In a move described by movers and shakers in the second hand car markets of the UK, it appears that instead of the expected 15%-a-year depreciation in used car prices that has become expected, in the last twelve months a total reverse of the situation has occurred. That means that the value of a second hand car has actually risen by £600 on average in 2009.

Two factors are reckoned to have contributed to this phenomenon: The first has been undoubtedly the Government’s scrappage scheme which was the major factor. Following not far behind was the decision by many of the UKs leading fleet owners to delay replacing their vehicles to 2010, which has caused a major dearth of second hand vehicles on the market.

In general, any second hand car is expected to depreciate in value by around 1.25% monthly. However a spokesman for the used car dealers association in the UK has announced that prices on the forecourt have risen by an average of 3% every month.

They report that cars under three years old have risen in value by up to 20% or even more depending on model and age

However this dramatic change in the status quo for the second hand car owner is not expected to continue to far into 2101, when the fleet owners eventually decide that they need to change their vehicles and the Government’s scheme will be long forgotten. However it will be good while it lasts, except for those who are buying a second hand car for the first time. If you can find one!

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Tags: British Economy, British Pound, Credit Crunch, Economics, Economy, Financial News, Money, Recession, Retail, scrappage scheme, second hand car, second hand vehicles, UK Economy, UK Recession

You could almost hear the cries of " look Gordon, it worked" reverberating around Downing Street over the last few days with the announcement that sales of new cars rose for the first time in 15 months in July, as the government’s innovative "cash-for-bangers" scheme appeared to be finally coaxing more buyers back into new car showrooms.

Since the scheme was launched in May, official figures show that orders have been placed for more than 150,000 new cars have been ordered through the government’s scrappage scheme, meaning that that more than half of the money set aside to fund the scheme has already been taken up.

Already a lobby group representing dealers has been mustered to call for the scheme incentives to be extended when the scheme’s funding ends, stating that argument that the government’s £300 million programme has already been recovered due to the tax receipts earned in the sales. .

According to data published by the Society of Motor Manufacturers and Traders (SMMT), registrations of new cars rose by 2.4 per cent last month to a total 157,149 units, marked their first year-on-year rise since April of 2008. According to the SMMT 21 per cent of last month’s registrations were a direct result of the scrappage scheme, with almost one-fifth of that number emanating from orders placed in the South East of England.

Sales of small car sales appeared to be growing the fastest, and Ford Motor’s Fiesta model was the UK’s best-selling car. Registrations of mini segment cars more than tripled in July, while registrations of "super-minis" rose by more than fifteen percent.

Meanwhile an independent analyst also announced that while the increased sales of new cars could be directly attributed to the scrappage scheme, the year-on-year rise may also be a further sign that a significant number of UK consumers are now enjoying the ability to step up their discretionary spending.

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Tags: Alastair Darling, British Economy, cash-for-bangers, Credit Crunch, Downing Street, Economy, Gordon Brown, Money, Money Management, Retail, scrappage scheme, SMMT, Society of Motor Manufacturers and Traders

The battle to keep General Motors production in the UK to the highest level seems to be gaining ground. Business Secretary Lord Mandelson announced that he had been given a “positive response” from the US government on a recent visit to Washington during which he held talks with US Treasury’s car industry bail-out team.
Lord Mandelson is confident that there is no deal yet on the overall future of GM’s European operations and for Vauxhall who employ 5,500 people in the UK.

As Vauxhall ponder their uncertain future, it appears that most of the spoils to be gained under the British government’s vehicle scrappage scheme are going to South Korea. Reports have it that the bulk of new car sales are going to the Hyundai Motor Company whose range of small family saloons are doing very well out of Lord Mandelson’ s 300 million-pound scheme that invites motorists to trade in cars more than 10 years old in return for a 2,000 pound subsidy. Government figures released early this week said that the scheme had generated orders for 60,000 new orders in the period within the last six weeks alone, with Hyundai selling 8,246 new cars. A company spokeswoman announced that the Hyundai i10 was proving to be a big seller.

Understandable when you consider that with the scrappage discount you can have an i10 on the road for less than 5,000 pounds.

Former chief executive of the Royal Bank of Scotland, the much maligned Sir Fred Goodwin has shown a side we never knew existed by agreeing to hand back more than a third of the lump sum pension he snuck out of the back door of the bank with last year.

The banker, as well as his family, has felt a major downturn in their personal popularity since then. They have been reported to have actually been in hiding since their Edinburgh home came under attack in March of this year by angry shareholders.

Troubled sports broadcaster Setanta finally gave up their last hope of retaining their rights to broadcasting the 46 live matches allocated to the company for the 2009/2010 season through failing to meet another payment of the £30 million it owes the English Premier League. Without any further ado, the Premier League will begin an auction to find a broadcaster for the 46 UK live matches for the 2009/10 season.

The mining sector who until Friday had performed badly, were the main climbers on the FTSE on Friday. Shares in Anglo American driven by renewed speculation that they might be a target for takeover by the Brazilian mining group, Vale. Market analysts predicted that Vale’s move for Anglo would allow it to diversify beyond iron ore and increase coal and copper assets. Anglo closed up 2.7 per cent.

The house building sector also gained after Taylor Wimpey announced an increase in stability. On the announcement shares in the company rose 9.7 per cent to 34 pence; Barratt Developments also saw their shares rise by 7 per cent on Friday to close on 153½ pence. The Berkeley Group climbed but less spectacularly. Their shares rose by 2.5 percent firmer to 773 pence.

The World’s largest cruise line operator Carnival Corp. rallied 6.2 percent, to 1,668 pence, extending yesterday’s 7.2 percent advance after reported second-quarter profit that beat analysts’ estimates…”

Carphone Warehouse Group Plc Europe’s largest mobile-phone and laptop retailer had their shares increase in value by 6 percent, to 162.5 pence after RBS upgraded them from “hold” to “buy” and raised its share price estimation to 230 pence.

Overall, the FTSE 100 rose as the weekend loomed, climbing 65.07 points to finish on 4,345.93. On Friday the FTSE 250 made a bit of a recovery after a few days of losses up 92.67 points to close on 7,334.34.

Sterling held its ground against the dollar, while slipping slightly against the other major currencies

Pound/US dollar 1.6494
Pound/Euro 1.1832
Pound/Japanese Yen 158.8075
Pound/Swiss Franc 1.7833

As Wall Street closed on Friday, the Dow Jones was down just 15.87 points on 8539.73, while the NASDAQ climbed 19.75 points to close on 1827.42

Steve Jobs iconic CEO of Apple boss announced that he had been the recipient of a liver transplant about two months ago and is expected to return to work later this month.
Jobs would be returning to his job on schedule, but may initially work part-time, after winding down his normal management role more than five months ago.

Oil prices continued above the $70-a-barrel mark all this week, helped by suggestions the Chinese economy was rebounding faster than expected.

Spot gold prices continued to drop, on Friday by 0.3 per cent to $935.20 a troy ounce as data showed US inflation being contained lessening the metal’s appeal as a hedge against inflation.

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Tags: Carphone Warehouse Group Plc, Economy, Financial News, General Motors, Hyundai Motor Company, Lord Mandelson, Retail, Royal Bank of Scotland, scrappage scheme, Setanta, Sir Fred Goodwin, Taylor Wimpey, The Berkeley Group