Used Car Values Falling – How You Can Get a Great Deal on the Used Car Market

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The Personal Contract Purchase (PCP) method of buying a car involves a buyer paying a fixed amount on the car per month for the entirety of the contract. The reason why they have become so popular is they allow you to have less money upfront. You are essentially taking out a mortgage on your new car.

Why PCP Has Hurt Resale Values?

In short, PCP has become a victim of its own popularity. The used car market has become completely saturated. Prices for the most popular second-hand cars have fallen. And that means good news for used car buyers. They can pay less, even if they decide to pay for the car outright.
This alone is a reason to buy. One of the tricks to getting a great deal on used cars is to buy at the right time. Now is the right time, and you can potentially save hundreds of pounds by buying now, as opposed to if you had purchased a couple of years ago.

Popular Cars Only

Understand that this trend only applies to the most popular cars, such as those from Ford and Vauxhall. Less valuable cars have not seen the same market saturation because people are less likely to take out a PCP contract on them. This applies even without the presence of PCP, though.
If you want to get the best deal on cars, you need to opt for the ones that are the most popular. Natural market demand will drive down the price, and so if you purchase these cars, you are going to get a better deal.

Buying Privately vs. Buying from a Dealer

The rise of PCP has meant buying from a dealer is often cheaper than buying privately. It used to be the exact opposite because private sellers simply wanted to shift their cars quickly. The reduction in price caused by PCP has equalised these prices somewhat.

Private sellers are only willing to drop their prices so far. And so they are now on an equal footing with dealers.

Shopping Around Remains King

The used car market has never been standardised, and it never will be. You will always see radically different prices based on the dealership you go to and the part of the UK you decide to shop around in. You should always shop around to get the best deal on used cars

There are multiple ways in which you can do this.

Move Around – Geographically, there’s a difference in used car prices based on the area of the UK you happen to be in. Poorer areas will always have lower prices because these dealerships are targeting the town or city they are in. Travelling from afar can make it easier to get a better deal.

Sponsored Dealerships vs. Private Dealerships – Used car sellers associated with specific car brands will always be more expensive because these operators have less flexibility when it comes to sourcing and pricing. Private dealerships that sell everything may be less reliable, but find the right one and you can get a better deal.

The Person – Sometimes you will get a better deal just because you’re dealing with the right person. You can have two similar dealerships with radically different offers on the table. This alone is a reason to shop around.

Try to Pay Cash

Used car dealers want their money as soon as possible. They work on the same principle as sellers of property. If you can pay in cash, this allows them to get the money fast, and they do not have to worry about a potential default later. The money is already in their pocket.

If you have the means to do so, offer to pay cash. This will often save hundreds of pounds, in terms of both the price on the table and interest payments going forward.

Conclusion

The PCP market has changed the used car market for the benefit of buyers looking to get a great deal. Shopping around is still the best option to get a used car at the best price, though.

What are your experiences with the used car market?

4 thoughts on “Used Car Values Falling – How You Can Get a Great Deal on the Used Car Market

  • 08/03/2016 at 3:55 pm
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    Not sure I agree on paying cash to get a better price Kyle. The fact is garages would rather you bought on finance as they get a cut and therefore you are more likely to get a better deal on the car price as they have more margin to work with. However, because you are paying interest on the finance package obviously you need to look at the numbers to work out the best deal.

  • 11/03/2016 at 7:04 pm
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    A good point about buying outside of your local area to find better prices. When I bought my VW I searched across the UK and eventualy bought it from Telford saving over £600 on the prices I could get locally. Yes I had the cost of getting the car home but still a big saving.

  • 16/03/2016 at 5:45 pm
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    I hate buying a new car. If you part exchange your old car you get robbed, if you try and sell privately its a pain. I have waste so much time when I am due a car change its unreal, by the end of it I am usually so frustrated with the process I end up paying more than I should and getting less than I should for my part ex just to get it sorted.

    Ed

  • 17/06/2016 at 9:17 am
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    Hi Edward, thats exactly what the car sellers want you to do. Dont give up and you will get a better deal.

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