EU referendum slows demand for high-value used cars
The upcoming EU referendum is hitting sales of higher value used cars, according to valuations specialist Glass's.
Rupert Pontin, head of valuations for Glass's, said in a blog post on Thursday that potential buyers of £15,000-plus used cars appear to be holding back until the outcome of the referendum is known.
Anecdotal evidence from dealers in recent weeks suggests that oversupply in this sector is being exacerbated by buyers adopting a 'wait and see' attitude to the EU referendum before buying a relatively high-value car, Pontin said.
"Our reading of the situation is that these buyers are more affluent individuals who are concerned about the potential financial uncertainty that could follow a Brexit vote and don't want to commit to higher value purchases until they know whether we leave or stay," he explained.
"Obviously, the effect is not uniform across all dealers and some will still be doing well in this sector but we also know of others who are being affected quite badly."
If voters decide the UK should remain a member of the European Union, the market is likely to recover quite quickly. However, the effect of a Brexit would most likely be widespread uncertainty, Glass's believes.
Looking at the wider used car market, Pontin said that the current 'sweet spot' appears to be well below £15,000, with vehicles priced around £7,000 to £8,000 selling rapidly.
"Cars in this area of the market are flying out of auctions at the moment, especially if they are in a good colour and have a strong specification," he concluded.