The Current State Of The Used Car Industry

Look on used car websites and you begin to notice a trend

. There is a shortage in the number of used cars on the market which has led to dramatic prices hikes. In fact, the price of a used car has increased by a colossal 30% over the past year. This change in the market has occurred because of the government-funded Scrappage Scheme.

In an effort to kick-start the failing new car market the government decided to inject some much needed funds into this industry The Scrappage Scheme got underway in May and has been since hailed as a success.

The scheme not only increased new car sales, but also helped to get old, dirty cars off the road. So the scheme has also benefited the environment as old 'gas guzzlers' have been replaced by new fuel-efficient cars.

The Scheme has been so successful that it has even been extended until next year. Ford and Vauxhall have benefited the most during the scheme, in particular they saw great sales figures during the all important 59' plate launch month.

However, although the scheme has helped local car dealers - and the larger manufacturers in particular, it certainly hasn't benefited used car hunters.

The Scrappage Scheme made the prices of brand new cars seem so appealing that people rushed to scrap there old cars in return for a shiny new one. Therefore, those that would have otherwise sold on their older cars to fund the purchase of their one vehicle have decided to have them scrapped - meaning that the used car market has been severely depleted.

Inevitably, because of the lack of supply, the demand has increased and therefore prices have seen a significant rise. In some cases, because of the great deals available on the Scrappage Scheme, some people have been able to buy a brand new car for less money than the same model a year old.

This has meant that people looking for a bargain first car are really struggling to find one. The likes of the used Vauxhall Corsa and the little Ford Ka have been scrapped in their thousands - both of these cars have always been a firm favourite among young first time drivers as they are cheap to insure and run.

As the Scrappage Scheme has been extended the used car market won't really change until next Spring at least. Once all funds have been exhausted then we will be able if the market returns to it usual statebut then perhaps new car sales will fall once again...

by: Lucy Penn

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