UK used car sales set to suffer in election year
As the emergence from recession continues to make itself felt across Europe, there is some less good news in the used car domain, from valuation specialists Glass’s. It predicts that 2015 is set to be the most significant year in the used car market in the UK since the recession.
After a reasonably strong start, a variety of factors both within and outside the industry are likely to have definite effect on both supply and pricing in the second half of the year.
Rupert Pontin, Head of Valuations, explained: “The key moment is likely to be the General Election. Like any major national event, this will have dampening effect on used car sales, especially as the result looks uncertain at this distance.
Immediately afterwards, whichever stripe of major party gains power, there is likely to be a new round of austerity measures and also tax increases, damaging both spending power and consumer confidence. Shortly afterwards, by the end of summer, most economists feel that we will see an interest rate rise. Even if this is just 0.25%, it will again inevitably hit consumer plans for replacing their car”.
Rupert Pontin went on to say that 2015 would be significant because it would mark a definite shift from the used car market patterns that had been seen since the recession ended. “For a long time, we have been in a low-supply situation against a gradually improving macroeconomic backdrop but that cycle has started to come to an end in recent months and that change will characterise 2015. Our longer term forecast is that all of these factors will continue to take even greater effect in 2016, with even more pressure on prices through reduced demand and increased supply”.