HPI’s Tip Of The Week

It’s all in the timing

There are certain times of year when you are more likely to drive yourself a bargain. Plate changes in March and September means new car sales peak in these months, forcing an influx of used cars onto the market. If you can wait until mid to late April or October, you may find prices are substantially lower.

Winter is traditionally a quieter time for used car sales, largely because of the weather and dark evenings. If you are thinking of buying a sports car or a classic car, don’t buy during the spring or summer when everybody has the bug for open-top motoring or classic car cruising. If you want a bargain, buy it in the autumn or winter. The opposite is true of four wheel drive and off-road vehicles. Most people decide they must have one of these when there is two feet of snow on the roads and their car refuses to move. So buy in spring or summer.

Motor Dealer Finance Under Pressure In January

The latest statistics released by the Finance and Leasing Association show the impact of the recession on motor finance providers in the UK:

• Consumers purchased 29% fewer new cars and 13% fewer used cars with dealer finance in January 2009 compared with January 2008.
• Hire Purchase on new and used cars fell 44% and 30% respectively in January compared with January 2008.
However, the number of private new cars bought using dealer finance in the last 12 months remains strong and now accounts for 53.1% of the market or 466,000 cars.

Geraldine Kilkelly, Head of Research and Chief Economist at the FLA, said:

“Good deals are still available in the car dealerships and consumers are looking at different ways to finance cars. Leasing and Personal Contract Purchase have proved more popular over the past year, partly because consumers have less disposable income and are uncertain about what the future holds.

“In order that lenders can continue to offer finance into 2009, we are discussing with the Government how its new asset purchase and guarantee schemes might be used to help the motor finance market.”

Values Rise Again In Used Market

The latest BCA Pulse report for February shows that average used car values have risen for the fourth month running. February 2009 posted a £435 rise against January (up 8.4%), which was itself £300 up on December’s figures.

Performance against CAP continues to improve, increasing by over six points to 103.61% - the highest monthly figure on record for all-sector values since Pulse began reporting. This follows last month’s increase of nearly seven points, which had itself set the highest figure recorded in well over a year. Year-on-year, the CAP performance was over six points ahead of February 2008. This is largely as a result of the market moving faster and more positively than anyone predicted, including the guides.

While average monthly figures remain behind those recorded in 2008, the difference is narrowing – February 09 was just £282 adrift of February 08, while in January the gap was over £650.

Stock from all sources has been even more limited in February than it was in January. The continued high demand from professional sellers combined with the relative dearth of stock has kept sale conversions high - averaging over 90% at BCA in February - and values firm.

BCA Communications Director Tony Gannon commented “There is now little doubt that used values are making a seasonal but possibly significant recovery from the low points of last year. While a seasonal uplift in January and February has been commonplace in recent years, the strength of this has come as something of a surprise in 2009 considering the continuing economic conditions – much as it did in 2008, in fact. Possibly the market is experiencing some deferred demand from last year, as potential buyers held back from any big-ticket purchases as the economic turmoil became apparent.”

With four consecutive months of price rises across the widest basket of cars, the BCA Report suggests a recovery in average used prices has occurred.

But the question remains how sustainable is this recovery? Gannon added “While supplies of vehicles are relatively thin in the wholesale market, it is likely that average prices will be maintained at this higher level. With no indications that volumes are going to ramp up hugely over the next few weeks, BCA expects March to remain fairly strong and with a late Easter, April may also be relatively buoyant. The post-Easter period and the run-in to the summer months may prove more problematical for vendors, however, particularly if volumes increase notably.

February overview by sector

Overall average monthly used car values rose in February, with every individual sector enjoying an increase in values.
According to BCA’s figures, average values for Fleet & Lease cars rose by £567 while average Part-Exchange values climbed by £128 – both notable improvements on the gains made in January. Nearly-New values improved by nearly £2,000 in February having fallen back last month.

Fleet & Lease Sector

Average monthly Fleet & Lease values rose to £6,286 in February from £5,719 in January and £5,471 in December. Values are at the highest point since May last year. Year-on-year, average fleet and lease values in February are down by £426, having been almost exactly £1,000 behind last month. The relative improvement can be more clearly seen in the CAP Clean performance that rose by a substantial 7+ points.

Other parameters remain largely static – there are no signs as yet of an increase in average age and mileage that would reflect any contract extensions in the leasing sector. In fact, year-on-year numbers are slightly down for age and mileage.

Part-Exchange Sector

Values increased in the part-exchange sector for the third month running, with the average price improving by £128 over January’s figures. There was another big improvement in CAP performance, which cleared 100% for the first time in over a year. Considering that these cars average around 74,000 miles and over seven years in age (and are likely to have had a number of owners from new), to achieve over CAP Clean is significant in itself and a real indication of the current demand in the marketplace.

There has been a relative shortage of part-exchange stock as retail new volumes remain slow and this has helped to keep prices on a reasonably even keel.

Nearly-New Sector
Perhaps surprisingly given the difficulties of the new car market, the nearly-new sector staged a strong comeback in February, having been the only sector to average a decrease last month.

