September 30, 2008

With the financial turmoil of the credit crunch reaching new lows every day the new and used car markets are very much in buyers territory.  Credit is drying up on a global scale and as a result there are lots of bargains to be had for those with cash, or the confidence to enter into a finance agreement.

Despite the downturn the Finance and Leasing Association (FLA) – which represents car finance providers – is reporting a steady increase in finance taken out in showrooms since the start of the year. FLA new car finance penetration stood at 50.7 per cent in July 2008, up from 47.2 per cent in January. The value and volume of used car finance agreements was up 2 per cent for the year to July 2008.

Paul Harrison, Head of Motor Finance at the FLA, said: ‘Despite tight trading conditions, our statistics show that new and used motor finance has bucked the trend so far in 2008. Consumers are turning to dealer finance as other sources of finance have become more difficult to access. There is a huge opportunity for dealers in promoting the benefits of secured finance to consumers. Dealers should be talking finance with all visitors to their showrooms’.

Robinson continues: ‘Following the September plate change, dealers are keen to make sure that consumers get a good deal on a new car. There are a range of discounts available, as well as a wide variety of bespoke finance products to suit most people’s circumstances.’

Private sellers are finding buyers to be more discerning than in the past.  Anyone looking for a used car will find eBay an interesting place to conduct their own market research.  Of eight cars that I’ve been watching in the past month five have failed to make their reserve prices.  Of the three that did make the required amount of money two didn’t have a reserve price.  So out of eight cars only one actually made it past the reserve price, quite a poor return if you’re selling a car.

The reserve is obviously not published on the site so users don’t know how far from the sellers expectations they’ve fallen.  However two of the cars had a ‘buy it now’ price and this made interesting reading.  The 2001 Seat Leon Cupra had a buy it now price of £3,500, it made £1020.  The 2005 Mondeo Titanium TDCI had a ‘buy it now’ price of £7650, it fared slightly better with £3,500 but again didn’t even make half way to the sellers ideal price.  These two cars must have been advertised with a reserve price, but I’m sure the sellers couldn’t have expected their cars to get such low bids.

Obviously eBay buyers have to sort out their own finance before buying a new car on eBay, something that gives garages an advantage for keeping their figures up, as they can arrange finance for those buying on impulse.  Garages are an expensive way to buy a used car, but with that cost comes the reassurance of guarantees and back up if anything goes wrong. 

But with so many cars on eBay not making their reserve price it’s well worth sticking a few that you’d like to look at into the watched list to see how they get on.  You’ll be amazed how low some of their bids are.  If you can get your hands on some cash you could make it go quite a long way between now and Christmas.

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