The German used car market is finding the going very tough currently with prices and demand falling and stock piles of unsold vehicles increasing on a weekly basis. Generally the economic conditions in the Eurozone are the primary reasons for a stagnation in new and used car sales.

As manufacturers spend more time and money marketing new cars to consumers, the price of nearly new cars that are primarily coming out of the rental market are struggling to find a buyer due to their high price. To put this into perspective, currently a new ex-rental car is only 1000 euros less expensive to buy than a discounted new car complete with a full warranty and attractive financing.

Currently vendors are hanging onto these cars in the hope that the used market will improve in quarter three and four 2012, but Joseph Caruso, Autorola Germany’s managing director, believes this is unlikely.

'With the growing stock of used cars in the German market, unless prices are reduced and some of this stock sold, then the problem will continue to get worse. In quarter three and four there could be thousands of cars that have been sitting in a compound for many months that are still not selling, so our advice would be to reduce prices now by 10-15% or risk selling the cars for even less later in 2012,' he said.

An added pressure in the German market is cheap used cars that are being imported from Belgium, Netherlands, Italy and Spain.  Some of these are 10-15% cheaper than German used cars so are immediately finding buyers who would previously not have considered replacing their car in these tough economic times.

'This challenge shows that mainland Europe is now a used car market in itself and cross border sales means Germany is up against competition from other countries where used cars are much cheaper.

'There is a cross border market opportunity for German cars to go to Russia but currently this is in its infancy due to tax and customs issues, but this situation may improve over the next 12 months. In the meantime, companies are also extending their replacement cycles – while others are making staff redundant and not actually buying new cars – where the German market would be partly fuelled by demand from corporates even in a recession.

'Where Autorola’s online platform is coming into its own is with leasing companies and big dealer groups who are offering cars for sale online whilst they are still in a compound or dealer forecourt. There are no vehicle movement costs and it opens up stock to hundreds more trade buyers across the whole of Germany. Within a couple of hours of images being taken of the car, it can be live on the Autorola platform being viewed by hundreds of trade buyers.

'Ex-lease cars are often sold by the vendor directly to the consumer, and what we are doing is offering those cars for sale to trade buyers online. Vendors are receiving reasonable bids and are selling stock as they are used to buying 120,000 km ex-fleet cars without a warranty, whereas the consumer is still more cautious at buying directly from the lease supplier,' he added.

So the outlook for the German used market into 2013 looks to be pretty tough, and unless vendors are bold and start to react to a rapidly changing market, then supply will continue to exceed demand and the stockpile of used cars will continue to grow.