SALE OF USED CARS

Press, Volume XCII, Issue 27734, 11 August 1955, Page 7

SALE OF USED CARS

SOME STEADYING REPORTED EFFECT OF TIME-PAYMENT REGULATIONS Some steadying of used car sales has been observed in Christchurch, though it is considered to be too early yet to assess the full effects of the Government’s regulations to control hire purchase. Purchasers of motor-vehicles must now have a deposit at least equal to half the purchase price, and pay the balance within 18 months. Winter is generally regarded as a slack time for used car sales, but some of the current slackness is thought to be a result of the new regulations. A used car dealer said yesterday that it was not so much the 50 per cent, deposit that was tending to restrict sales, as the heavily increased monthly payments. Payments of £l5 to £lB a month were a heavy burden for the average man—the worker with a family, or the small businessman. This class of buyer, who was the backbone of the trade, seemed to have been worst affected by the regulations. The 18-month payment stipulation also affects persons relying on seasonal income to meet commitments. Where a two-year period gives a hirer the benefit of returns from two crop? or the commissions of two sets of annual sales, the 18-month limit may allow for returns from only a yearly oeriod, and not even a year and a half. . , It seems obvious that some potential buyers are now holding back to build un their funds so that later they will be able to find the necessary deposit, but ethers are now directing their attention to cheaper cars, within the range of their finances. A used car dealer said yesterday: “It is noticeable that buyers are purchasing cars of less value. Almost assuredlv the cheaper car will be in greater demand.” Trade in New Vehicles This in turn may have some effect on the prices of later model cars, and also on the sale of new cars. One dealer reported yesterday that he knew of owners of late model cars, who had placed orders for new vehicles about two years ago. having to cancel these orders when the cars became available because they were faced with a much bigger depreciation on their late-model cars than they had expected, and were unable to find the extra money needed. Though in the meantime the effects of the regulations are not very marked, and in some quarters have barely been felt, they may ultimately lower the prices of used cars further. “According to one trader, used cars have dropped in price by more than 20 per cent, in the last 12 months, as a result of the pressure of supply and demand.