UK reports 'unprecedented' used car auction activity

With used car demand up around 20 per cent in January alone, UK car dealers are reportedly searching for new stock.

The Society of Motor Auctions' membership has reported that all auctions were breaking sales records and had continued to do so until volumes dwindled leading up to March registration change. The change was dramatic, as at the end of 2008 values were low, and auctions were quiet.

"Auction used car prices have been significantly higher in the early months of 2009 compared to the end of 2008 and motor auctions have been breaking sales records," SMA chairman David Scarborough said. "However without an upswing in new car sales this boom will come to an end," he warned.

The SMA represents the UK's motor auctions businesses.

Mr Scarborough said the auctions sector late in 2008 reflected the overall gloomy trend in the retail car sector with price reductions, little activity, and very few deals being struck. The beginning of 2009 looked healthier as most auctions had large volumes of cars already carried over from December.

"But we were about to experience a serious and exceptional demand that would outstrip supply immediately," he pointed out. "Anyone visiting a motor auction in 2009 would be surprised that we are in any economic slowdown: 100 per cent conversions and much higher percentages of book value have been achieved for all major vendors during this period and for the first time for over a year everyone seems happy."

Mr Scarborough said with new car sales likely to continue at a much slower pace than previous years, the used car at auction will continue to be in big demand.