Fewer used vehicles were sold, and those that were fetched lower prices in the last quarter of 2010, according to the results of a vehicle pricing index released on Monday.
“Used vehicle prices continued their downward slide in the last quarter of 2010 despite a slight increase in new car prices for the same period,” vehicle risk intelligence company TransUnion Auto Information Solutions said on the release of its vehicle pricing index (VPI).
The quarterly VPI measures the year-on-year price inflation of a market weighted basket of new and used vehicles.
“And while new car sales continued to increase, sales of used vehicles slowed,” TransUnion said.
Mike von Höne, CEO of TransUnion Auto Information Solutions, said the slight increase in new vehicle price inflation in the last quarter of 2010 was partly due to nominal annual vehicle price increases, but the impact of the carbon emission tax introduced in September 2010 had a significant effect.
“While this was the first significant upward shift in new car pricing in the past 18 months, TransUnion Auto does not expect this trend to continue into 2011,” he said.
“The change in new car pricing came on the back of very high new vehicle price adjustments during 2009.
“This provided sufficient cushioning for manufacturers to keep new vehicle price increases to a minimum through 2010 – and there is little to suggest that this will change in the foreseeable future.”
He predicted that used vehicle prices would decline further in 2011 because of the need to keep a price differential between new and used cars, coupled with an increase in used stock levels.
“This, however, is likely to be offset by growing consumer interest in these models, thus providing a competitive environment for used car dealers to trade in.”
TransUnion found there was a smaller increase of 7% in the number of used vehicle financing contracts registered in the fourth quarter, compared to the 23 percent rise in the number of new vehicle financing registrations in the same period.
New vehicles had become more affordable because of various discounts and financial packages, contributing to the slowdown in used vehicle sales.
“As a result, the annual 2010 ratio of 1.79 used vehicles for each new vehicle sold is significantly lower than the 2009 figure of 2.16 used for each new vehicle.” TransUnion said. [Sapa]