Published on June 25th, 2016 | by Daniel Sherman Fernandez0
Used Reconditioned Car Values To Plummet Thanks To Brexit
The next few weeks will be interesting to see what Malaysian used/reconditioned car dealers are going to do with their existing parked stocks due to Brexit. Why? Well most reconditioned German vehicles in Malaysia are brought in from Britain and purchased by a previous high British currency (Before Brexit announcement).
Pekema members bought their current stock of AP used reconditioned Mercedes, BMW, Audi and Porsche vehicles from Britain with high British exchange rate. Now with Brexit their purchase values are set to be negative in the region between 15-20% lower due to the weaker British currency and also the dwindling used car values in Britain.
This means all future used/reconditioned car imports from the Britain will become more attractive prompting a further surge of used/reconditioned vehicles being imported from Britain hitting our shores in the coming months (wait about 5-6 months to see the real effects). The extent of this will be largely determined by economic factors.
The knock on effects of Brexit are potentially very worrying for both the new and used car markets in Malaysia. Firstly a weakening of British sterling and a surge of cheap UK imports will mean used car values in Malaysia may fall sharply from their current position. This may leave many car buyers in negative equity as the value of the car they are driving falls beneath what they owe to their finance/banks.
The effects of a sharp fall in used car values may be particularly pronounced for Pekema used/reconditioned vehicle importers who are currently holding huge stocks in Malaysia and also in Britain.
It will be a buyers’ market and the deals in the used car lots are going to get evn better in coming months. BE Patient & Wait for it!