IMDA chairman Umesh Samani has slammed ‘scaremongering’ over used car prices and says the market will take ‘years’ to level out again after an unprecedented spell.
Samani, boss of the Independent Motor Dealers Association, says that despite a small decrease in recent times, he does not expect to see prices ‘fall off a cliff’.
Instead, he told Car Dealer that he believes prices will remain at roughly the same level for some time as demand is still outweighing supply.
The Stoke-on-Trent-based dealership boss told independent dealers to ‘carry on doing what you’re doing’ but did urge slight caution.
He said that values could still continue to go down slightly but did not expect any major fall, with ‘huge chunks’ coming off value.
Speaking exclusively to Car Dealer, Samani said: ‘Prices might come down slightly but they’re certainly not going to come down in big chunks. Far far from it in fact.
‘The cars still aren’t out there. Whereas before a customer would ask you for something and you could offer them a choice of four or five, now there is probably only two or three.
‘In general everything is still doing pretty well. Decent, good spec cars are still selling quick and still returning good margins.
‘The reality is that two years ago there were hardly any new cars being sold so we’re not going to have lots of two to two-and-a-half year-old cars for sale all of a sudden because there are none registered.
‘The facts of it are that there aren’t many about so if they do come up they are going to fetch good money.
‘I genuinely believe that will have an effect on the value of three and three-and-a-half-year old cars and I think going forward it is going to take a lot of years for it to try to level out again.
‘There’s nothing for two-and-a-half year-old cars now and next year it’ll be three-and-a-half-year-old cars so it will take a long time for cars of that age to start coming back onto the market.
‘Even if you look at now, new car registrations are still down because there just isn’t any supply so next year there won’t be any 12-month-old cars either.’
‘Some are trying to create the market themselves’
Samani added: ‘ I don’t believe there is going to be a crash and I think sometimes you get people, whoever they may be, trying to predict a crash with a bit of scaremongery.
‘I just hope that people aren’t listening to those that are predicting a crash and then act accordingly to make a crash happen.
‘Rather than report what is actually happening, there are some that are trying to create the market themselves in my opinion.’
Yesterday (April 26), Car Dealer reported that used car prices have fallen in April, but not as badly as experts had expected.
Analysts at valuation experts Cap HPI reported a 2.1 per cent drop off in the last month.
The data echoes what Samani has said about a crash not being forthcoming.
He told Car Dealer: ‘In reality, used car prices have slowed down a little bit but it hasn’t dropped off the cliff and I don’t think it ever will.
‘The market has probably been rising too much for too long and there was no way they could have carried on as it just didn’t make sense.
‘It has steadied off but then it is holiday season which has an impact. Good cars are still making good money and I would say that prices have eased rather than dropped significantly.
‘My advice to independent dealers is to just keep doing what we’re doing now. Be slightly cautious but don’t panic because there’s not going to be a crash because the cars just aren’t out there in big bundles.’