The surge in the number of new car registrations in the UK has been welcomed by most in the car industry, but some industry consultants are warning that this surge could spell trouble for those who sell used vehicles.
Attleborough, Norfolk -- (SBWIRE) -- 05/04/2015 -- David Bailey, who is a Professor of Industrial Strategy at the Aston Business School, highlighted this issue. Earlier this year, he pointed out that a flood of new cars could lead to too many vehicles flooding into the used car market, which could depress values.The only way this fall in prices, and therefore fall in profits for used car dealers, would be avoided was is if demand for used cars stayed high.
Fortunately, at the moment that is exactly what is happening. The number of used cars sold does is keeping pace with the number of trade in vehicles that are becoming available. There is strong demand for used cars in Norfolk and many of the UK's counties.
However, the danger has not passed. Demand only has to drop slightly for the number of trade in vehicles available to overwhelm the market and push the price of used vehicles down. So far, there are no signs of that happening, but UK economists point out that zero inflation is leading to UK consumers putting off big purchases because they believe that if they wait the price will fall. This mindset could start to slow the sale of used cars.
The other issue is that the cost of petrol and diesel is starting to rise. When that happens buyers start to think twice about traveling by car, and begin to wonder if they really need, or can afford, a new vehicle. This means that the number of cars sold falls slightly when fuel prices rise.
Lastly, the fact that there is an election due affects how willing people are to spend large sums of money. People are unsure of what a new government will do, so have a tendency to be less prepared to buy big items like cars just before and just after an election.
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First Name: Alan
Last Name: Ford
Business Name: Abbeygate Cars Attleborough
Address: Exchange Street
Postcode: NR17 2AB
Country: United Kingdom
Phone No.: 01953 455585