February saw values rise by £1,925 to £15,129 with CAP performance improving again by nearly four and a half points to 105.14%. Year-on-year values remain behind by around £1,000, although CAP performance is ahead by nearly four points.

Specialist Car Sector Reports
Large 4x4

Values for larger 4x4 vehicles continue to enjoy a recovery after falling sharply last year. Average 4x4 values have risen steadily since July of last year and are now ahead of where they were in February last year, having reached £8,743 in February 2009 for a four year old vehicle at 50,000 miles.

Prices are now on a par with those recorded before the credit crunch began to bite in January 2008, when values were at £8,813. Values reached a low point last July when several months of high fuel costs, combined with the stuttering economy and uncertainty over proposed Vehicle Excise Duty and the so-called Showroom Tax saw values fall by over £2,000 to £6,723.

In similar fashion, performance against CAP Clean has risen from a summer lowpoint of 86.92% in August, to a February highpoint of 105.22%

MPV’s

MPV values fell consistently through 2008, from a peak of £4,804 in January to reach a low point of £3,637 in November. Values have recovered steadily to reach £4,179 by February 2009, but remain some £500 behind, year-on-year. Performance versus CAP followed a similar pattern in 2008 with a peak (92.34%) in January and the low point in November of just 85.56%. Values have recovered quickly and have moved over 15 points by February, 2009.

Astle BMW First To Offer 0% Finance

Astle BMW in Grimsby and Astle BMW in Scunthorpe is the first BMW dealership in the UK to offer 0% finance, showing there really has never been a better time to buy a BMW.

The exclusive offer is available on all new 2008-built stock bought over a three-year period at the two showrooms when a 20% deposit is given.

The agreement between the dealer and BMW comes at a time when industry experts are saying that now is the best time for buyers to clinch exceptional deals on new vehicles.

Which? Car is the latest industry body to make this claim following figures released from the Society of Motor Manufacturers and Traders last week (6th March).

They revealed sales of new cars were down 21.9% in February year on year, leading to dealers dropping prices and creating tempting deals for potential buyers.

Instead of hanging onto older petrol-guzzling vehicles that need regular maintenance, Astle BMW is also alerting people to the fact that their money could go further in the long term if they purchase a new BMW in today’s marketplace.

The current BMW range has EfficientDynamics technologies which reduce fuel consumption substantially and lower carbon emissions, helping drivers reduce their overall running costs.

Each vehicle also comes with a manufacturer’s warranty, and with the added benefit of 0% finance BMWs are now available to those who may have considered the brand beyond their means.

Mike Baldry, Managing Director of Astle BMW, said: “It really is a buyers’ market and deals are to be had by those clever motorists who see the opportunity to make the most of a deflated economy.

“People who want to buy a new or nearly new BMW but couldn’t previously afford it will benefit from the current deals and prices on available at Astle BMW in Grimsby and Scunthorpe.

“We are the first dealer to be offering 0% in the UK on BMW new car stock and our prices reflect the current market, making this the best time to buy a new or nearly new BMW.

“It will pay motorists in the long run to buy now and save money before prices start to rise again.”

Mike added that Astle BMW began to see people returning to the forecourt to spend their money in January, a trend which continued into February.

This is good news for the two dealerships, especially the Scunthorpe site which has just undergone a £500,000 revamp to improve the showroom, double the pitch size and provide more customer parking.

For more information about Astle BMW visit the website at www.astle-group.co.uk.

Justgoodcars.Com Records Audience Growth For The 6th Successive Month!

JustGoodCars.com records audience growth for the 6th successive month!

A total of 311,670 unique users searched for used cars on the JustGoodCars.com network of 1105 make and model specific websites during January 2009 - an increase of 25.9% against Decembers numbers.

Total users for the month were 408,985 - again a significant increase on the whole of Q4 2008 proving that JustGoodCars.com is rapidly establishing itself as an extremely valuable addition to any dealers online advertising portfolio.

Whether you already advertise on our network, in either our free of charge standard package or our increasingly popular enhanced package, or you might be looking to expand your advertising options in the future, this audience growth in these very hard times can only be good news.

An early look at February figures show we are already beating our January numbers - so fingers crossed for 7 months of continued growth!

If you would like to know anything further about JustGoodCars.com, or if I can help in anyway, please do not hesitate to let me know.

Social Networking

Web 2.0 is more important than ever these days and Justgoodcars.com is now on Twitter. After spending time at NADA in New Orleans it became clear that the US Car market are really ahead of the game in Social networking scene. Social Bookmarking has also become a way of life for many car related businesses to keep track of the ever growing online car industry.

Spotback.com, a1-webmarks, Oyax

JustGoodCars.com Dealer Directory

The start of 2009 has been a very positive one for Justgoodcars.com and with traffic reaching new heights month on month especially in Oct-Dec there has also been a large increase in directory lisitngs for car dealers around the world, with such Car Dealers as Denver Motors. Increased direct traffic to dealer sites has been a major goal for many dealerships as this cuts the cost of paying for leads.

Justgoodcars.com does not charge for leads and listings are free of charge anywhere in the world.

Contact us if you wish to send us a feed in XML or CSV formats and we will have you selling more new and used cars in no time!