Appreciate Depreciation in Used Cars
Depreciation is the natural drop in cost cars experience from the moment they are registered. While these fluctuations cause headaches for dealers who need to profit from the purchase of a car, this can actually be good automotive news for private buyers that are more concerned with the reliability of a vehicle than its residual value.
Another situation where this can happen is during pre-registration. These cars are technically brand new but have been registered to the dealership in order to boost the figures of models which have been over supplied with no demand to balance it out. This has very little effect on the price initially but once the market changes and demand grows again, these cars cannot be sold as new but they are still in the same condition.
Used cars which are being sold privately are also subject to depreciation. While factors such as supply and demand will have a slight effect on the price of private sales the age and mileage are by far the biggest factors. When relatively new cars are being reluctantly sold they often go to auction.
The drawback with an auction from the perspective of a private buyer is the inability to have cars looked over by a professional mechanic before purchase. Auctions are far more restrictive than private or trade sales and in most cases you won’t even be able to get in and check everything works.
If you know the list price of a new car and you see the same car at auction, the price difference should be great enough that you can lose the cost of any minor repairs in the saving. The advantage a private buyer has over a dealer at auction is they can buy a used car closer to the list price because it is not being resold straight away.