Used-car market may remain flat

The used-car market is not likely to witness a significant boost in 2011, as the Government's austerity measures affect public spending.

According to RAC Warranty, a flat used-car market may however lead to an increase in demand for safety net products like extended warranties.

Ian Simpson, sales and marketing director, said: "The measures that the coalition Government has undertaken to reduce public spending will really start to bite and that will have a definite impact on general confidence. Even if buyers are not affected directly themselves, they are likely to know family or friends who are being made redundant or seeing a downturn in business.

"As a result, we believe that business will remain fairly static during the year for the vast majority of used-car dealers with no major changes in sales levels or residual values while good quality stock will remain in short supply. Things may be a little worse or a little better but there is unlikely to be any significant shift."

The condition is likely to force dealers to make sure they get the maximum value from each car they sell, Mr Simpson added.

He said: "The dealers that have enjoyed the best 2010 are those that concentrated on getting the basics right - they sourced the best stock they could find, presented it in the strongest way possible, marketed it in a proactive way, took the customer in a professional style through a full programme of additional items such as extended warranties and service plans, and did everything possible to attract their future aftersales business.

"Doing well in 2011 will be about the same kind of approach. There are no magic pills for thriving in current conditions but those dealers that are adopting a thorough and professional approach are the ones that we believe will make the best of what will remain a fairly tough used car market."

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