A big 4WD and a 20% return on investment in 18 months…you what?

A classic illustration of how dramatically the car market has changed over the last 18 months was presented to the offices of Motor Trade Insider recently when an “insider” informed us about the events surrounding his recent purchase of a German 4wd.

As you know we have tried to keep our readers fully updated with the ups and downs of the business. These “ups and downs” have never been more starkly illustrated than in our very own ‘Carmageddon’ headlines in late 2008 until the peak of 2009 which saw car prices dip and then rebound in spectacular fashion, the biggest comeback since Lazarus.

At the time the used car market fell off a cliff in 2008 the 4wd was seen as a frightening symbol of this decline and of everything that was wrong with the world and we witnessed owners bailing out of them like lemmings and dealers virtually unable to give them away.

Well our advice at the time, if memory serves correctly, was that if you wanted a bargain and you were confident that you could ride out the storm, take advantage of the chaos and invest in a 4wd.

So now that the dust has settled and events are relatively stable our insider recently purchased a good example for £18,000 and drove it back to his showroom so it could be prepared for display.

He gave the paperwork to his administrator as normal and it was at this point he was informed that the company had previously owned this very same car, back in December 2008 and had subsequently sold it on again in January 2009, no real problem there as it’s the sort of thing that can easily happen in a small town.

But the real surprise came when he realised that in December 2008 he had bought it for £15,000!

So barely 18 months later he had paid £3,000 more for a car which was now older and had 8,000 more miles on the clock.

It seems shocking until we realise that he has paid the current market value for the car and therefore can still sell it and make a profit.

The real winner, of course, is clearly the customer who bought it back in 2009 and who probably couldn’t believe that he had effectively been driving a 4wd drive around for 18 months free of charge.

Where else is anyone likely to get a 20% return on their investment in a year and a half?

“Crazy times” doesn’t begin to cover it.

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