According to industry insiders, used car prices are set to rise yet again this year. The market which is still recovering from the economic recession reported a gain of about six percent last year. By comparison, the new car market was up more than double that. But those numbers were distorted by the government scrappage scheme. Under the scheme, shoppers received a discount of up to two thousand pounds on any new car when they turned in an old clunker. Not surprisingly, new car sales soared. But the program came to an end in March and most new car dealers are nervous. Why are used car dealers less nervous? One reason is that sales are on the rise, even without the aid of a government scheme. Not to mention the fact that they already raised prices on used cars and sales were unaffected. But for new car dealerships, there are two unknown variables. One is that they have no idea how well their market will perform without the aid of the scrappage scheme. And the other is that the decline in the pound will make it necessary for them to raise prices just like the used car dealerships. As debts and unemployment rates continue to rise, most insiders believe that new car sales will suffer mightily as consumers opt for less expensive used vehicles. Perhaps that is why most used car dealerships are optimistic about their prospects in the second half of 2010.
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