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The Used Car Market - The Good And The Bad

by Tony Hill

At this current moment in time the automotive market is in a bit of a strange place. The Scrappage Scheme seems to have turned things on their head as it is now possible to get a brand new car for a lower price than a used car.

The price of a used car has actually risen by 30% since last year as the Scrappage Scheme seems to have severely limited the amount of used cars on the market...meaning that demand has really outstripped supply.

With used cars at their highest price and in high demand you need to ensure that you research hard to find the best deals around.

The best prices can be found on the most popular models as manufacturers fiercely compete against each other to make a sale. For example a recent survey found that a used Volkswagen Golf was up for sale for 16,200 pounds whilst you could buy a brand new one for 12,430 pounds - thanks to the savings available under the Scrappage Scheme. These savings are incredible so it is imperative that you carefully research your options so you don't miss out on the dramatic savings yourself.

The only used cars that seem to have remained strong during this turbulent time are BMWs and Mercedes - although sales of used BMWs fell during quarter 2 of this year compared to the same time last year.

This current trend in car sales and prices is likely to hit young drivers the hardest as the cheap little run-arounds they will be after will have been scrapped in their thousands as people upgrade their motor for a brand new one.

So, whilst on many levels the Scrappage Scheme has helped to kick-start the motor industry once again and has helped out car manufacturers, it has had a negative impact in other areas. First-time drivers will have to look hard to find themselves a cheap little first-motor as so many used Vauxhall Corsas will have been scrapped or their price so severely increased that they will be very hard to come by.

The Scrappage Scheme has now been extended as the government have ploughed a further 100 million into the scheme - the scheme will come to an end either by February 2010 or as soon as the money has run out (whichever is sooner). So, once the scheme has run its course it will be very interesting to see how the automotive industry levels itself out - chances are used car prices will see a sudden drop with used car sales decreasing once again...

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