you
would have done for the same spec car
2-3 years ago.
If you’re thinking about buying your
next car in the next couple of months, the economic forces have created a
perfect storm for an incredible bargain for you.
So why is this happening?
Car manufacturers build cars for the whole of Europe. Whether we like it or not
their primary interest is to build as many as they can.
Europe is recovering from recession, but the economic recovery is generally
slower than the UK which means they our manufactures are exporting fewer
cars.
They still want to build as many cars as the market can take, so have
concentrated on the UK where the economic recovery seems to be happening
faster.
Since our economy is more buoyant, it’s easier for the manufacturers to get us
to buy cars. The general economic mood is quite positive, and so more people
are inclined to make major purchases like buying a brand new car. Economic
Forces in action
Record year
2014 was a record year for new car sales in terms of pounds spent, and just
under 2.5 million new cars were licensed last year. The last time we saw those
kind of numbers was in 2004 before the Credit Crunch imploded the economy.
Throughout the years of recession the price of new cars has remained high as
manufacturers have been able to achieve consistently good prices.
Demand has been good, and generally new cars are at the highest price they've
ever been (in lots of cases the cost has gone up).
Good news for the consumer
So, why is this so good for you if you're thinking of changing?
Because right now, the nearly new market is quietly offering exceptional value.
As you can imagine, lots of brand new cars means lots of nearly new cars.
People sell their existing cars to buy their new ones and so the market is flooded
with lots of quality stock.
When we buy cars for our forecourt, there are simply more to choose from.
More to go around means the price that WE pay is forced down.
Economic Forces in action.
The Gap Grows
An increased national stock of nearly new cars mean the gap between the cost
new and 1 to 3 year old gets wider.
At Thame Service Station we’ve watched this happen consistently for the last
20 years.
Example 1 - Ford Focus 1.0 L Ecoboost Zetec 125
2012
New price: £17,890
Nearly new price: £12,155
Saving: £5,735
2015
New price: £18,740
Nearly new price: £10,890
Saving: £7,850
Example 2- Vauxhall Astra 1.4 L Turbo SRi
2012
New price: £19,920
Nearly new price: £11,199
Saving: £8,721
2015
New price: £20,020
Nearly new price: £9,999
Saving: £10,021
The savings will vary depending on the make, model and spec of the car that
you want to buy, but in many cases buying nearly new is a far better option
today than it was 2, 3 and 4 or ago.
Savings passed on to you
Unlike the frustrating situation where you hear oil prices are plummeting yet
there’s no difference at the pumps, at Thame Service Station we pass on these
savings to our customers.
We sell more cars, our customers get a blinding deal, everybody’s happy.
Except perhaps the manufacturers who would of course prefer you to buy a
brand new car for several thousand pounds extra.
Economic Forces in action.
How long can this continue?
It’s likely that this situation is going to continue for a few months at least. As
Europe climbs out of the economic doldrums and the market becomes more
buoyant across the Channel, imports from the UK are likely to increase.
Fewer new cars in the UK means fewer nearly new cars and so the pool we get
to choose from at auction shrinks.
More people after the same number of cars drives the price back up again.
Economic Forces in action.
Recommendations
If you’re considering buying your next car at some point in the next 3 months
than you’re going to make a huge saving.
The case for buying nearly new instead of brand new is quite compelling, when
you consider what you could do with an extra few thousand pounds in your
pocket and an almost identical car on your driveway.
We’ve got a handy tool on the Thame Service Station website where you can
get a pretty good idea of what you’re likely to get for your current car when you
trade it in.
Head over to www.valuemyvehicle.info and enter your car registration to put
yourself in the driving seat.
www.valuemyvehicle.info