Aggressive price cuts and a lack of good-quality used cars has sent the price of some new autos below their second-hand equivalents, the Financial Times reported Thursday.
Struggling automakers have been cutting prices dramatically and offering other incentives in a bid to lure customers during the downturn, but car buyers have been increasingly attracted to the used market, according to the report.
“For the first time, used cars are more expensive than new,” Parker’s, a car-buying price guide, told the newspaper. The differential is not across the board, Parker’s added.
Parker’s cited a new Vauxhall Corsa being sold for £500 ($750) less than a used equivalent model, which had 5,160 miles on the clock, the FT reported. Meanwhile, car supermarket Cheap-Cars-Online was also spotted undercutting the second-hand market by £1,000 with a Mazda 6, Parker’s told the FT.
In recent months the price of second-hand automobiles have been rising in the UK and in the US as recession-hit customers opt for what is perceived to be the cheaper used market, the report said.
But auto manufacturers such as GM’s Vauxhall and Peugeot-Citroën are offering major incentives on new cars, which is leading to the illogical price gap, the report said.