Auto dealers reach for their calculators as UK car prices rise

Maltese auto dealers have mixed feelings about a whopping increase in the price of British second-hand cars.

It is good news for those whose business is selling used cars from Japan but those getting the vehicles from the British market are not so happy.

George Debattista, from Smart Motors, said that in July and August, when the craze of buying cars from the UK reached its peak, the company sold almost 30 cars a month. But the number has now dwindled to two, he said.

He believes, however, it is just a case of the market settling down rather than due to the spiralling prices. "The market is flooded with used cars. Whoever had to buy a car has already done so," he said.

Clinton Grima, from Ventur Motors, said the prices of vehicles from the UK had gone up by about 15 per cent in the past year, a conservative figure compared to what was quoted by the British media, which put the figure at 30 per cent.

Mr Grima believes the increase in prices was a result of the recession, which pushed people away from buying new cars and towards second-hand vehicles. This, he said, increased demand for used cars and, in turn, pushed up prices.

The past months have seen a craze for second-hand cars imported from the UK, which were selling for thousands of euros below the price of their local equivalents. Figures quoted by the Malta Transport Authority had showed that monthly registrations of used cars coming from the European Union, mostly from the UK, almost quadrupled between January and April after a new registration tax regime came into force.

But now, the British media is reporting massive increases in the prices of second-hand cars. According to Tim Naylor, from British Car Auctions, such prices rose by up to 30 per cent over the past year.

While second-hand cars usually depreciate by 15 per cent every year, the trend was reversed in the past year, according to CAP Motor Research Ltd, which provides valuation data to the car industry.

Mike Hind, from CAP, told the BBC that the value of used cars had been increasing by some 3.5 per cent every month, translating in big hikes in the prices of second-hand cars.

"The high values are good news if you want to sell your car but not so great for second-hand dealers or anyone to pick up a bargain," he said.

Mr Naylor described the price increases as "completely unprecedented".

CAP said the price of an average family car rose by £600 (about €685) this year.

Reuben Calleja, from Highway Auto Dealers, said prices of small cars went up drastically between January and March because of an increased demand. For him, this was good news because his stock is imported from Japan. "It is better for me because my prices will be more competitive," he said.

Similarly, Oliver Brownrigg, president of the Used Vehicles Importers Association, said its members, who imported cars from Japan, were positively affected by the increase in prices as it would give them a better competitive edge.

Ninu Baldacchino, from ABS Auto Dealer, had mixed feelings about the news. He says he has lost money dabbling with second-hand cars from the UK. Recently, he sold a Land Rover Freelander for some €1,600 less than he had bought it and lost more than €3,000 on a Mercedes.

"Sometimes buying from the UK ends up being more expensive than buying from Malta," he said.