Figures released in the latest Pulse report from the BCA (British Car Auctions) show that the average cost of a used car fell by 2.5% in October 2010.

Several factors have contributed to the drop in car prices this year. The first cause is seasonal demand, which traditionally drops in the months leading up to Christmas as consumers focus spending on other areas. The current unstable economic situation is also a major factor, which has prompted consumers to be a little more cautious and reluctant to spend money on high cost items such as a used car. Lower used car prices are good news for buyers, particularly those who are feeling the pinch financially.

The findings of the Pulse report are also supported by the Society of Motor Manufacturers and Traders, which also published findings at the beginning of November that show the sales of new cars dropped during October by 22.2% compared with figures for the same time last year. However, the higher sales in the October of 2009 were heavily influenced by the Car Scrappage Scheme, which was launched by the government to boost sales of new cars. The Scrappage Scheme has since ended, and this year’s figures will also be affected by the economic situation and the run-up to Christmas.

The end of the Scrappage Scheme and lower sales figures for new cars could mean that more consumers will be opting for a used car instead.

published: 15/11/2010