Used car dealers will have another tough
year due to supply shortages, tighter trading margins and limited
retail demand, data company EurotaxGlass’s has predicted.

The company’s latest Glass’s Guide report said
used-car dealers should focus on the procurement of trade cars and
tight controls of ageing stock levels if they are to succeed in the
current market.

Last year saw a reduced supply of used cars,
forcing up prices despite a 7 percent drop in retail sales. The 12
months ahead are expected to see a return to seasonal variations in
used-car prices. This will come alongside a shortage in
one-year-old vehicles due to a fall in new car sales in the final
quarter of 2008.

Low levels of consumer demand, due to higher
unemployment, higher taxation, the forthcoming general election and
ongoing restrictions on consumer credit, will also contribute to
difficult trading conditions for dealers.

Used car prices are around 25 percent higher than
this time last year, Glass’s said, which will also affect

“Many customers will simply enter the market at a
lower price point, perhaps looking for a vehicle outside the
typical age profile of franchised dealer stock,” said Glass’s Guide
managing editor Adrian Rushmore.

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But used car dealers may experience a sales boost
as customers who have deferred buying a car come forward. An
increase in new car prices, due to weak sterling, will also bring
buyers to the second-hand market.

Sophie Helyer