Easter UK Used Car Sales Decline Arrives Early

Easter is historically not a prosperous time for UK car sales, especially used car sales. The car finance industry is not pleased during this time of year. It is particularly displeased this year because the expected sales decline made an early arrival.

Fears of inflation and an increase in the interest rate caused this situation to be more troubling.

Aston Barclay, a car auction group, said that this early dip in sales should incent dealers to be more realistic when valuing cars or establishing reserves. During March and early April, UK car sales declined 15 percent compared to the same period a year earlier.

David Scarborough, commercial director with Aston Barclay, said that sales were driven down by the higher value of most cars, economic uncertainty, and bad news regarding government cutbacks.

Mr. Scarborough reported that his company felt obligated to warn auto dealers to be more realistic in their valuations of trade-ins and when calculating reserve prices. Auctioneers attempt to secure the highest auction prices for dealers.

However, if a car features a reserve price that is unrealistically high, the vehicle will likely not sell.

Used car sales in the UK looked promising at the start of 2011. A March report by the British Car Auction (BCA) predicted that prices would begin to drop in late March due to a large number of ex-company vehicles reaching the market.

It said that dealers would at the same time see more vehicles supplied by private customers in part-exchange deals.

Consumer confidence remains low in the auto industry. UK motorists are limiting expenses due to the VAT increase and high fuel prices. BCA stated that vendor strategy is important during the coming weeks. It is expected that the market will stay soft, so vendors must take advantage of peaks when these occur.